Ten-billion-level third-party disinfection supply service market out of the leader, lao Ken medical on what basis?

In the medical and health industry, the third-party disinfection supply service track is undoubtedly one of the hot segments in recent years. Why? This can be seen from the evolution of the market's demand.

As we all know, as the core department of the hospital logistics system to ensure the efficient operation of hospital medical services, the main function of the disinfection supply center is to clean, disinfect and sterilize all kinds of reusable diagnostic and therapeutic instruments, surgical instruments, surgical dressings and other items. In the past, hospitals mainly built their own disinfection supply centers to obtain sterile surgical instruments.

In recent years, with the continuous expansion of hospitals around the world, the number of beds and day surgery tables has increased, and the equipment supply capacity of the hospital's self-built disinfection supply center has become more and more difficult to meet the normal diagnosis and treatment activities. As a result, more and more hospitals and treatment institutions began to seek outsourcing services provided by third-party professional disinfection supply agencies, making the entire track rise rapidly.

Data can support the popularity of the industry. According to data released by the National Health Commission, as of the end of March 2021, the number of medical and health institutions nationwide reached 1.026 million. Compared with the end of March 2020, the number of medical and health institutions nationwide increased by 17,273, of which 1,170 hospitals and 17,572 primary medical and health institutions increased. These rapidly increasing medical institutions have undoubtedly pushed up the demand for disinfection supply services. According to data released by Frost & Sullivan, the market size of China's third-party sterilization supply center has grown at an average annual compound growth rate of 70.2% in the past six years.

In this context, many innovative enterprises have poured in and run out of a super leader- Lao Ken Medical, which was founded in 1998 and is the earliest professional equipment research and development manufacturer in mainland China to enter the field of hospital infection control. In the subsequent development process, Lao Ken Medical developed a number of first disinfection and sterilization related equipment in mainland China, and took the lead in entering the field of domestic third-party disinfection services. Up to now, Laoken Medical has set up a number of independent third-party medical disinfection supply centers in Sichuan, Hubei, Guangdong, Guangxi, Fujian, Anhui, Chongqing and Zhejiang, and has been unanimously praised by the industry.

What are the opportunities and difficulties in the third-party disinfection supply service market? Why can Lao Ken Medical become an industry leader? What is the underlying logic of the business model? These issues are analyzed next in this article.

Layout of the third-party disinfection service track, the old Ken medical break and stand

In the growth process of Lao Ken Medical, there are roughly three important stages of development.

First, from 1998 to 2009, Lao Ken Medical started by constantly developing advantageous disinfection products through self-innovation, and established a national network; second, from 2009 to 2016, through sound product lines and channel reforms, it gradually occupied the minds of customers; third, from 2016 to the present, in the continuous advancement of business, Lao Ken Medical ran through the third-party service model.

Up to now, Lao Ken Medical has two main businesses of disinfection equipment sales and third-party disinfection services, and is currently the only enterprise in mainland China that can provide both types of business at the same time, and is in a leading position in the industry.

An industry background that has to be mentioned here is that when Lao Ken Medical was first founded, the hospital infection control market in mainland China was mainly controlled by foreign giants, such as Johnson & Johnson in the United States has an absolute say in low-temperature sterilization products, and Companies such as Beliman, Swiss Jieding, and STERIS occupy a dominant position in high-temperature sterilization products. It is precisely because the Chinese national medical enterprises represented by Lao Ken Medical continue to innovate and grow, and this market pattern has gradually been broken.

In this process, what did Old Ken Medical do right? First of all, in the development of more than 20 years, Lao ken Medical has been focusing on technology and product innovation. For example, the first ozone disinfection machine in mainland China, the first dynamic air disinfection machine in mainland China, the first low-temperature plasma sterilizer with independent intellectual property rights in mainland China and the first laminar flow machine in mainland China to replace laminar flow engineering have been independently developed. The advent of these innovative products has brought new increments to the track of infection control in hospitals on the mainland. Not only that, Lao Ken Medical is also the first medical sterilization and sterilization enterprise in China to obtain THE EU CE certification and the Australian TGA certification.

However, with the rapid development of the industry, the growth of the medical air purifier and medical instrument disinfection equipment market in the mainland has gradually touched the ceiling, and the sales of medical equipment and equipment have begun to slow down. At this time, Lao Ken Medical is still exploring the boundaries of growth and gradually penetrating into the third-party disinfection service market.

A landmark event is that in 2013, Lao Ken Medical co-funded with the world's largest medical device disinfection service provider, the British Xinheli Group, to build the first international standard disinfection center in the west in Chengdu, officially transforming from a medical equipment hardware manufacturer to a third-party disinfection service provider, taking the lead in achieving a layout in China.

