Selling on the Chinese Market - The Coloplast Perspective. By Maiken Skeem, Communication Consultant at Coloplast

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Andrew Yu Liang is the general manager of Coloplast’s Chinese sales subsidiary. In this interview he talks about Coloplast’s business and general concerns when it comes to working on the Chinese market.

How do you make sure to establish the right governmental relationships in China?
“Coloplast is very well established on the Chinese market. We have been present there for 15 years. This means that the most important contacts have been established, and I don’t need to spend much time on this when I travel around China. For new companies on the Chinese market this is a major time-consuming task. Bureaucracy in China is considerable, and if you go through the normal “windows” or channels, it takes a lot of time to navigate. It’s important to have the right network such as the Danish ones – China Chamber of Commerce, Business Council and the Danish-Chinese Business Forum. They know their way around the system and know the people to be introduced to. Things go faster that way. We have, for example, a very smooth relationship with the China State Food and Drug Administration (SFDA), where product registration works out pretty smoothly. As goes with regard to the Ministry of Health, there is still a long way to go. We are not as close as we should be.”

What is the importance of Coloplast Academy for the Coloplast sales?
“The Coloplast Academy programme was developed specifically for the Chinese market. It’s a training platform for Chinese ostomy nurses. We offer courses in both ostomy and wound care. The nurses’ education is funded by Coloplast, and the programme is designed and conducted by us but in a joint cooperation with the Chinese Nursing Association. It is by far the most successful education programme we have so far. We are also considering introducing a Continence Care programme, but it’s not yet ready.”

What is your direct to the end-user channel and your new sales subsidiary?
China is a hospital-dominated market. The direct to the end-user channel is very much underdeveloped because of the limitations of the Chinese reimbursement system. Most users purchase their products from hospitals as “out-patients.”  As an alternative, we offer our products and care service through some selected pharmacy stores, and our Customer Service does offer a direct purchase channel to those “out of pocket end-users.”

What is the development in competition from other either local or international companies?
“International companies in general are not very strong in China when it comes to ostomy care products. Coloplast enjoys a dominant position. On the other hand, a number of local manufacturers are getting stronger. They might become competitors in a not too distant future. As regards competitors on the wound care market, all competitors are here and they are chasing us constantly - but we are still leading the market and intend to keep that position.”

How does the “stimulus-package” influence the Chinese healthcare sector?
“The stimulus-package has not affected our sector as much as we hoped. The principle of the Chinese government’s healthcare investment is to extend the “basic” coverage to a wider community.  Thus, majority of the funds are used to improve and to establish basic medical infrastructure in the rural areas and essential medicine reimbursement for the previously uncovered population. So the package doesn’t really affect our business.”

About Coloplast in China:
Coloplast started out in China in 1995 with a small plant and one Chinese distributor. In August 2007 a new factory (2300 m2) was established in Zhuhai. Today Coloplast has 550 employees at the factory and 200 staff members at 22 Coloplast sales offices across China. Coloplast is number one in China in ostomy care and wound and skin care but a small player in urology and continence care.
www.coloplast.com