The toughest overseas expansion: breaking into the high-end medical markets of Europe and America
In the field of innovative drugs, an increase in BD transactions represents an industry leap. However, for medical devices with shorter commercialization cycles, the overseas expansion of high-value consumables, which hold the highest value in the industry, directly confirms the industry's recovery and growth in competitiveness.
According to the H1 2025 financial data, the overseas expansion of Chinese high-value consumables is witnessing a qualitative leap, with orthopedic high-value consumables emerging as the unexpected frontrunner in international markets.
According to Southwest Securities data, in terms of sub-sectors of medical devices, the progress of going overseas is low-value consumables > equipment > IVD > high-value consumables, with overseas revenue accounting for 65%, 21%, 17%, and 11% respectively. In the H1 2025 financial report data, the average proportion of overseas revenue of listed orthopedic companies is close to 20%.
Overseas markets become the second growth curve for Chinese orthopedic companies. In the first half of 2025, Double Medical's overseas revenue increased by 50.84% year-on-year. Chunli Zhengda Medical also mentioned in its semi-annual report that the company is steadily advancing its expansion into international markets, with export business continuing to rise.
From the perspective of overseas markets, high-value orthopedic consumables have successfully broken through into mature overseas markets, achieving large-scale exports to countries such as the United States, France, and the United Kingdom.
As we all know, it is difficult for orthopedic high-value consumables to go overseas. The clinical cost and academic resources required overseas are high. How do domestic orthopedic high-value consumables enter the world's most inaccessible operating rooms?
The high-value orthopedic consumables market in Europe and the United States is highly mature: large scale, strict regulation, high medical standards, and long dominated by established giants. For Chinese companies, the real barrier is not technology, but "trust" – how to make hospitals, doctors, and patients believe in a latecomer from China.
High-value consumables face greater challenges in going global compared to medical devices, as it takes a longer time to build trust. The procurement of equipment is mainly decided by hospitals, with a focus on cost-effectiveness. In contrast, the use of high-value consumables is primarily determined by clinicians. Companies need to train doctors and accumulate sufficient clinical data. However, most Chinese companies lack the ability to provide academic support overseas, making it difficult to achieve internationalization of high-value consumables solely through reliance on distributors.
High-barrier mature markets are not monolithic either. Chinese companies are using innovative therapies to carve out an entry point.
An industry insider stated, "for new entrants to increase market share in a mature market, the key lies in unique innovative products. If they promote products that already exist in the market, doctors will definitely choose the brands and products they are accustomed to when making decisions."Therefore, the uniqueness of the product is quite critical when entering a new market.”
Taking Shanghai Sanyou Medical Co., Ltd. as an example, its internationalization strategy is different from that of most orthopedic leaders. Most orthopedic leaders simultaneously target both high-end mature markets and emerging markets, with a focus on emerging markets represented by Southeast Asia and the Belt and Road countries. But Sanyou Medical chose to focus on the high-end markets in Europe and America, directly facing overseas customers. Focusing on the high-end market requires higher R&D investment and a deeper understanding of local clinical needs.
In the U.S. market where the cost-performance advantage of Chinese products doesn't work, Sanyou Medical has played the innovation card. In the high-end market, Sanyou did not directly compete with Medtronic and Johnson & Johnson using traditional spinal fusion products. Instead, it focused on promoting innovative therapies: the JAZZ Band series. The JAZZ Band is suitable for posterior spinal fixation procedures in the thoracolumbar region (T1-L5) and is used in conjunction with other components of the same series of spinal internal fixation systems to provide ligation fixation. It is particularly suited for complex surgeries such as spinal deformities and complex fractures. This product has gained recognition from many established orthopedic centers overseas.
Shanghai Sanyou Medical Co., Ltd. plans to continuously export innovative therapies to the U.S. market. Focusing on innovative explorations in spinal surgery, the company integrates high-precision registration, high-precision positioning, and ultrasonic bone scalpel technology to address clinical surgical challenges. Its innovative pipeline primarily includes the Chunfeng Huayu intelligent surgical robot, the Shuimu Tianpeng ultrasonic bone scalpel, and the JSS innovative posterior screw-rod system.
This "innovate-to-win" strategy quickly opened up the U.S. market. In terms of performance, Sanyou Medical's overseas revenue reached RMB 86.4024 million in the first half of 2025. In the second quarter alone, Implante, Sanyou Medical’s overseas holding company, achieved sales of 3.231 million euros, a year-on-year increase of 71%. Implante's U.S. business in the second quarter grew by 444% year-on-year, surpassing France for the first time as the largest market. The development of ultrasonic bone knives also showed a strong upward trend, especially in the U.S. market.
