We got the opportunity to ask Ying Cheng, Founder and CEO of Innofusion Technology and Design AB, a few questions on how Swedish life science companies can benefit from collaborating with SinoPharm Group.
Could you describe Innofusion Health and your mission with SinoPharm Group?
- Innofusion Health, established in June 2014, is part of the Innofusion Technology and Design AB. Innofusion Health partners with Chinese life science companies and investors to help Swedish companies to enter or grow in the Chinese market, to acquire funding for product development, to form partnership with Chinese counter-parts. Notably, we are the authorised agent for SinoPharm group, the government owned and largest business group in life science in China. It has distribution channels covering over 40,000 hospitals and clinics. Most recently it has started acquiring hospitals. As the authorised agent, we recommend and help the business group in innovative medtech and biotech products, and investment project with great potentials.
Who in Swedish life science would benefit from a collaboration with SinoPharm Group?
- First, companies of all sizes that have innovative life science products of great market competitiveness that are already commercialised and that are not in the Chinese market yet or that has limited sales volume in the Chinese market would benefit. Products categories include medtech products for hospitals/clinics or patients; biotech and pharmaceutical products; and health products uch as functional food e.g. probiotcs to reduce risk of certain disease. The immediate priority for the next six months is given to medtech products.
- Secondly, companies that need funding for medtech products at a late stage of development (e.g. a medtech device just before obtaining CE mark). Finally, medtech, biotech or pharmaceutical companies at the exit stage that are looking for buyers would gain from collaborating.
In your opinion, what are the major hurdles that Swedish medtech companies run into when trying to access the Chinese market?
- The most challenging hurdle is that the Chinese culture, political environment and health market are enormously different from that in Sweden and are unknown to many of the Swedish companies. More specifically, there are three major hurdles. First, the life science market in China is huge but very fragmented. The web of hospitals and clinics is very complex to navigate. There are many companies from different regions, of various specialisations, of different market access, and of very different business cultures. It can be a challenge for a Swedish company to find and form the right partnership.
- Secondly, the business and political culture poses as another hurdle, for instance the continuous evolution of the law and regulations applied to CFDA registration, and a fine line between dangerous bribery practices and normal and necessary network building.
- Finally, third hurdle is the competition. Swedish companies face competition not only from the Chinese but very importantly from other countries in particular the US. While we are working hard to enter the American market, the American companies have had already an established reputation in China. Needless to say, big brands in medtech such as GE and Philips are tough for Swedish companies to compete with. Innofusion can help Swedish companies to overcome the first two hurdles. For those innovative solutions with unique competitive advantages, the ideal entrance to the market is to partner with Sinopharm groups for its sales. Sinopharm group is the only business entity in China that has distribution channels with penetration to all the hospital and clinics in all the provinces and cities. Once a product is approved to be part of the company’s product portfolio, its requirements of CFDA application, clinical trials and marketing will be greatly facilitated.
