Although he officially took over as president of WS AUDIOLOGY China just last month, Bernd Wagner is no stranger to China's hearing aid market, a German man with more than two decades of experience in the global hearing aid industry who has frequently visited China for the past eight years. In the past two years, he has come to China every other month to pay close attention to the dynamics of the Chinese market.
The hearing aid industry belongs to the segment of the medical device field, and it is rare to be able to focus on this segment for more than two decades. In fact, before taking over as President of WS AUDIOLOGY China, Bernd Wagner had achieved great success in many different positions in the Sieweetto Group, including Global President of Swarmott NextGen, General Manager of Siemanto India, and Director of International Hearing International Trade at Siemens in Germany.
Bernd Wagner_WS CEO of Audiology China
According to the beijing hearing association's estimates, there are about 72 million people with hearing loss in China at this stage, but the wearing rate of hearing aids is less than 5%, which is far from that of developed countries. Such a market to be tapped, with broad prospects, is full of opportunities and challenges for WS AUDIOLOGY, and the Chinese team led by Bernd Wagner will also play a big role in the Chinese market.
Siemens Hearing - Swanto - WS AUDIOLOGY
Since Mr. Siemens first discovered the principle of hearing aids in 1878 and carried out the hearing aid business, Siemens hearing aids have been in a leading position in the world with their technical advantages, and the brand awareness of "Siemens" is a household name. In contrast, Sivantos, founded in 2015, is slightly less well-known.
In fact, the predecessor of the latter is the hearing business of the Siemens Group.
In 2014, Siemens Group announced that it would sell its entire hearing business to the investment company EQT Group (EQT) for approximately EUR 2.1 billion, and Siemens Hearing also officially changed its name to Siemens Hearing. Around 2016, many offline Siemens hearing aid stores have changed to the Xijia brand of Xiwantuo Group.
At present, the Worldwide, Swanto Group is second to none in the hearing aid industry, and one out of every four hearing aids produced in the world comes from Swarvant. It has four major brands of hearing aids, including Xijia, Oudesheng, Liston and A &M, of which XijiaSignia is the high-end brand with the first recognition in the Western market.
In March 2019, the merger of Xiwantuo and Weiting (English name Widex), which are the leading companies in the global hearing aid industry, was completed, and a hearing aid giant called WS Audiology Group was born, and became the world's largest hearing aid manufacturer in terms of market share.
WS Audiology
The WSAudiology Group is committed to improving the quality of life for more than 700 million people with hearing loss worldwide, with annual sales of 1.7 billion euros (EQUIVALENT TO 13.3 billion yuan). Together, the two industry pioneers, with more than 170 years of industry experience and one of the industry's largest R&D teams, will redefine the competitive landscape in 125 markets with integrated, multi-channel sales and distribution platforms in more than 125 markets.
The Chinese market has traces to follow
As an assistive device, hearing aids are far less wearing than myopic glasses or reading glasses in Chinese hearing impaired people. According to the beijing hearing association's estimates, there are about 72 million people with hearing loss in China at this stage, and the wearing rate of hearing aids is less than 5%, which is far from that of developed countries. "The number of hearing aid stores in Germany and China is the same, almost 6,500, but the population of Germany is only 80 million, and the Chinese is close to 1.5 billion." Bernd Wagner said he was surprised by such a gap.
In his view, compared with Western developed countries, China's hearing aid industry started late, to the present no more than 30 years, offline store infrastructure construction is not mature, the lack of professional talents, resulting in the number of hearing aid offline stores affect the accessibility of consumers; in addition, Chinese consumers are more inclined to online shopping, "online purchase of hearing aid related equipment Consumers there are 2 million people, accounting for about 25% of the market share." ”
It is precisely because Of china's hearing aid industry started late and there are deficiencies in consumer education, which makes consumers lack awareness of hearing aids. For example, although the cheap hearing aids purchased online can solve the needs of the moment, long-term wear will damage the hearing.
