Fifth of Global Ultrasound Revenue Predicted for China by 2016

Following a period of heavy investment in healthcare, the outlook for China’s ultrasound imaging equipment market remains very optimistic. A new market report cited recent public health investment from 2009 to 2011 as simply a stepping-stone in China’s healthcare transformation. Consequently, revenues generated from Chinese sales of ultrasound are predicted to represent nearly 20% of global revenues by 2016.

The three-year Chinese government healthcare reform drove rapid growth in unit shipments of ultrasound between 2009 and 2011, according to international market research company InMedica (Wellingborough, UK). Growth was most seen in simple value and low-end ultrasound systems (average selling price less than USD 30,000), a combination of government targets to provide low-cost healthcare for rural areas, and increasing competition and influence of local Chinese suppliers. Combined with additional growth in premium and high-end equipment in the top tier 3 hospitals, China experienced revenue growth of 8%-10% yearly.

In 2012, there seems to be scant evidence of the market striking saturation; in fact, revenue growth is forecast to increase to a compound annual growth rate (CAGR) of 11% over the next five years. “While the volume of lower-value ultrasound equipment is forecast to decline significantly, a dramatic shift in demand for higher value color equipment in tier 1 and 2 hospitals will drive strong revenue growth,” commented Stephen Holloway, a senior analyst at InMedica. “Public investment in tier 2 county-based hospitals, to produce regional centers of excellence, will also increase demand for midrange ultrasound equipment. Intriguingly, this market should experience stiff competition between local Chinese suppliers now producing higher specification systems, and multinational suppliers looking to expand into new markets.”

In comparison, growth of the ultrasound market in the rest of the world is forecast to continue below 5% over the next five years. One of the major factors limiting this growth is the ongoing financial crisis in the Eurozone. This is especially apparent in Southern European countries such as Italy, Greece, Spain, and Portugal, where the ultrasound market has been greatly impacted. “As economic instability continues and tight public austerity measures implemented, the replacement of ultrasound equipment is being cancelled or postponed,” added Carly Reed, an analyst at InMedica.

However, new emerging ultrasound markets are offsetting the low growth seen in Europe. In countries such as India, Thailand, and Indonesia, demand for increased access to healthcare services is driving strong growth in low-cost ultrasound equipment. Long-term, these emerging markets are predicted to experience similar development as China, although at a slower rate. “Many of the newer emerging markets remain in infancy,” continued Ms. Reed. “These regions have huge potential for further growth, yet currently do not have the economic or public firepower to implement wide-ranging healthcare initiatives in the short-term.”

In the next five years, InMedica analysts predict China to emerge as a dominant and voracious consumer of ultrasound equipment, boosting rapid growth. “The value of future market growth here is best reflected in the movements of the global market-leading suppliers; almost all have invested heavily in specific Chinese centers for research, manufacturing and sales,” concluded Mr. Holloway. “The future of the ultrasound in China looks to be very assured.”

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