In a market worth hundreds of billions of yuan, how can high-threshold categories build overseas brands?

Whether at home or abroad, against the backdrop of a decline in overall consumption, the " silver economy " has become a rare track with potential.

Population aging is a global trend. According to the World Social Report 2023 released by the United Nations, the global population over the age of 65 reached 761 million in 2021 and is expected to increase to 1.6 billion by 2050. The report also pointed out that in order to achieve sustainable development, countries need to give priority to the rights and well-being of the elderly and take specific measures to cope with the rising costs of pensions and medical care and provide support for the elderly population.

The aging trend has given rise to the industry's vents, bringing about a number of blue ocean markets, which are expected to become a hot track for going overseas. Elderly care products, such as incontinence products, nursing beds, wheelchairs, etc., health products for the elderly, such as cod liver oil, vitamins, red ginseng, donkey-hide gelatin, and smart elderly care equipment, including smart wearables, home appliances, rehabilitation equipment, etc., will usher in broad opportunities for going overseas.

In the field of home rehabilitation medical equipment, many Chinese companies have begun to expand overseas. Companies such as Medtronic and Yuyue Medical have already established a certain brand reputation overseas, and emerging companies such as Zuowei Technology have also set their growth goals overseas.

As an emerging industry, home rehabilitation medical equipment currently has a low market penetration rate. However, as the global aging trend continues to intensify, the overseas market will become the main growth point for domestic aging-friendly equipment.

Different from general professional medical devices, home rehabilitation medical equipment is aimed at professional elderly care and nursing institutions, but also has great appeal to general consumers with relevant nursing needs, and has the potential for branding.

Relying on the advantages of domestic industrial belts, how home rehabilitation medical equipment can complete initial market education overseas and build independent brands will be the key direction of attention for this category.

Market opportunities brought by home-based elderly care

" Providing care in old age " is the common pursuit of people.

An obvious trend is that as the living standards of society improve, home-based care has become the choice of more and more families. In mainstream countries, home-based care is no longer just a one-way provision of care for the elderly by children, but has gradually evolved into a comprehensive service jointly provided by the government and community organizations.

Take the UK as an example. Since the 1950s, the UK has begun to promote a community care elderly care model led by the government and relying on communities and non-profit organizations. This model is more common in European high-welfare countries.

When the elderly are unwilling to go to nursing homes and prefer to stay at home, huge opportunities are brewing for the home health care market. The quality of elderly care services is valued, and high-end and intelligent home health care has become the industry direction. Although the industry is still in the early stage of market education, some medical device companies have already made some layouts in the product field of home rehabilitation medical equipment.

Maidester has launched electric nursing beds, electric wheelchairs, elderly walkers, smart anti-bedsore pads and other products for C-end consumers; Yuyue Medical focuses on health testing and has home oxygen concentrators, blood pressure monitors, blood glucose meters, wheelchairs, commode chairs and other products; as a technology company focusing on technological innovation, it has smart nursing beds for urination and defecation, electric lifting commode chairs, smart diapers, portable bathing machines, smart walking robots and other products.

In fact, home rehabilitation medical equipment is a branch of the medical device category. According to the product risk level, the foreign medical device market divides products into Class I, Class II and Class III. Class I products have lower risks, Class II products have medium risks, and Class III products have higher risks and need to go through different certification and registration procedures.

Domestic medical device companies going overseas are mainly concentrated in low-threshold sectors, such as medical consumables, disposable surgical instruments, catheters, straws, etc.; low-risk medical devices, such as simple medical equipment, rehabilitation equipment, etc.; and non-regulated medical devices, such as health management equipment, personal care products, etc.

In 2023, the United States, Japan, and Germany will be the main export destinations for Chinese medical devices. Among them, the United States is the largest trading country, accounting for 24.43% of China's medical device export market. Medical consumables are the largest category of medical device exports, and the export value of medical consumables in 2023 will account for 44.91% of the total export value.

There is a saying that is the consensus of medical device companies: For medical device companies, the domestic market solves the problem of making money, and the overseas market solves the problem of eating meat.

However, although the overseas revenue of many medical device companies has reached a high proportion, for example, Mindray Medical's international business revenue exceeded 11 billion yuan in 2022, accounting for more than 35% of total revenue; Meiyi Medical's total revenue in 2022 was 1.415 billion yuan, and overseas revenue accounted for 93.54%, but domestic companies' overseas expansion is still mainly based on OEM outsourcing, and the overall overseas brand awareness is relatively low.

Cross-border e-commerce has become an option for medical device companies seeking to become branded, and home rehabilitation medical equipment is a breakthrough in the category.

Medtronic has launched the DTC brand Vocic overseas , and Yuwell Medical's brand Yuwell has also been launched on platforms such as Amazon and Walmart in the United States.

But as Liu Zhikuo, the founder of Medster, once mentioned in a media interview, among domestic rehabilitation medical device brands, there are only a handful of companies that can achieve a closed loop of product positioning, R&D, production, sales and brand management.

