Report: The Chinese Orthopedic Industry, 2013-2015

A new report published by Research in China, an independent provider of China business intelligence, covers the orthopedic market from 2013 to 2015. The report notes that the certain segments of the orthopedic industry has experienced a significant uptick in business over the past several years; and covers projections for all the major orthopedic market segments over the next two years.

According to the report, China’s aging population, consumption upgrade and policy support, has aided rapid development in the orthopedic instrument industry over the years, with total market size rising from $538 million in 2006 to $1.6 billion in 2012.

Trauma products, spine products and joint products constitute the three major market segments of the Chinese orthopedic instrument industry. In 2012, the three principal products accounted for an aggregate market share of about 82.2 percent, out of which trauma products showed the highest, approximately 35.5 percent, with market size up 18.24 percent year on year; spine and joint products ranked second (up 12.6 percent year on year) and third (up 12.4 percent year on year), respectively.

In recent years, along with the increasing investment of foreign-funded enterprises in China, the trend of foreign monopolies has been more evident, the report claims. After the acquisition of Synthes in 2012, Johnson & Johnson has turned into the largest company in China’s orthopedic instrument market, with market share of both trauma and spine products occupying first place.

In November 2012, Medtronic purchased KangHui Medical for $816 million, thus making an important step in Chinese orthopedic instrument market localization. Compared with Medtronic’s high-end positioning, the report predicts affordable KangHui products will help Medtronic expand low- and medium-end markets in emerging countries and regions (including China). Last year, Medtronic—with KangHui Medical—occupied 15.9 percent of China’s spine market.

Stryker is a world-renowned orthopedic instrument enterprise, and its joint products account for about 20 percent of global market share. In January 2013, Stryker acquired Trauson Holdings for $764 million, and by virtue of the latter’s R&D (research and development) and manufacturing capacity and distribution network advantages, further expanded its market share in China, expected to occupy 8-10 percent of China’s orthopedic market in 2013.

Relying on powerful R&D strength and mature distribution network, Weigao has already become the largest local supplier of orthopedic devices in China. Last year, its orthopedic device business brought in approximate revenues of $36.6 million, and trauma equipment products occupied a market share of approximately 5.1 percent.

The report suggests that Chinese orthopedic instrument market will soon encounter more fierce competition in which small companies will be gradually eliminated due to their low R&D capabilities, insufficient production capacity and non-standard quality control. The market will be further concentrated in industry magnates with superior financial and technical strength.

The report, titled “China Orthopedic Instrument Industry Report, 2013-2015,” mainly covers the following topics: An overview of the market structure and development prospects of the global orthopedic instrument industry; the market structure, competition pattern, barriers to entry and imports and exports of the Chinese orthopedic instrument industry; the development environment (including policy environment, development prospects as well as development of upstream and downstream industries) for the Chinese orthopedic instrument industry; operating conditions of 12 orthopedic instrument companies (including Johnson & Johnson, Medtronic, Stryker, Weigao, Shanghai Kinetic, Beijing AKEC Medical and United Orthopedic Corporation) in China.