In Bernd Wagner's view, this is exactly their opportunity in the Chinese market. There are traces to seizing such opportunities.
Since 2011, Bernd Wagner has led a team in India to focus on the local hearing aid market. According to Bernd Wagner, as far as the hearing aid industry is concerned, India at that time had many similarities with the Chinese market. For example, the population base is comparable, in 2011, India's hearing aid market offline physical stores only 1200, serving 1.3 billion people.
BerndWagner's team mainly does two things, opening more offline physical stores, while carrying out e-commerce cooperation with other Western online media such as Facebook and Google to obtain online traffic, and transferring customer needs and services to offline physical stores. This online and offline dual-drive business model has been very effective in the Indian hearing aid market, and Bernd Wagner has successfully led India's Xiwantuo to become a leader in the local market.
It is on this basis that Bernd Wagner hopes to be able to replicate his successful experience in India to the Chinese market.
In fact, the similarity between the Chinese and Indian markets lies in the fact that the huge population base wants to find hearing solutions online, and offline physical stores are difficult to obtain offline customers. Although the traditional offline hearing aid fitting center can provide professional fitting services for customers, most of them can only passively wait for customers.
Bernd Wagner believes that these deficiencies are also the opportunities of WS Audiology - to build an offline retail infrastructure, and then do a good job of professional online marketing services - so as to effectively connect offline and online consumers.
At present, action has begun. On September 26 this year, Xiwantuo and Alibaba Health reached an agreement to carry out new retail cooperation with its brands Xijia, Xiwanbo and Alibaba Health in science education, remote technology promotion, O2O cooperation, cloud data application, and user in-depth services.
Price, product appearance and cognitive education
The aging of the population is a major factor in promoting the development of the hearing aid market. Generally speaking, after the age of 55 to 60, human beings generally have a loss of audiovisual ability, just like many people need to wear reading glasses when they are older.
According to United Nations standards, when a country or region over the age of 60 accounts for more than 10% of the total population or more than 7% of the total population, the country or region is judged to be in an aging society. At this stage, the proportion of people aged 60 and over in China in the total population has reached 15.5% and 10.1%, exceeding the above standards. It is expected that by 2040, the aging degree of Chinese population will further deepen.
"It's just that people don't want to show hearing aids like they show expensive watches they wear, even though it's just as expensive." Bernd Wagner proposed that psychological factors have a certain impact on the hearing aids worn by people with hearing loss, which is why elderly people wearing reading glasses are more common, but those who wear hearing aids are rare.
To solve this problem, in addition to strengthening consumer education and popular science hearing aid knowledge, there is also a very important reason for the design of the appearance of hearing aids.
"In 2000, there was a big change in the hearing aid industry around the world, before that, the hearing aid used the model of a prototype, and then applied digital technology, just like we replaced the original old mobile phone with the current smartphone." Bernd Wagner pointed out that the arrival of digital technology has not only improved the human voice recognition of hearing aids, but also greatly improved in appearance and size.
"How to make the size of the hearing aid smaller until it is invisible is a very big challenge, and now many of the products we have developed are very small in size, can be placed directly into the ear canal, or even completely invisible." In this way, people's resistance to wearing hearing aids has been greatly weakened.
Not only that, in terms of aesthetics, WS Audiology's hearing aids will also move closer to wireless headphones, "for example, Apple AirPods are worn by many people, and others will not feel strange." Our future hearing aids will have the appearance of AirPods, and provide services for listening to music and answering calls. ”
The Sierra Phantom series
In terms of consumer education, Bernd Wagner will also lead the China team to connect directly with consumers. The Chinese market has changed a lot compared to the past few years, and some social media platforms such as WeChat, Tmall, and JD.com have matured, providing conditions for enterprises to directly connect with consumers.
"We have already carried out communication with customers on these platforms, and we will increase our investment in the future, popularize hearing aid knowledge and proactively find potential consumers." Bernd Wagner believes that the above platforms are effective and more affordable, and while it is not excluded that there are many elderly people who are not familiar with social networks, their children are active on social networks and can help them communicate online.
