Siemens Healthineers' Marketing Strategy in China

Brought to you by WBR Insights



China is a serious emerging market and brands all over the world are looking for ways to market their products and services to this lucrative population. American companies, in particular, have been bending over backwards to seduce Chinese businesses.

The Chinese economy has been growing by at least six percent year-on-year since January 2017. And, while the growth has slowed a little since July 2018 in the face of ongoing trade tensions with the Trump administration, the future is still bright indeed. Industrial production grew 5.6 percent in the period between January and September, and retail sales rose 8.2 percent year-on-year in the first nine months of 2019.

With China providing such a massive market, the worldwide opinion is that if you can succeed there, you don't need to succeed anywhere else. As a global provider of medical technology, Siemens Healthineers understands this all too well and has been eying up the opportunities presented by the Chinese healthcare market.

Chinese Healthcare

Alongside industrial production and retail spending, the healthcare sector in China is also going through a boom period - largely underpinned by increased spending and a large aging population.

By 2035, it is predicted that the senior citizen population in China will hit 409 million people. That's more than the population of the entire United States and represents over a quarter of the people living in China. Inversely, thanks to the continuing impact of the one-child program, the younger population is lagging, and it's predicted that they will have to increasingly carry the financial burden of their elderly kin as time goes on.

As this need for increased healthcare grows, so too will Chinese spending in the sector. In the same timescale as previously mentioned, healthcare spending in China could reach RMB 18.04 trillion (USD 2.53 trillion). This represents an annual growth rate of 8.4 percent - outpacing the country's economic growth.

The aging population also changes the nature of conditions that will need treatment. As life expectancy and affluence increase, we can expect to see more chronic conditions such as diabetes become more prolific compared to acute infections - increasing the need for medical devices compared to medication.

This will increase the demand for medical products and services and should insulate the Chinese healthcare sector from most of the impact of the ongoing China/US trade dispute. Chinese medical technology companies stand to be beneficiaries of the tensions thanks to their close ties to domestic demand and since they provide alternatives to potentially expensive imported equipment.

This is what has driven Siemens Healthineers to establish a presence in China and create new opportunities in this expanding market.

Siemens Healthineers

For a few years now, Siemens has had a marketing philosophy of thinking global but acting local. That is to say, the company has a mission to continue being a commercial force around the world, but to connect with the local environment in each country it has a presence in - being sensitive to local needs, customs, markets, and politics.

"Our greatest challenge for further development in China is to become a truly local company, which will be the basis for all future competition," said President of Siemens Healthineers in China, Wang Hao. "In order to become a truly local company, a foreign enterprise needs to establish a localized mechanism, so that it can behave responsively and make decisions effectively in line with the market rules. Bearing this mission in mind, we need to make local products, and research and develop local solutions tailored for the Chinese market."

Siemens has started its endeavor with a 500-strong research and development team in China - its next largest after its homeland of Germany. The goal of this team is to develop innovative technological ideas and turn them into market-orientated products for the Chinese healthcare sector.

"We will research, develop and manufacture products locally that are suitable for our Chinese clients and we believe this is the only way to maintain our strategic edge in China in the future," added Wang.

Final Thoughts

The Chinese economy doesn't look like it's going to be shrinking any time soon. As the country continues to experience its industrial and commercial revolutions, the attractiveness of the market to foreign brands is only likely to increase in kind.

With the healthcare sector looking as if it will have a bright future - after all, as medical technology develops further, the aging population issue isn't one which is likely to go away - it's great to see companies such as Siemens Healthineers establishing themselves in the region.

As one industrial analyst puts it: "Along with their revenue growth, listed local medical companies are investing heavily in research and development, which is far higher than that of the industry average and has strengthened their innovation capabilities."


You can hear Siemens Healthineers' Vice President and Head of Digital Engagement, Linda Brunner, speak at B2B Online 2020, taking place in April at the Chicago Marriott Downtown.

Download the agenda today for more information and insights.