Overall, entering the high-end markets of Europe and America is the inevitable path for domestic high-value consumables companies to achieve leapfrog development and become truly globalized enterprises. Companies need to maintain strategic resolve: recognizing that this is a "marathon" requiring continuous investment and patience. At the same time, they should adhere to value creation, always focusing on clinical value and patient benefits as the core.
Entering overseas mature markets, establishing connections with key KOLs, cultivating the market, and exporting innovative therapies is a long-term process, while acquiring overseas brands is an efficient go-global strategy that can accelerate the entry into mature markets.
Sanyou Medical's core product for exploring overseas markets, the JAZZ Spinal System, came from an acquisition. In 2024, Sanyou Medical invested 5 million euros to gain control of the French orthopedic company Implanet, which has become Sanyou Medical’s main platform for overseas expansion.
Entering mature European and American markets through mergers and acquisitions has become a consensus among orthopedic listed companies. It is reported that several listed companies in China are also exploring overseas market sales through acquisitions. Double Medical believes that choosing the right partner is a key step in promoting overseas sales. The company is open to mergers and acquisitions, and if there is a suitable target in the future, the company will not rule out enhancing its comprehensive competitive strength in the overseas market through overseas acquisitions.
Chinese orthopedic companies prefer to acquire overseas "small and beautiful" innovative companies rather than channel companies, favoring disruptive innovations that meet market demands.
Chen Min, Chairman of WEGO Orthopaedic Industry Group, once said, "for markets represented by Europe and the United States, given their high emphasis on innovation, R&D, and product iteration, WEGO will leverage this to strategically position and fully utilize the important role of our R&D centers. In these countries, our innovation R&D centers will actively collaborate with the venture capital departments responsible for investment and mergers and acquisitions. Focus on these 'small but beautiful' companies and acquire them at a relatively fast pace. The companies tend to have strong product IPs, R&D teams, and market access capabilities (such as MDR certification).”
However, acquiring overseas enterprises is not as simple as imagined. It not only tests the ability to understand overseas clinical needs and select targets, but also examines business integration, supply chain coordination, and global operational capabilities.
In 2013, MicroPort Medical acquired OrthoRecon from Wright Medical Group for $283 million in a "snake swallowing an elephant" deal, gaining the artificial joint business, with expectations that the artificial joint business would capture around 30% of the market share in China. However, since the acquisition, MicroPort's orthopedic business has continued to incur losses, dragging down the group's performance. In 2024, the orthopedic business also faced challenges from supply chain instability and overseas inflation, leading to increased costs.
It can be seen that mergers and acquisitions are not the final destination for going overseas. Subsequent issues such as supply chain integration, doctor training, and market cultivation need to be addressed.
For high-value orthopedic consumables to truly go global, it's not just about the act of "going overseas," but also about a complete transformation of their "internal capabilities."
An industry insider told vcbeat, "compared with international advanced levels, Chinese enterprises have gaps in production automation and precision manufacturing, which directly affects product quality and production efficiency. Enhancing manufacturing capabilities and achieving intelligent manufacturing are key for companies to improve their competitiveness."
Mature overseas markets involve capacity upgrades in every aspect of product design, R&D, production, and manufacturing. On the one hand, for foreign trade-style exports, orders typically have short delivery times and numerous urgent requests, making it difficult for traditional production cycles and scheduling capabilities to keep up. On the other hand, upgrading the overseas value chain inevitably involves transitioning from the low-profit OEM model to the ODM (Original Design Manufacturing) model, which requires involvement in front-end design and the ability to quickly respond to customized customer demands.
While domestic companies are building leading product capabilities and focusing on R&D innovation, they must also promote intelligent manufacturing, which is a foundational capability for entering mature overseas markets.
Therefore, the core of the next round of competition is the double helix of "product power + smart manufacturing power": on the one hand, using continuously iterative R&D innovation to create differentiated products, and on the other hand, using flexible smart manufacturing to scale lab results rapidly, compliantly, and at low cost. Without either, going global will still be like "dancing with shackles on".
The export of high-value orthopedic consumables in China is an evolutionary history from "price-driven" OEM exports to "technology-first" brand output, and from "peripheral exploration" to "core breakthrough." Behind this evolution lies the combined impact of policy pressure, domestic demand upgrades, and technological accumulation. In the future, successful companies will be those medical technology enterprises that are guided by clinical needs, driven by technological innovation, and supported by a global vision and localized operations.
【Huadian Securities】In-depth Company Report: Shanghai Sanyou Medical Co.,Ltd. (688085): Spinal Concentrated Procurement Clearance, Global Layout of Spinal Robots + Ultrasonic Bone Knives
Setting Sail Overseas: Formulating a Differentiated Strategic Layout, Southwest Securities