China LSHC Industry Survey Results: 2022 State of Industry in China

2021 Performance Review

How did your company perform (top line) in previous year?

Insights

• Overall – actual results in 2021 realized much closer to initial plans unsurprisingly given that 2020 plans were done pre-pandemic

• A large majority of the survey participants are WOFE’s for whom the 2021 results were on target or above (84%)

• Nearly one-third of large companies have experienced a financial performance below their plans (similar to last year survey)

Note: [1] Companies with revenue above 5 Bln RMB; [2] SOE: State-owned Enterprise; [3] POE: Private-owned Enterprise; [4] WOFE: Wholly Foreign-owned Enterprise

 

Your 2021 business performance was mainly impacted by?

Insights

• Similar to our prior year survey, the focus in 2021 remains on the commercial impacts, especially the regulatory related factors. Thus the impact of VBP and product launch are mentioned by a large majority from all

• As pandemic constraints changed in 2021 - hospital visit & access, were less of an issue compared to 2020

• Nearly half of respondents believe that the local partnership is a sufficient way for market penetration

• Localization of supply chain is mentioned interestingly by only a limited of respondents – and least by larger companies

 

Online/internet business channel plays critical role during the crisis period, does your company consider to increase investment on these new channels?

Insights

• Vast majority of all respondents indicate that investments into ‘online/internet based channels’ will increase going forward

• Consistent with prior year’s survey results – SOEs and POEs, have a less appetite to do so. While foreign invested companies (WOFE’s and JV’s) have substantially increased their focus to > 80% of all respondents (slightly increased from prior year)

• Foreign invested (JV & WOFE’s) and larger companies indicate that they prefer to expand using online/internet channel through dual angles: partnering but also doing some in-house directly – showing that the risk of dependency eventually requires attention

• SOEs and JV say not to have increased investments into online/ internet channels since a year ago

2022 Future Outlook

How do you foresee your 2022 China business outlook?

Insights

• The 2022 outlook is bright as 60% of them forecast to have over 10% revenue growth in 2022

• Impressive that 13/40 respondents (ca. 30%) from foreign invested companies (WOFE’s) expect growth to be above 15% in 2022

• In a very sharp contrast, 25% of SOEs respondents anticipate to have a revenue decline in 2022 

 

In your latest China market strategy, have you consider the following actions:

Insights

• The product portfolio and value proposition are the most important to large cos, SOEs, and WOFEs, while POEs and JV are focusing on developing China specific model (governance model and talent recruitment model respectively)

• The leverage of resources and policies in special zone (GBA & Hainan FTZ) are less important to all companies, where local government may have to invest more efforts to attract more companies to move in the region

• POEs and JV are both actively looking for partnership to achieve a faster market penetration in China

Note: [1] Companies with revenue above 5 Bln RMB; [2] SOE: State-owned Enterprise; [3] POE: Private-owned Enterprise; [4] WOFE: Wholly Foreign-owned Enterprise

2022 China LSHC Industry Outlook Survey

In Summary: China insight and outlook 2022: extracts from full survey report

	The influence power of government sectors is still increasing, especially with the medical pricing reform and data protection regulation updates
	More and more companies are formulating more and more a China-specific business model and strategy
	The pace of innovation growth has been accelerated as a result of the formulation of various partnerships and R&D investment