The world’s largest pure-play medtech maker is looking to enlarge its annual sales growth in emerging markets to 15% from 12%, CEO Omar Ishrak told The Wall Street Journal. Only about 5% of the company’s global revenue, which was $20.3 billion for the fiscal year ended in April, now comes from China.
The Chinese medical device market is expected to be the world’s 3rd-largest, with a $18 billion value by 2018, according to London-based consulting firm L.E.K., the newspaper reported. The change will edge out Germany, currently the 3rd largest market, and put China just behind the U.S. and Japan, according to the report.
Medtronic will focus on what it calls "value products" for a critical growth market full of patients who can’t afford it’s high-end offerings, Ishrak said. About 70% of sales in China come from mid-range and value products, according to McKinsey & Co.
“We’re completely bullish on China. It’s a numbers game. This will be the largest market and it’s not a debate. It’s a matter of when," Ishrak told the Journal. "This is 1 of the few countries in the world where the local market potential itself and the volume it can generate will justify itself."
Medtronic will also be looking to acquire domestic medical device firms in China, though the company did not indicate if it was currently in negotiations with local firms, according to the paper.