What are the difficulties in exporting home medical devices? How much room is there for Chinese brands?

As technology: seeing the future of smart elderly care

Intelligence is the future of elderly care.

Ennet visited Shenzhen Serving Technology Co., Ltd., which is a national high-tech enterprise focusing on intelligent care for disabled elderly people.

Focusing on the care needs of disabled elderly people in terms of defecation, bathing, eating, getting in and out of bed, walking, dressing, etc., ASUSTEK has developed a series of intelligent equipment. Its main products include intelligent defecation and urination care robots, intelligent defecation and urination care beds, portable bathing machines, etc.

Sun Weihong, CEO of ASUSTEK Technology , told Ennet that ASUSTEK Technology saw the market opportunities brought by the increasingly serious aging population and started developing products in 2019. In order to make the products more suitable for actual application scenarios, the ASUSTEK Technology R&D team lived in a nursing home for three months during the epidemic to personally experience caring for the elderly and conduct product testing. ASUSTEK Technology has invested over 100 million yuan in R&D costs and obtained more than 200 exclusive patents.

Japan is a seriously aging society, and it started developing smart nursing equipment earlier, so its nursing equipment is relatively advanced. Currently, smart nursing equipment as a technology has been sold to Japan.

" This shows that our equipment is superior to Japan in many aspects, such as the degree of intelligence and digitization. " Sun Weihong said that by leveraging the advantages of China's information technology development, we can do better than overseas brands in terms of intelligence and cost-effectiveness .

Sun Weihong showed the product highlights of the intelligent urination and defecation care robot to En.net.

First of all, the robot is functional. After the elderly are dressed, they will immediately vacuum, rinse, dry and disinfect after excretion without the help of others. " We often say that there is no filial son in front of a long-term sick bed. It may be possible to persist in taking care of disabled elderly people for one or two months, but for more than half a year, few people can persist well . Our robot can truly solve the pain points of nursing needs. " Sun Weihong said.

The second is safety. The product has three layers of protection in terms of power supply, and there will be no risk of electric shock.

The third is comfort. Sun Weihong said that the company's toilet and bowel care robots come into contact with users in the form of diapers . In terms of comfort and usage habits , the elderly are more accepting of diapers.

In order to obtain better functions and experience, ASUSTEK Technology iterates its products every year and better seizes the frontier market. However, as a new category, ASUSTEK Technology also encounters its own development difficulties. On the one hand, in the domestic market, the awareness of smart home care products is low, and C-end sales face the problem of how to conduct market education; on the other hand, in the context of weak consumption, the revenue growth of mid-to-high-end products is limited.

In comparison, this type of product has a larger market space in the overseas high-consumption market. As ASUS Technology has entered Alibaba International Station, Sun Weihong said that in 2023, ASUS Technology's overseas revenue will reach 40%, and it will continue to increase investment in overseas markets in the future.

At the 2023 CES, many overseas exhibitors were impressed by the technological products. "The labor cost overseas is high, and our products can solve many problems for them. Moreover, Chinese products are cost-effective when exported overseas and have great competitive advantages," said Sun Weihong.

Sun Weihong introduced that recently, ASUSTEK received a customer from the Middle East, who signed an order on the spot after learning about the product . It can be foreseen that intelligent rehabilitation equipment has great growth potential in overseas high-consumption markets.

However, at present, overseas consumer medical device brands are still dominated by local brands, and Chinese companies mainly go overseas through OEM or cooperate with overseas agents. Chinese products have competitive advantages, but how to build brands overseas will still be a difficulty in going overseas.

Medstar: Medical device DTC going global

While most medical device companies have not yet engaged in branding when going overseas, Medtronic began to launch its DTC brand overseas in 2022.

Maidesite is a medical device company located in Hebei, focusing on the research and development, production and sales of medical devices and rehabilitation aids. Before starting to expand its brand overseas, Maidesite had more than ten years of experience in China and was engaged in OEM for European and American customers.

In 2022, Madester launched the Mateside brand overseas, focusing on home care lifting chairs and bathing chairs. In 2023, Madester officially promoted the international brand VOCIC, went online on Amazon and launched its own brand independent website. Currently, VOCIC's elderly scooters, strollers and walkers are popular overseas.

Regarding the brand's overseas expansion strategy, Liu Zhikuo, the founder of Maidester, introduced to Yien.com that VOCIC's brand overseas expansion is divided into two directions. For high-priced products, it focuses on brand marketing to promote brand value overseas, and for low-priced products, it expands market share with super high cost-effectiveness.

Based on years of experience, Madester has its own R&D team and factory, and its products have sufficient cost-effectiveness and product strength. In the face of shortcomings on the brand side, Madester chooses to conduct brand marketing mainly online.

Liu Zhikuo emphasized that service quality and reputation are the key points for consumer medical devices to build brands overseas.

