Fosun Pharmaceutical wants to be the Xiaomi of China’s drug industry
With a focus on overseas emerging markets, Fosun Pharma wants to challenge western rivals the same way Xiaomi did with Apple in smartphones
Shanghai Fosun Pharmaceutical Group is taking a page out of the marketing playbook of China’s smartphone makers with a strategy to compete with western rivals by offering lower cost medicine for the global market.
A unit of Fosun Group, one of China’s most aggressive buyers of overseas assets, Fosun Pharma wants to replicate what China’s Xiaomi did to global smartphone makers, especially in emerging markets like India.
“We have a similar development strategy to Chinese phone giants that produce high quality but much cheaper models,” said Scott Liu, CEO of Shanghai Henlius Biotech, a drug research arm under Fosun Pharma. “We can produce drugs that meet European Union standards but with a much cheaper price, which is our competitive edge,” he said.
China is the second largest pharmaceutical markets in the world, and is forecast to grow from US$108 billion in 2015 to US$167 billion by 2020, representing annual growth of 9.1 per cent, according to a 2016 report from the US International Trade Administration.
Accounting for 17 per cent of China’s total health expenditure – or US$78 per person – pharmaceutical sales have seen rapid growth amid Beijing’s national push to encourage domestic companies to develop original and generic drugs, with the latter category dominating the mainland market with 64 per cent of total drug sales last year, according to the report.