Evaluation of potential international markets

Making a choice which new geographic market or region to enter can be a tough one. 

First and foremost, don’t make a decision to enter a new market unilaterally. Get the buy in

from all internal stakeholders that will be involved besides sales. Consult with marketing, regulatory, manufacturing, legal and shipping. You may be surprised at the issues your colleagues raise that you had not considered before but can play an important role.

Is there a market for your device?

The first step in selecting a market is to determine if there is a market for your device. Let’s say you are a US manufacturer of devices used to treat diabetes and you are interested in entering the market in France. Sure, France is a large market but the prevalence of diabetes there is less than half from what it is in the US. By contrast, diabetes is 50% more common in Mexico than the US. Another example is where your orthopedic product, used in a medical procedure in Europe for joint reconstruction, is not used in China since the local way of working is different. 

You can do research online to determine market potential and there are also several independent research firms that publish exhaustive reports on specific device categories (but these reports can be expensive). Obviously, you should also visit competitor websites and determine the markets in which they sell their devices. Companies sometimes even list their distributors in specific markets. There are huge device tradeshows such as Medica (Germany), Arab Health (UAE), Hospitalar (Brazil), CMEF (China) and FIME (US) and they can be excellent sources of information on where companies are selling. 

Making an informed choice

It’s good to ask yourself following questions before making a choice:

• Is your solution actually being used in the target market? Sometimes a certain procedure is not recommended (or not reimbursed) and therefore a specific product is not being used

• Which competitors are active in the market and what is their product offering?

• What are the current price levels in the market for your product and can you meet these price levels?

• Is your product being reimbursed in the market? Who buys and who pays?

• What are the regulatory requirements for your product in a market or region before you can actually sell the product? In which countries is a medical device or IVD registration mandatory? 

We often get the question which market to enter first when you plan to go to for instance Europe, LATAM or the Middle East. The obvious choice might be the largest market. But the regulatory system in Brazil is more complex, the Brazil medical device registration process more time consuming and costly than several other markets in the region. The same applies to Saudi Arabia medical device or IVD registration. Germany is for many products the largest market in Europe but it might be less attractive from a reimbursement point of view. And other European markets could be more open to a new and innovative product. A possible strategy is to enter a smaller regional market (-s) first where the regulatory requirements are less strict, learn from that market and in parallel start the registration process in other, potentially larger, markets. 

By focusing on a few selected markets you can also consolidate your company’s presence in these markets, with the aim of securing constant sales growth. You might be able to adapt and improve your product based on experiences gained in each market. Costs are split over several markets which frees up additional budget for marketing activities. And being active in several markets diversifies your risks. 

There are of course other, more generic, elements as well that define the attractiveness of a market. For instance GDP growth and spend per capita. Country risks and the risk of local currency devaluations. Political (in-) stability and the interference of local politics in business activities. The existence of free trade agreements between your home market and the export market. The geographical distance to your home market and to what extent both markets are similar or not (business culture, language).      

Local or regional market intelligence helps to make the right decision. Market research will provide insight on the market landscape (e.g. size, epidemiology and disease prevalence, competition, customer needs and procurement system), regulatory and reimbursement aspects, medical endorsement and the patient care pathway.

Sometimes it helps to hire someone on the ground to do a more thorough assessment. A knowledgeable distribution consultant will have a good sense of the market for specific devices and can contact their local network to further assess the market and competition. This is something that would be challenging for you to do yourself. Luctor Medical has the experience to do local market research to help you make an informed decision. 

Determine the focus channel

The focus channel is where your customers are active and can differ per country for

the same product. For instance, in the UK the National Health Service (NHS) purchases medical devices whereas in the US local distributors often do business directly with hospital representatives. In markets where the government does not purchase devices, your channels may be hospitals, clinics, nursing homes, pharmacies or the home healthcare market.

Knowing who is buying your product and where your product is being used is critical to know as it will impact the decision which local partner or partners to work with. To which sector or network should they have access? Is it the private sector or government hospitals or both? Is it a tender driven market and do you need a local partner that has experience with the different phases of the tender process? The choice which market to enter first can be impacted by this as well knowing that the route to market will be longer in market A than in B.  

In summary, make sure you:

• Assess the true need for your product in a focus market

• Determine the competition level and their product offering

• Determine the price levels applicable in the focus market (s)

• Understand who is paying and who buying the devices (government, GPO, hospitals, other)

• Assess regulatory and reimbursement timelines/requirements

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