China’s medical device industry is dominated by over 15,000 private distribution companies. While most of these distributors are small and only have direct access to fewer than 10 hospitals, there are still thousands of medium-to-large distributors supplying critical medical devices to hospitals across the country.
But with so many dealers to choose from, it can be a challenge for foreign device manufacturers to locate the most ideal Chinese distribution partner that can help maximize their in-country sales.
Several issues to consider when choosing a dealer are:
- Distribution network reach
- Industry & sector expertise
- Commitment to clients & products
- Cross-cultural understanding
In this post, we go in-depth and discuss six of the top things to look for when searching for your ideal medical device distributor to serve the China market.
Nationwide Direct Sales Network
In the past, China’s medical device distribution industry was dominated by a multi-tiered network made up of large distributors and small sub-dealers, who provided most of the direct hospital sales.
However, under China’s new Two-Invoice System, Chinese distributors are required to make a maximum of two transactions for their devices. Transaction #1 being with the device manufacturer and transaction #2 with the hospital. The purpose of this system is to eliminate sub-dealers and force large device distributors to deal directly with the hospital, thus increasing efficiency and reducing costs for the hospital.
As a result, foreign device manufacturers should ideally look for distributors that control a nationwide sales network that sells devices directly to hospitals, and not merely passes the products onwards to sub-dealers.
If a manufacturer cannot locate a single large distributor to cover all of China, employing multiple medium-size distributors can also be effective.
How Kojima Excels
At Kojima, with 25+ years of distribution experience, we’ve built a nationwide sales network and employ over 150 sales professionals that cover 400 AAA hospitals in 17 provinces across China. Distributing medical devices directly into Chinese hospitals is our core competency.
Commitment To Client’s Brand & Devices
In the early stages of a partnership with a distributor, it is important for the device manufacturer to educate dealers how to market their product and brand to China’s hospital professionals.
Just as critical, however, is that the distributor continue to maintain the exact same product and brand marketing message throughout the lifecycle of the device. Unfortunately, over time, key information can be forgotten, sales enthusiasm can wane, or the distributor may have even added a competitor device to their portfolio.
Either way, it is important to find a distributor that shows a commitment to maintaining a high standard for marketing and sales activities. Whether it is in a hospital setting or at a medical conference, a distributor must market the product and promote the brand at a level that device manufacturers expect, consistently year-after-year.
How Kojima Can Help
At Kojima, we pride ourselves in our long-term commitment to current clients and marketing capabilities. By hosting regular seminars and training sessions, we ensure the current and next generation of sales professionals are aligned with the goals and marketing message established by each of our clients.
Industry Leader With High-Quality Relationships
Connections and “who you know” is a critical part of doing business in China. And for a Chinese distributor to succeed, they must have healthy working relationships with a wide range of professionals in the medical device sector.
This includes not only the doctors themselves, but also:
- Hospital staff (medical support & administrative)
- KOLs and industry advisors
- Government agencies
- Professors & researchers
It is relationships with these groups that helps keep the sales engine churning forwards and upwards.
So, for foreign device manufactures, it’s critical to partner with a distributor who has strong industry-wide connections to give clients the best chance to maximize sales in China.
Cross-Cultural Understanding
Though there are many well-intentioned Chinese device distributors, language and cultural barriers can often hinder the development of a strong, healthy relationship between distributor and manufacturer. And without a durable, trust-based relationship, achieving long-term success in China is difficult.
As a medical device manufacturer, it is important to locate a China distributor that can bridge the cultural divide and truly understand your business and sales goals. This helps when it comes time to negotiate contracts to ensure both parties agree to the wording and details of the signed commitment.
Sector Expertise
Device manufacturers should select a distributor that has expertise in the same MedTech sector as the manufacturer. This means that the distributor likely already has working relationships with the specific doctors that would be interested in using the manufacturer’s products. And no time would be wasted in having the distributor try to develop new connections with new doctors, which consumes time and resources to establish.
Manufacturers should locate a distributor whose existing device portfolio already compliments their device. If a distributor is already carrying a competitor device, it may create a conflict of interest for the distributor and affect sales down the road.
Ethical/Quality Compliance & Transparency
And finally, find a Chinese distributor that values transparency and ethical/quality compliance. Too many distributors these days are still willing to cut corners, sacrifice long-term success for short-term gains, and purposefully conceal insightful market information to their device manufacturing partners.
When meeting with a distributor, try to gauge the enthusiasm and willingness of the distributor to provide market information about your specific MedTech sector. Is the distributor honest about their distribution capabilities and do they introduce you to their local offices and connect you with doctors and industry leaders? How a distributor approaches the first meeting with you speaks volumes about the type of relationship you can expect to have with the dealer should you choose to partner with them for distribution in China.
Contact Kojima Today
Kojima offers no-obligation, complimentary consultation meetings with all potential device manufacturers that are interested to begin sales in China. We provide all potential clients with accurate market data, regulatory guidance, distribution information, and more.
Contact us today to get in touch.
