Becton Dickinson and Co, a United States-based medical technology company, is targeting a 17 percent growth in sales from China this year to about 600 million U.S. dollars, its chairman said.
China is already the second-largest market for the company after the US, said Vincent Forlenza, chairman of Becton Dickinson.
Medical devices, especially the infusion business, is still the largest revenue earner in China, said Forlenza, adding that Becton Dickinson's presence in the sector can be traced back to 1906, when it built up the first facility in the US to manufacture needles and syringes.
Becton Dickinson is one of the world's largest medical devices and diagnostics solution providers and has three facilities in China. All its China facilities are in Suzhou, Jiangsu province, with the third one commencing operations earlier this year.
According to Forlenza, there has been a huge exponential demand in China for products like needles and quick diagnostic kits. At the same time, the company is also furthering its localization efforts so that it can respond to market requirements quickly, he said.
China's medical device market has been showing promising growth due to factors like an accelerated aging population, higher spending on healthcare and the growing incidence of chronic and serious diseases.
China will be the world's second-largest medical technology market with a value of 55 billion U.S. dollars by 2020 and an average annual growth of 14 percent, according to a recent report from The Boston Consulting Group.
But the huge market is constantly changing and medical device providers have to deal with several new challenges along with the opportunities.
China's medical technology industry is different from what it was a decade ago and what it will be in the next 10 years, said Luo Ying, partner for China at BCG.
One of the most important measures for China's ongoing healthcare reform is to decentralize patients from large hospitals to primary ones.
The lower-tier urban hospitals will be the main customers for medical devices in the future, Luo said. Since most of these customers are highly price sensitive, it will become a challenge for high-end medical device producers to come up with affordable solutions, she said.
Becton Dickinson welcomes China's ongoing healthcare reform efforts and will take steps to expand its products and presence in the country, said Forlenza.
Part of that effort will be to not just focus on the province level, but to reach out to more patients in smaller hospitals, he said, adding that it was capable of withstanding competition from local medical device makers.
Shandong Weigao Group, one of Becton Dickinson's main rivals in China, reported a turnover of 1.48 billion yuan (231 million U.S. dollars) from sales of infusion products in 2014, an 18.1 percent year-on-year growth.
To grab more market share, especially in the middle-end market, some local companies have been resorting to massive price cuts. Though healthy competition is essential for better development of the industry, such price wars are harmful for everyone, said Forlenza.
Becton Dickinson will focus on delivering high-quality products and providing better after-sales services to grow its market share, even though its products are slightly more expensive than others, he said.
The US company is also looking at China playing a key role in its research and manufacturing capabilities.