The main barrier to exporting home rehabilitation medical equipment is compliance, and it is necessary to apply for FBA qualifications and sales licenses, which results in a high threshold for this category, and it is difficult for related corporate brands to achieve the same popularity as consumer electronics. But at the same time, they also need to face competition from overseas local medical device giants. Take the United States as an example, Medline, Enovis, Invacare and other companies are already world-renowned companies.

"Home rehabilitation medical devices are not mass consumer goods, but are similar to rigid-need products with high professional attributes, and consumers highly recognize the brand," Liu Zhikuo said, "so one of our conclusions is to cultivate the brand."

Liu Zhikuo introduced that with its competitive products, VOCIC has accumulated brand value in a year. Its products can be seen on news websites, professional medical device websites, evaluation columns, TV programs, etc.

"First, make good products and services, and then continue to build brand reputation." Liu Zhikuo introduced that Madester is one of the few companies in China that has everything from research and development, production to brand expansion overseas, as well as overseas warehousing and logistics in its own hands.

Most domestic medical device companies have not yet connected production and sales. The sales side lacks understanding and expertise in medical devices, while production companies are not good at marketing, resulting in a high threshold for going overseas. Liu Zhikuo summarized the experience of Medstar and believed that home rehabilitation medical companies need to open up a closed loop of R&D, production, sales and branding to be competitive in overseas markets.

Maidester sells its products both online and offline overseas. Online sales are mainly through Amazon and independent websites, while offline sales are to professional institutions such as nursing homes. However, the online and offline consumption scenarios are different, so the product lines are not the same. Maidester will reserve product resources specifically for offline channels.

On the product side, there are large cultural differences between overseas markets and domestic markets, and domestic products cannot be directly reused overseas immediately.

Maidester's popular products in China are electric nursing beds, anti-bedsore mattresses, electric wheelchairs, etc., but in the overseas e-commerce market, the best-selling products are electric wheelchairs, trolleys, walkers and other elderly mobility products. The reason is that the transportation cost of bed products and the cost of local services overseas are high, and the second is the problem of cultural differences.

Liu Zhikuo mentioned that domestic nursing beds generally have commode holes, so disabled elderly people can urinate and defecate directly in bed, but overseas consumers cannot accept urinating and defecating in bed; secondly, domestic consumption habits prefer big and comprehensive nursing beds, which have many functions, including back lifting, leg raising and lowering, turning over left and right, lifting and lowering, commode holes, etc., but American consumption habits are based on absolute pragmatism, and nursing beds only require basic functions.

Home rehabilitation equipment is closely related to consumers' living habits, and it is even more necessary to understand product demand from a cultural perspective.

In 2023, Medtronic announced that it had completed its first round of financing of nearly 100 million yuan, which will be used for product research and development, supply chain construction and channel expansion to expand its advantages and competitiveness in the field of home rehabilitation medical devices. Liu Zhikuo predicts that Medtronic's overseas revenue in 2024 will account for more than 60% of its total revenue, and it is expected to generate 500 million yuan in revenue.

When talking about future plans, Liu Zhikuo said that first, Medster will continue to export products, which is the key to doing well in overseas markets. Second, it must continue to comply with regulations, which is a prerequisite for medical device brands to go overseas. Third, it must continue to improve its brand reputation.

With the general trend of brands going overseas, the overseas market for home rehabilitation medical equipment will continue to expand, and more and more Chinese companies will join the overseas competition, which will pose a greater test to the comprehensive capabilities of companies. Only companies with R&D, production and marketing capabilities can go further on the road to going overseas.

Who will share the pie of the trillion-dollar market in the future?

Statistics show that 90% of rehabilitation aids in the United States come from China.

According to data from the China Chamber of Commerce for Import and Export of Medicines and Health Products, in 2023, the export value of China's health care and rehabilitation products will be US$9.636 billion, exceeding 67 billion yuan.

Domestic rehabilitation medical companies are increasing their overseas layout. Domestic companies with larger scale in the field of rehabilitation equipment include Xiangyu Medical, Weishi Medical, Mylande, Pumen Technology, and Longzhijie. According to reports from the investment community, these companies will adjust going overseas to become an important strategy.

Under the temptation of huge overseas growth, going overseas has become a major trend for domestic rehabilitation medical companies.

It is worth noting that the Chinese supply chain is behind world-renowned brands such as INVACARE, Drive Medical, and MEDLINE in the United States. Jiangsu Jumao Medical has become a long-term manufacturing supplier for these companies by relying on its CDMO business. Many domestic rehabilitation companies are generating huge overseas revenue.

While overseas expansion of domestic brands can bring greater profit margins, it also presents companies with many challenges.

The advantages of domestic home rehabilitation medical companies are mainly concentrated in R&D and production, but there are gaps in market capabilities, especially localized services and marketing capabilities for overseas markets are even more scarce.

Another trend is that the level of intelligence in the home rehabilitation medical field is significantly improving. Driven by high-tech and other high-precision enterprises, products in this field are expected to usher in further intelligent iterations in the next few years.

With the maturity of the domestic overseas ecosystem, high-threshold categories such as medical equipment have also taken the path of becoming international brands.