Given its size, China is often viewed as a “must-win” market for medtech multinational companies (MNC). And with the recent price and margin challenges facing legacy products due to volume-based procurement, maximizing the opportunity for new product launches is becoming a key pillar for sustainable growth.


The emergence of agile local competitors and an environment that encourages local brands under “Made in China 2025,” however, increasingly raises two questions: How can MNCs succeed in China? Do they compete on a level playing field?


Based on past ZS research and an assessment of medtech launch cases in China, we find a path to success exists for MNC new launches. Neither global market leaders nor local players can take launch success for granted. Four factors—product, price, clinical presence and resources—prove critical.

  • Product. In China, local manufacturers continue to innovate and upgrade their products at a rapid pace. In innovative categories, local product quality is closing the gap with MNCs and is often perceived as “good enough.” As a result, MNCs need to evaluate if their product/portfolio is truly differentiated in the eyes of local clinicians and assess whether their global and local product efficacy evidence is compelling.
  • Price. Price continues to be a major consideration in China. And with local players willing to sell at a much lower price than what MNCs are accustomed to in other markets, MNCs must consider whether their prices can be justified in the eyes of healthcare providers and patients when compared to local alternatives.
  • Clinical presence. Local players are building strong relationships with physicians and applying advanced clinical engagement practices with talent they attracted from MNCs. MNCs can no longer assume they have the upper hand in clinical education and market influence. Instead, they must carefully evaluate whether they have sufficient therapy-area presence and determine if they’re able to leverage existing clinical and distribution resources across the company. If not, then forming a partnership with another firm may be necessary.
  • Resources. Unlike MNCs with the global market as a foundation, China is a “make-or-break” market for local medtech companies. As a result, local players try to maximize their topline revenue and out-invest MNCs in product and market development and clinical relationships. MNCs can no longer rely on their reputation alone. They instead must evaluate how their commercial investment compares to competitors and whether they have sufficient organizational focus and coordination.

In ZS’s analysis of what translates to success in China, we looked at real-world examples of how both local and global players can carve out their space. Here’s a round-up of what seems to be sticking and where players might need to improve.


We have seen successful use cases across several categories. Company A, a local medical equipment manufacturer (Figure 1), struggled to gain a foothold against MNCs—despite a lower price—because it initially had an inferior product, minimum clinical presence and limited upfront resources. Only after it enhanced second- and third-generation products and partnered with a leading MNC did Company A outperform on the product side. Company A then invested heavily in the top 100 hospitals to build brand equity and leveraged the partner’s clinical presence. Out-investing competing MNCs in key dimensions also helped Company A achieve market leadership.

Global leader “Company B” (Figure 2) entered the market, only to face significant challenges in China. Looking at the four key dimensions, we found it struggled along all four. From a product perspective, Company B entered behind several local competitors and allowed them to shape practice and perception toward their products’ technology. At the same time, Company B was priced 50% to 100% higher than local players that also had invested in patient assistance financing programs. Finally, Company B significantly under-invested in terms of field sales resources, as compared to local competitors, and did not transfer its clinical specialty strengths to the new specialty category. Thus far, Company B has not met its expectations in China, achieving only approximately 15% share.

Company C, an MNC with a separate medical implantable device, succeeded with its launch (Figure 3). Facing a strong local competitor, it out-invested local players across all dimensions. From a product and pricing perspective, it leveraged global and China-specific clinical data to prove its device’s efficacy and safety—while pricing similarly vs. the local player. From a clinical presence perspective, Company C covered approximately 400 of the top hospitals vs. approximately 100 from the local player and leveraged its internal distributor synergies in the same specialty area. From a resources perspective, it also out-invested local players with a dedicated team of approximately 100 full-time equivalents (vs. fewer than 50 from the local player). As a result, it has maintained category leadership of 75%.

While competition has intensified and access is becoming more challenging in China, we believe the rules of the game remain fair for innovative companies. Both MNCs and local players must succeed across launch dimensions to gain a foothold. Even MNC category leaders must not assume their success in other markets will automatically translate to success in China. They cannot simply copy strategies that worked in other markets or assume their brand halo translates; rather, they must aggressively invest across all launch dimensions to ensure medtech leadership.