After years of cooperation, Laoken Medical has digested, absorbed and reconstructed the most advanced disinfection supply management system in Europe, created a third-party medical disinfection supply service operation management system with completely independent intellectual property rights, and integrated equipment research and development and operation and maintenance support capabilities through this system.

In 2016, the third-party disinfection service market came to the forefront. At that time, major domestic medical institutions began to formally implement WS310-2016 disinfection supply industry two regulations and one standard, the new hospital infection prevention and control standards put forward higher requirements for the management, operation and daily monitoring standards of disinfection supply centers, forcing medical institutions to reform the disinfection supply system. The old Ken Medical Treatment, which was laid out in advance, undoubtedly seized the opportunity.

It is worth mentioning that in the critical initial stage of the industry, Lao Ken Medical is also actively promoting the standardized development of the industry. On June 11, 2018, the National Health Commission officially issued a document to incorporate the independent third-party medical disinfection supply center into the management of medical institutions, and Lao Ken participated in the formulation of relevant standards. Among them, the Laoken Chengdu project has also become the first third-party disinfection supply center in Sichuan Province to be awarded a medical institution practice license.

In the process of continuous development, Lao ken medical has become a leading brand of private disinfection and sterilization in mainland China, and has been continuously recognized by the market and industry. For example, from 2014 to 2019, the market share of Laoken medical air disinfection products exceeded 50%, and it was selected as the first place in the market share and after-sales service satisfaction of medical institutions by third-party institutions such as "China Medical Equipment" for 6 consecutive years. For example, this year, Lao Ken Medical successfully listed the list of new economy demonstration enterprises in Sichuan Province in 2021.

Ten-billion-level third-party disinfection supply service market, is there still a chance in the future?

In the face of the future, how much room for development does Lao Ken Medical, which has become the head of the industry, have? How are barriers to competition built?

This needs to be seen from three dimensions. First, are the pain points of the market still there? Due to the uneven professional and technical level of domestic hospital disinfection supply centers, some institutions still have problems such as limited sites, insufficient construction funds, and lack of professional personnel. In addition, the disinfection supply department is a simple input department, no business income, and is the expenditure department of the hospital.

Therefore, third-party disinfection centers that can alleviate the shortage of medical land and financial difficulties in small and medium-sized hospitals will naturally continue to be favored by hospitals. Relevant data show that compared with the hospital's own disinfection, disinfection outsourcing can save 30% of the cost. It is worth mentioning that in the past development, Lao Ken Medical is based on small customers and has a very rich experience and resource network, so it can steadily advance its business.

Second, how high is the ceiling of the market? How fast is the market growing? According to Sullivan's research, the scale of the mainland third-party disinfection supply market has reached 12.05 billion yuan in 2017, and it is expected to reach 76 billion yuan by 2022, providing more than 70% of the demand for disinfection of medical equipment. It should be noted that in the fast-growing market, private enterprises currently occupy less than 1% of the share, and the growth potential is huge.

The third is whether the business model of the enterprise is digging deep into the moat. With more than 20 years of precipitation, Laoken Medical's rich customer resources and channel network can help it rely on existing resources to promote cross-sales of "product + service" and achieve synergy effects. Not only that, through cooperation with Xinheli, Laoken Medical will combine the advanced foreign third-party disinfection supply service model with the Chinese market situation and continuously improve it, and finally innovatively develop a leading domestic third-party disinfection supply operation management system with great promotion value. The opening of the closed loop of the model can bring long-term business development capabilities to Lao Ken Medical.

In addition to the continuous expansion of the industry and the closed-loop running of Lao Ken Medical's own model, the support of policies has made the entire track quite imaginative. In June 2018, the National Health Commission issued the "Basic Standards for Medical Disinfection Supply Centers (Trial)" and the "Management Specifications for Medical Disinfection Supply Centers (Trial)", requiring disinfection supply centers to set up hard instrument cleaning and disinfection areas, soft instrument cleaning and disinfection areas, and soft endoscopic cleaning and disinfection areas, and made strict regulations on the area. Affected by this factor, more and more hospitals have begun to purchase third-party disinfection supply services.

However, it is not easy to gain a foothold in the third-party sterilization supply service market, because the complexity of the medical industry determines that entrants face high technical challenges and industry understanding costs.

In this process, Lao Ken Medical is relying on a total solution with collaborative advantages to accelerate the construction of the moat, and is expected to become a giant enterprise in the industry, thus bringing more possible explorations to the entire industry.