There are many factors to consider when you plan to enter the medical market in another country. Every country requires different market entry strategies – and countries in Africa are no exception.
At this year's MEDICA, one theme in the MEDICA TECH FORUM focused on successful strategies to enter the medical market in Africa. In this post-MEDICA 2021 review, Erik Deitersen discusses important aspects in this setting, and talks about Africa’s current medical market setup.
Mr. Deitersen, what must one generally consider when accessing the international medical market?
Erik Deitersen: You must keep in mind that every country has its own way of doing business and different regulations, cultural distinctions, and other factors that must be considered. Being the market leader in Europe or the United States does not mean you automatically have a secure pole position and subsequent advantage over other competitors in Africa, Asia or elsewhere. Much depends on the requirements and challenges of the respective country.
What are the particular challenges when companies plan to access the medical market in Africa?
Deitersen: Like any country and region in the world, Africa pursues its own approach. There are also distinct differences within African nations you must observe. For example, one medical device manufacturer had been very successful in the Kenyan market for several years. When the company sought our help for market entry in Nigeria, it became obvious that this market has an entirely different structure, thus necessitating a sales strategy adjustment. Based on my experience as a European and German citizen, the heterogeneity of Africa is often massively underestimated. Ultimately, Africa comprises many distinctive markets, and each is unique and comes with its very own opportunities and risks. It’s crucial to understand your starting point. What is the best approach for the respective country and who are the right partnerships I must secure in this setting? Realistic thinking and planning are also critical: Don’t be too optimistic in your approach, thinking “Africa is the next China” – as China was and is probably unique in global history – or too pessimistic. You must understand the opportunities and possibilities and determine the right approach to success.
In many countries in Africa, incomes are rising and economies are developing.
What are the present medical market challenges as it pertains to Africa?
Deitersen: Global issues like the COVID-19 pandemic also impact Africa. When it comes to importing products, countries in Africa are just as affected by supply difficulties as other countries. From a long-term perspective, Africa – unlike Europe or Southeast Asia – is very large, heterogenous, and has a lower level of economic integration. What’s more, Africa is rapidly changing and has many young people and emerging and developing markets. Added to this mix are other common challenges that apply to every market and especially every emerging market in the world. This includes poor infrastructure and corruption in government and business, though it should be noted that the view from afar – from a German perspective, for example – often depicts a picture that is worse than reality.
Which medical equipment manufacturers should consider expanding their business into the medical market in Africa?
Deitersen: Since medicine is a broad field and South Africa cannot be compared to Rwanda or Egypt, diversification is a key strategy. Africa’s population is comparatively young, with the highest share belonging to the low to middle income class. For medical equipment manufacturers, this means products – whether it’s a machine or pharmaceutical product – that are positioned at the lowest level of Maslow's hierarchy of needs tend to have a larger market in Africa. It is all about meeting existential challenges. Larger markets mean bigger opportunities for companies, but it also denotes stronger competition, requiring businesses to extend more effort to be successful. Some African economies are growing fast, and incomes are rising. This opens new markets that move beyond meeting existential needs. These new markets are often served poorly or not at all. This means new opportunities to become a market pioneer and get a head start that can result in more profitability in the medium to long term. In some countries, laboratory equipment is a great example of this. Right now, you have more and more on-site testing services for medical purposes or to facilitate product certification. To cut a long story short, the best time to enter the medical market in Africa was yesterday, but the next best time is now and not tomorrow.
How did you like the MEDICA 2021 Trade Fair?
Deitersen: We were obviously very delighted to give our presentation at MEDICA. The organization was excellent, and the event flowed smoothly. We are also very excited to see that both organizers and visitors of the trade fair view Africa as a chance for business. I believe Africa is one of the most promising regions in the world that presents enormous growth and exciting investment opportunities to global business for expansion. It has many problems that can and must be solved.