Overview of In Vitro Diagnostic Distribution Market

Since the end users of in vitro diagnostic products - medical laboratories - are located in different regions, service providers usually form different main coverage areas according to different regions and different distribution brands. At present, most of the Chinese medical laboratory service providers are regional companies in the local province. There are a little cross-regional service providers could provide intensive supply chain and laboratory comprehensive services.

In recent years, because of the optimistic attitude about the development of IVD industry, various VC and PE investments are very active. There are more and more listed companies in the field of in vitro diagnostic distribution, and the number of companies with capital advantages is increasing. In order to obtain a competitive advantage and expand the scale of the company and the market share of products, these companies form and improve their own product areas and distribution channels through mergers and acquisitions of companies with advantages in technology or channels. It can be said that the industry reshuffle is coming.

Existing Enterprise Types In the Field of IVD Distribution

1. Traditional distribution companies and upstream manufacturers involved in the distribution field. Such enterprises are mainly listed companies. They have large scales, relatively sufficient funds, excellent professional capabilities, and a profound industry background.

2. Third-party laboratory companies. Many of these companies have also been listed and have the advantages of the first type of companies. But there are obvious differences in the choice of business models, and they normally appear in the form of downstream companies in the industry.

3. Large pharmaceutical companies entering the field of in vitro diagnostics distribution. Such companies include many industry oligarchs with strong channel capabilities and sufficient funds, but their professional capabilities in this industry are weak.

4. Small and medium channel business enterprises. Facing the era of industry intensification, this type of enterprise appears unsuitable in terms of size, capital, and professional capabilities, but channel capabilities are still an advantage for them. The outstanding ones are the main targets of mergers and acquisitions of the first three types of enterprises.

The Market Environment in the Chinese IVD Distribution

In recent years, the Chinese IVD has entered a period of rapid development. Although it started later than European and American countries, due to the aging of the urbanization population, the increase in medical investment, the upgrading of people's consumption level, favorable policies, breakthroughs in diagnostic technology, the in-depth medical and health reform and other factors, the in vitro diagnostic industry in China continues to accelerate, and the number of outstanding listed companies and innovative companies has increased significantly.

As a new mode of IVD distribution, the centralized procurement business of laboratory examination department satisfies the business needs of different parties, becoming one of the development trends of Chinese IVD distribution. The centralized procurement model has very high requirements on the funding and management capabilities of channel providers. It is expected that a few qualified IVD distribution companies will survive and grow in the industry reform. On this basis, they are predicted to achieve business extensions and profit enhancements.

Generally speaking, there are still few Chinese companies with strong comprehensive capabilities. The top companies in the industry mainly have competitive advantages in a certain field. At present, the diversified development of Chinese IVD companies mainly has the following five characteristics:

1. The top-ranked companies in the subdivision field rely on the formed competitive advantages to penetrate into other subdivision fields of in vitro diagnostics to enrich the product range;

2. Reagent manufacturers increase instrument production and instrument supporting capabilities, and instrument manufacturers increase reagent production capacity to enhance market competitiveness;

3. Start to actively explore overseas markets;

4. Some companies that provide third-party inspection laboratories appear in the industry;

5. Some non-IVD production-type commercial enterprises quickly grab market share by entrusting hospital consumable procurement and integrating sales channels.

With the improvement of Chinese leading enterprises in technological research and the expansion of their business scale, it can be expected that the industry market concentration will further increase and their competitiveness in the high-end market will also rapidly increase.