Exporting More Internationally? Focus On Asia

Crystal Globe ( Asia map) and success text enter key on computer keyboard, business concept

By Ames Gross, President and Founder of Pacific Bridge Medical

This blog post was also published on MedTech Intelligence.

As the popular story goes, when the infamous criminal Willie Sutton was asked why he robbed banks, he responded, “That’s where the money is”. The same concept applies to small to mid-size medtech companies that are seeking to grow their international business and are exporting more products.

From now until to the foreseeable future, the money is in Asia (and to a lesser extent, the wealthy countries in the Middle East). Medtech companies often fail to realize the size of global opportunities, especially in Asia.

A potential client recently told me that his company wanted to expand internationally but could not decide between Central and South America or Asia. Considering Asia has about 65% of the world’s population (4.5 billion) and Central/South America only has about 450 million, I was surprised that the person who called me did not understand the difference in the magnitudes of the opportunities.

Similarly, even per capita income in Asia (including China and India) is higher than the per capita income in Central and South America. Asians (especially outside of Japan) continue to get richer as a result of  increasing wages, salaries, and the strong local real estate markets. For example, a good local Chinese sales and marketing executive who speaks decent English and has 10 years of experience working at Western medtech companies in China can earn $250,000 per year or more. Good regulatory affairs executives are in very short supply, and a seasoned professional with decent English language skills and 10 years of experience in regulatory affairs at foreign device companies in China now make about $150,000 per year.

In most Asian countries (again, except Japan) real estate values have grown quickly, and homeowners and investors have generally made a killing in each Asian market. For example, in China and Singapore, the real estate market has gone up about 400–500% over the last 7–10 years.

Even in smaller Asian markets such as Malaysia and Indonesia, prices have generally escalated 200% over the last 7–10 years. While this real estate boom will certainly slow down somewhat throughout Asia, values will still grow about 10–20% per year depending on the country. This growth in Asian real estate values dwarfs the anticipated 2–3% real estate value growth in the United States .

Many Asians are now rich and have plenty of cash to spend on better healthcare. In addition to growing individual wealth, more Asian countries are starting new health insurance schemes and/or increasing reimbursement to help improve their constituents’ lives. Also, some relatively wealthy residents have purchased their own private insurance in addition to increased funding from their government.

Ten years ago, the per capita income in China was about $1,000 per year, while today it is closer to $5,000 per year. In the larger cities, per capita income is about $10,000 per year. As families in Asia become wealthier, they want to provide their newborn children with the best care possible. For example, in China where the quality of locally made products is often in doubt, mothers who can afford to do so will often buy foreign-made baby care products. Prices for imported baby care formula, talcum powder, and colicky baby products are sky high but are selling well.

Device companies must increase their business in Asia if they hope to expedite growth. If Willie Sutton were alive now, we all know where he would go.