Recently, global orthopedic giant Xerox announced that Mr. Hu Hai, Managing Director of Xerox Greater China, has decided to leave Xerox on September 26th to seek external development opportunities.

At present, Hu Hai has not announced where his next destination will be, and Shi Lehui has not yet announced a new successor.

Retired veteran resigns

In September 2021, Xerox announced the departure of its Managing Director for Greater China, Alaeddin Ahram, and the new Managing Director for Greater China, Hu Hai, took office on September 27th.

Hu Hai is a veteran in the field of medical devices, with over 30 years of experience in the field, especially in orthopedics. Prior to joining Xerox, he had extensive work experience in several giant companies, including serving as Vice President of the Joint Division in China at Johnson&Johnson Medical, Vice President of Depuy Synthes in China at Johnson&Johnson Orthopedics, the first CEO and board member of TCL Medical Group in China, Senior Sales and Marketing Director at Boston Scientific, and multiple management positions at GE Healthcare. This personnel change is not only a change in the CEO of Xerox Greater China from Jordanian to Chinese, but also an important measure for Xerox to promote the change in China.

Looking at the domestic orthopedic market landscape, Shile Hui, along with the five giants Johnson&Johnson, Medtronic, Stryker, and Jiemai Bangmei, continued to make efforts. According to a report released by the China Academy of Commerce Industry Research, at that time, Shile Hui ranked fifth in the orthopedic consumables market, second only to Johnson&Johnson, Jiemai Bangmei, Stryker, and Medtronic, with a market share of 4.40%. And the market share of domestic orthopedic equipment giant Weigao has reached 4.05%, almost on par with Xerox.

On September 14, 2021, the National High Value Consumables Joint Procurement Office collected the application materials of orthopedic joint enterprises for the first time on site and announced the winning bid information. From artificial joints to spine and then to sports medicine, it has begun to disrupt the billion dollar orthopedic market pattern in China.

Shi Le Hui's Greater China region mainly has four business units - orthopedics, sports medicine, wound management, and otolaryngology. Otolaryngology belongs to a more segmented market, so its business volume is relatively small, belonging to the "small and beautiful" business, while the other three categories are more extensive. Second batch: Artificial joints (average price reduction of 82%); Third batch: spine (average price reduction of 84%); Fourth batch: Sports Medicine (with an average price reduction of 74%).

Due to the overall downward trend in centralized procurement prices, the business scale is inevitably affected, thus the pressure on Xerox Hui has doubled.

And Hu Hai took over at this special moment, during his three years at the helm of Xerox Greater China, which were also the three years of tremendous changes in China's high-value consumables field. Since Hu Hai joined, it has been almost simultaneous with the transformation of Xerox Hui. Hu Hai has only been employed for one month and has already received the task from the headquarters to quickly carry out business and organizational transformation in China to better cope with the rapidly changing market.

However, centralized procurement still has an inevitable impact on Xerox's Greater China region. Before centralized procurement, orthopedics and sports medicine were equally important in its business segments. However, after centralized procurement, due to the overall price decline, orthopedics was greatly affected, and sports medicine became Xerox's largest business department.

The Rise of Sports Medicine

Hu Hai previously mentioned that China is currently the second largest market for Xerox globally, the largest market in a single country, and also the fastest-growing market in the world. China plays a pivotal role in the global market.

In November 2007, Shi Lehui invested in its first factory in China, the Suzhou factory, which mainly produces advanced wound care products; On May 25, 2023, Beijing Yizhuang Factory was established, located in Beijing Yizhuang Economic Development Zone, covering an area of about 10000 square meters, mainly producing orthopedic joint and orthopedic trauma products; In addition, Shi Lehui has established five offices in Shanghai, Beijing, Guangzhou, Chengdu, and Shenyang.

In the first half of 2024, Xerox's global revenue was approximately $2.827 billion, a year-on-year increase of 3.4%. Among them, the revenue in the Chinese market was approximately $112 million, a year-on-year decrease of 8.9%.

From the perspective of business segments, sports medicine and otolaryngology achieved a revenue growth of 7.6%, excluding the Chinese market, with a fundamental growth of 11.0%; The revenue of sports medicine joint repair business increased by 6.0%, excluding the Chinese market, with a fundamental growth of 11.8%. Especially, the knee joint repair product portfolio achieved good growth, and REGENETEN bio induced implants achieved strong double-digit growth.

It is worth noting that although various data indicate that sports medicine has become Xerox's largest business unit, in the field of sports medicine, with the full implementation of centralized procurement (VBP) in May 2024, as of the end of the quarter, 29 out of 31 provinces have already begun to implement it. Therefore, it is expected that the challenge of volume based procurement will continue to exist in the second half of this year. It is worth looking forward to whether Xerox can easily solve the problem.

Source: https://news.yaozh.com/archive/44196.html