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As the center integrates functions such as warehousing, logistics and distribution, Cooke Medical's sales model in China is also changing.
In contrast to previous models in which multinational medical device companies relied on agent sales, Cook Medical first attempted to sell some high-end products directly to hospitals. In the context of the new healthcare reform, the model of direct sales of medical devices has attracted much attention.
"Transition" direct sales model
The so-called direct selling means that the medical device manufacturer does not rely on distributors, and the medical device manufacturer supplies the hospital directly, and he himself undertakes the entire work of warehousing, logistics, distribution, collection and after-sales service.
In China's current medical context, dealers often provide rebates to purchasers in order to promote the sale of medical devices. Under the direct sales system, those who have the power to decide on purchasing will lose a large amount of gray income and will be difficult to implement.
Previously, Cook's two major competitors in the country, Boston Medical and Johnson & Johnson Medical, had tried the direct sales model, but the former had to give up most of the market share, and the latter experienced a strong market rebound and eventually gave up after one year.
"The main problem for Boston and Johnson & Johnson Medical is trying to completely shift from one model to another." On the 10th, when interviewed by our reporter, Mr. Thomas, the global vice president of Cook Medical, said so.
It is based on the lessons of the former that Cook tried to use direct sales in China in a more moderate manner.
Thomas told reporters that since entering the Chinese market in 1996, Cook Medical has been relying on agents to sell products in China. However, since the end of 2006, after re-scrutinizing the Chinese market, global headquarters has made such a decision, hoping to be able to “more directly accountable for their products†and thus play a greater initiative in sales.
Afterwards, the company began a series of preliminary preparations throughout 2007 and 2008, including the construction of a Shanghai center to improve infrastructure. During this transitional period, Cook has already sent 5 product specialists to China to directly take charge of the promotion and education of high-tech products.
"The growth of this part of the business has reached more than 60%. Compared with the growth rate of 10% of the agency business, the former is obviously more active and exciting." Thomas said that the company's high-tech high-quality high-end products, more Suitable for company-led sales. For the relatively low-end, more popular part of the market, Cook Medical will continue to work with distributors, and some of the products within the Shanghai Center will be delivered directly to distributors.
He emphasized that for a long time to come, Cook Medical will guarantee the coexistence of two marketing modes: dealer agency and corporate direct marketing. Cook Medical is one of the world's leading companies that assist in the promotion of interventional therapies. The medical devices they develop are commonly used in the world of minimally invasive medicine.
Thomas told reporters that the company sold more than 100 million yuan in China in 2008, an increase of 63% over the same period last year. It is expected that the annual growth rate will exceed 50% in the next two years. “My personal goal is that after 4 years, China will become the largest market in our Asia Pacific region, with total sales of nearly 500 million yuan.â€
Price reduction drive
In fact, Cook Medical chose to reform after entering China for more than a decade, and it is also a general trend in the current Chinese medical environment.
Thomas told reporters that dealers account for about 30% of profits in sales. Most medical device manufacturers have noticed this, but there are different considerations for whether to continue to distribute 30% of profits to distributors.
In his view, the previous failure of Boston and Johnson Health Care reform was largely "due to the fact that the market was not yet fully prepared." Now, more and more people are asking if they are willing to pay 30% more for the existence of local dealers, and the government, which is the entire healthcare provider, is willing to use this savings to help improve healthcare. The situation.
"We learned a lesson from it and chose to launch it at a suitable time now," he explained.
Indeed, lowering the price of medical device products is becoming a widespread voice. Under the background of the country's introduction of a price-reduction policy for related medical devices, multinational corporations are under competitive pressure from local companies and think about how to formulate competitive prices.
Earlier, the Development and Reform Commission's Price Division also stated that for the price confusion in the medical device industry, the price management of medical devices has been included in the "key research" category. The idea of ​​the National Development and Reform Commission is to limit the management of high value consumables for medical devices, and to squeeze out the grey portion of the circulation through fixing the price difference between the ex-factory price of the supplier and the hospital price, so as to achieve the purpose of price reduction.
Tomastain, the right pricing strategy is a "subtle balance." This time, some of the high-tech products used direct sales. It is also the need to reduce costs. "Direct sales can save the entire medical system a great deal of money."
The world's largest medical device company will test direct water
On December 10th, Cook Medical, the world's largest private medical device company, announced that it will invest 50 million to set up a regional exchange center in Shanghai to meet the rapidly growing demand for medical devices in Asia.