Day 10 - May 31st Thursday (GM, Boston Scientific)

General Motors - Chin-Lim Ong, Product Research Manager

Car manufacturers are having a hay day in China. The demand has been growing rapidly and the market has never been so strong. However, there are many hurdles that the car companies have to surpass. Educating the customer is one of the biggest challenges that these companies are facing since many car buyers are first time buyers. These buyers have never owned cars and this is one of their big-budget purchases. Hence they want to make an informed decision before buying their dream car. Two of the biggest product attributes that these consumers look at before making the purchase are cost and quality. Cost is very high on the list and quality is further down the list. Auto manufacturers are also facing severe IP issues from local companies that have had a joint venture with several foreign players. These local companies are now spinning off their own companies and using the technical know-how from what they learnt from their joint-venture partner. Several speakers discussed about the brand conscious of the Chinese customer and it is highly evident when they are purchasing cars.

Boston Scientific – Shankar Kaul, China Country Manager

Mr. Kaul gave us a great overview on the Chinese medial device market. This was one of the visits that I was extremely excited about since I was going to an internship in a medical device company in USA. Mr. Kaul spoke about the shortage of trained doctors and nurses and how that is affecting patient care. Additionally, there is a shortage of education programs in the medical field which is adding to the scarcity of trained medical professionals.

Boston Scientific China has taken some drastic steps in China to break away from the traditional distribution model. This has allowed them to lower the cost to their customers (hospitals). However, they experienced negative profits for the first 3 years, but since then the profits have grown. This shows that China is made for longer-term strategies rather than short 2 or 3 year strategies. Companies that are planning to make an entry into the Chinese market need to keep in mind that realization of immediate profits might not be a practical strategy.

Reference to government relationship was raised again and Mr. Kaul’s statements agreed with our previous speakers. Boston Scientific has been very successful in maintaining and building new relationships with the government over the last several years.

A question on IP was asked since Mr. Kaul did not talk about it during his presentation. He acknowledged that IP was an issue but it was a common issue for several companies in China. I believe that rather than fighting against companies who copy IP, one must constantly innovate and move ahead of the copy-cat.