LONDON--(BUSINESS WIRE)--A well-known market intelligence company, Infiniti Research, has announced the completion of their recent article on market entry barriers to the Chinese pharma industry. In this blog, experts at Infiniti highlight some of the market entry barriers that foreign pharma companies face in the Chinese market and the key strategies to overcome them.
Expansion into emerging markets is vital for pharma companies to ensure continued growth, but both cultural and economic market entry barriers can pose problems. China’s growing middle class and an ageing population means new opportunities for companies to widen their portfolio in this area. However, entrants into the Chinese market encounter several challenges while expanding their operations effectively in China.
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Chinese market entry barriers
Identifying untapped market potential
The scale of the country could prove to be one of the key market entry barriers for pharma companies planning to enter the Chinese market. Mergers or joint ventures with established Chinese firms who have built up knowledge and a profile in these areas is one of the best ways to overcome this challenge.
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China’s overlapping demographics with each of them requiring a tailored approach is another important barrier that pharma companies must overcome. Inadequate knowledge of geographical and cultural differences in Chinese markets could also pose significant market entry barriers for companies in the pharma sector.
Planned price restrictions
The Chinese government has recently indicated that they intend to review their current drug pricing scheme, which could increase the market entry barriers for foreign companies. They are also planning to dramatically increase the number of drugs covered under the essential drugs list.
After the drugs have made its way through the registration process, it will need to be distributed, and the fragmentation of the supply chain makes this a much more complicated process in China. There are often several layers of distributors to get through before reaching the customers in Chinese markets, which raises the distribution costs and also diminishes supply chain visibility, making it difficult to monitor the product once it has left the factory, contributing to further market entry barriers.
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About Infiniti Research
Established in 2003, Infiniti Research is a leading market intelligence company providing smart solutions to address your business challenges. Infiniti Research studies markets in more than 100 countries to help analyze competitive activity, see beyond market disruptions, and develop intelligent business strategies. To know more, visit:https://www.infinitiresearch.com/about-us