Medical Design in China – Interview with Quan Shan

What are major differences between the Chinese and the German market?

QS: When we talk about the market in general, the difference between the Chinese and the German market is how people purchase. From my experience when I lived in Germany, there are few options in consumer goods. While in China, production and manufacturing capacities allow us to have relatively more options, though we also export huge amount of goods to the whole world. It is good for consumers but not for manufacturers in such an intense competition. With plenty of options, Chinese tend to be pickier when they choose certain products.

Does this also apply to Medical Design?

QS: Yes, there are numerous varieties of product and service providers thus the competition is higher in comparison with other countries. We have a wider range of different brands with a strong international background which cover top-tier medical product requests here in China. Not only that there is already a high competition between all Chinese brands, with more international brands joining, it can get very tough in middle and entry ranges, too.

In contrast to the intense competition in China, in Germany, it tends to be more regulated and organized. It is difficult to have well implemented regulations due to diverse regional situations in China. You need to figure out the different circumstances even for the same product in different locations. For instance, the strong manufacturing supply resources in south China and strong state-owned enterprises in North China result in different local policies.

Are there other aspects that companies need to consider if they want to cooperate with a Chinese company?

QS: Foreign companies usually start with a local partner as a sales representative in the early years which also helps them to get licenses for imported products from abroad. Later on, they would try to produce locally to lower the costs of production and shipping bills. Especially for mid-level or entry-level products, that’s the key in order to keep in competition.

There are different strategies, ranging from importing and selling products which are made and certified abroad with licences in China to local manufacturing of certain products with different kind of certifications in China. Localization of some products might need changes in the production process, so it might require to repeat the development from the very beginning which certainly leads to additional costs. We can still see that most international brands have components supplied from China or have sales plus service here in China instead of having their whole team and the whole process here, such as R&D.

Can you name specific regulations which are important in China?

QS: For the medical devices and products, there are three class levels. To get a license for class one and two, certain references from existing models or previous developments are helping to accelerate the procedure. For class three, usually clinical tests and certifications are mandatory. That means you need to arrange patient-related tests which usually last a long time and are also limited by location and patient choices. You may need to figure out a way to do all these clinical tests in China. This may delay the whole plan for another year and the product will be late into market competition, so you should ask yourself: Am I really going to China or not? This year or next year? Or maybe five years later, when we have a new product?  

Do you have any recommendations from your personal experiences with WILDDESIGN?

QS: The Design work is basically not that different in China than in Germany, as it is a part of the product development process. But a Chinese company sees a design agency rather as a service provider than as a partner, or as an external input to fill the vacancy of their own team with engineers and internal designers. This kind of relation makes some of our work a bit difficult in the beginning, like certain internal decisions are not well-communicated with us. Same situation happens in Germany, too. The early projects are sometimes not smoothly executed before we can build up trust for each other after two to three years.

It is more difficult in China to switch from a service provider position into a partnership relation. Most local companies need us for the first couple of years while they are struggling with their brand image combined with their product image until they feel more confident to face the market. They take more responsibilities from the external design agency back to their own team, in order to reduce the cost, to accelerate the process or maybe just to make it easier to manage.

What is the difference between medical and consumer products?

QS: Medical products usually take more time in development than consumer products. It takes at least a year or two to bring a product to the market, for a nice-looking family it may take five years. During this period, the clients will stay with us because of a strong belief through cooperation that we are good. But usually, we are constantly demanded to offer more qualified output, more advanced modifications and more communication. As designers, we work for the future. It is hard to predict the future and even more difficult for medical devices because the market can change fast within the long product development phase, like Covid has shown. All companies should consider the risk in the investment in a new product.

Twenty years ago, few Chinese were talking about industrial design or product design. When we talked about design, we rather thought about fashion, cosmetic or interior design in that booming age of mass-production. Now, there is a much higher level of consumer needs beyond just basic satisfaction.

The same thing happens in the medical field. Based on the increasing needs, the environment in the hospital is much different from ten years ago. It is more open, spatial, warm, colourful and bright everywhere. Not only the environment has been improved, but also the service, how medical staff treats patients, which is more difficult in China with such a big amount of patients in a hospital. At the same time, the requirements for good medical products and devices are rising and the need for design agencies, especially for professional medical products or laboratory devices, has increased quickly over the last 10 years.

Are there any further notable trends in China?

QS: Companies are asking more often about how to build up a strong brand image instead of talking directly about their products. This kind of levelled-up understanding was not common before. The product is still the centre of their business but gradually, clients talk more about their brands. This is a sign showing that many investors or top managers are more aware of that they should consider a brand in long-term instead of just making short-term business. If they choose to invest into medical products, it means to plan for at least ten to twenty years. The brand image is getting already important, even when they don’t have a product yet. Sometimes, we are discussing a logo or a name in the beginning which should be attractive not only locally in China but also globally.

What impact has Covid 19 had on the medical industry in China?

QS: Quite a lot. Some medical manufacturers for special goods became aware about this change for the first time when some cities were locked down in China. Many medical manufacturing companies were supported by the local government after their production stopped. We hoped that the pandemic would take one year until the situation gets better, but now we see it might take two years or even longer. Not every company gets support from the government and that is, especially for small companies, crucial. We had projects pending or being completely cancelled in the beginning of the pandemic. Conferences and professional fairs are postponed indefinitely, it is not possible for any company to grow. That was a very struggling period in the beginning.

Nevertheless, some companies figured out good options. For example, mask or quick tester manufacturers accelerated their production in an unbelievable speed for big orders from the local or central government. Their factory capacity was increased in a very short time but they know that they have to think about what to do in the future, when the requirements decrease after a year. They may try to establish links to the hospitals with continuous needs for supplies after the pandemic or quickly develop new product concepts to be appealing for temporary medical use. Breathing machines, for instance, are not only popular during the pandemic but in general widely needed.

One last question: The role of usability on the Chinese market?

QS: Usability has been a very hot topic in Germany and Europe in the last five years or even longer under the pressure of the new regulations, just at the same time as in the US for the FDA. It is similar here in China: If the regulation is not mandatory, most of the manufacturers are just preparing and tend to do nothing to save cost. The Chinese government started to reform the medical institutional structure and regulations. Experts from Germany and Europe are helping us to figure out what the European market is doing concerning these regulations and also to guide us building usability test centres. I know Europe has slowed down the process during Covid. Here in China, the process will also be delayed due to the lack of experienced staff in usability centres and a final version of the regulations.

Big brands in China are exporting products towards Europe and the US, they got ready for this regulation for the export but also prepared for the release of usability regulations in China, too. For small companies, all they know about usability is just a basic definition and not much about the process. This request is coming very slowly, so they will just put it on their list with a low priority. It is not the case that they could consider it at the very end of the product development. So, I am hoping this will change soon. Things could change quickly and are followed up with very high efficiency when they are coming from the top in China.

Any final statements?

QS: In general, if companies come to China, differences are not just on the business level but also on the cultural level. I know a lot of foreigners stayed here for many years and they speak Chinese quite well. They know the Chinese culture has a lot of influence on how we do business, how we consider partnership and relations. That word, relation, is quite meaningful for us. So, this will set up a different mindset for the decisionmakers in Chinese companies and this will be also brought into a cooperation with a foreign company.

Thank you, Quan!

Want to know more about this topic? Write to china(at)wilddesign.cn

Originally written by Lydia Münstermann, 02. November 2021. Last updated 18. July 2022