Growth of share of Chinese producers of high-tech medical equipment on Russian market: reasons and prospects

Abstract

Russia is the largest market for medical equipment in Eastern Europe and has great potential for further growth. This situation can be explained by the high percentage of the country's elderly population, increased attention from the state and the existing strategic plans in this area, as well as due to the high need of medical equipment modernization. However, the demand for medical devices in Russia is mainly met by imported products. The level of imports to the Russian Federation ranges from 85 to 45% of the total market volume. Chinese manufacturers during last 5 years (2017-2021) due to lower prices, combined with a sufficiently high quality of equipment, constant innovations, and high attention to the demands of customers are gaining a significant share of Russian import of medical equipment and gradually replacing traditional international players. The aim of the study is to define the main reasons for strengthening the role of Chinese medical equipment in Russian market. Based on this aim, the research question can be formulated as follows: How do Chinese companies manage to strengthen their influence on the Russian market of medical equipment? According to above research question we can formulate objectives of the study as following: • provide an overview of Russian medical equipment market. • identify the main reasons for strengthening of the role of Chinese medical equipment imports in Russian market. • analyze the role of COVID-19 pandemic on the imports of Chinese medical equipment to Russia and its future development prospects. Methodology. For this study, statistical information on the volume and structure of imports of medical equipment to the Russian Federation will be analyzed from the sources of the Russian Customs Service. The content-analysis method will be used to analyze a number of documents, in order to define the legislative framework of the Russian medical equipment market. We use the method of questionnaire to better understand and measure in numbers how specialists assess the current situation of the Russian market of high-tech medical equipment. We use the method of in-depth interviews with representatives of Chinese companies on the Russian market to get important insights about what strategies Chinese companies use to penetrate the market and increase their share. The main factors that affect the success of Chinese manufacturers in Russian market are the low prices, which becomes a key advantage in public procurement of medical equipment, as well as the constantly improving quality of the equipment supplied and close attention to the needs of Russian customers. In addition, many Chinese companies provide a wide range of their products, often delivering superior products of Western and Japanese companies in terms of price-quality parameters in each price segment. The COVID-19 pandemic has shown that Chinese manufacturers have chosen the right strategy to enter our market. Good pricing, constant attention to Russian customers, range assortment and innovative products help Chinese companies to strengthen their role in Russian market. In 2020, China replaced long-time leader Germany as the main supplier of imported medical equipment, and the supply of goods came close to $1 bln.