"China's hearing aid market is in the shape of a pyramid, with a very large bottom and a small top, that is, a small number of people are pursuing high-end products, and most people need to obtain hearing aids with limited budgets." When asked about the impact of prices on consumer demand in the Chinese market, Bernd Wagner said that WS Audiology Group's products cover the needs of high-end and low-end consumers, which is enough to solve the key factor of product price.
"WS Audiology's hearing aid business consists of two aspects, namely hardware facilities and fitting services, both of which will cost a lot of money." In his view, hardware and fitting services can form a virtuous circle around product prices.
High-end patients not only choose expensive hardware products, but also enjoy the services provided by professional hearing fitting staff, while for consumers with limited budgets, WS Audiology produces the world's largest number of hearing aids, driving down product prices through a "volume-for-price" approach. In fact, for WS Audiology, even if the price of the product is lower, consumers need professional hearing assistants to help deploy, so the proportion of services to consumers may be higher in the whole.
In the past few years, Xiwantuo has continuously reduced the cost of services by continuously reducing and automating the service of providing consumers with online hearing tests and online fittings, so that the overall price can also be reduced to meet the price-sensitive consumers. This creates a virtuous circle. Many consumers have experienced significant improvement after using hearing aids for the first time, their acceptance of hearing aids is higher, and they are more willing to look for high-end products in offline physical stores in subsequent purchases.
Conquer this market
In March this year, the merger of Xiwanto and Weiting gave the newly formed WS Audiology Group two top products in the global hearing aid market, namely Xijia and Weiting, both of which focus on the high-end market. The advantage of Weiting's product is that it reflects the "most natural sound". Xijia has always been at the forefront of the industry's high-end technology, such as the first to launch a hearing aid that can be recharged repeatedly, and a hearing aid with wireless connectivity.
At the digital technology level, the challenges that WS Audiology overcome includes custom chips and battery life for hearing aids. Unlike other electronic chips, hearing aids require customized special chips, and the smaller they are, the more technologically advanced they are. At the same time, the service life and duration of the battery are also critical. "Apple AirPods can be used for 4 hours on a full charge, but our hearing aids need to be used all day long when charged once." BerndWagner said what WS Audiology is doing is increasing investment to reduce chip size and extend battery life and timeliness. Today, WS Audiology has 1,000 experts in R&D centers around the world, each of whom has ten years of industry experience and has a position that is difficult to replace in the industry.
This technological advantage gives WS Audiology a leading edge in the competition and is expected to have a solid position in the Chinese market in the next five years. Bernd Wagner also boldly gave his own prediction, "It is expected that in the future, for consumers with limited budgets, competition will become very fierce, because many Chinese hearing aid manufacturers will launch alternative products", and for high-end products, local brands have less competition, because the barriers to entry in high-end fields are relatively high.
In terms of products, WS Audiology (including Siemens Hearing Aid Business, Xiwantuo and Weiting) has been manufactured in China for 25 years, and its manufacturing center in Suzhou not only produces products sold to China, but also exports to different markets such as the United States, Australia, and South Africa. In this regard, WS Audiology is basically a local Manufacturer in China.
Xiwantuo Suzhou plant R&D center
With the increase of China's aging population, the growing middle class and the increase in people's awareness of hearing aids, the Chinese market is growing at many levels, providing ample space for national brand hearing aid manufacturers. In the future, Bernd Wagner will lead the Chinese team to do innovative marketing models in addition to digital technology.
Because everyone's hearing impairment and symptoms are different, it is difficult to find the most suitable hearing aid. Innovative models such as, "If the wearer feels uncomfortable with the sound of the TV, they can contact our professionals on WeChat to establish an online real-time connection and make adjustments to the hearing aid." "The application of such new digital technologies in terms of services can greatly improve the customer experience."