Until a few
years ago, foreign trade regulation in China made it nearly impossible
for foreign companies to participate in domestic trading operations.
Foreign companies were, and to a large degree still are, prohibited
from importing goods themselves and selling them directly to the
Chinese market, and have, by and large, been unable to invest in
foreign trade enterprises. When the regulations began to ease slightly
in the mid-1990s, Chindex seized the opportunity to establish Chindex
Holdings International Trade (Tianjin) Ltd. (Chindex Tianjin), a
wholly foreign-owned enterprise (WFOE) chartered in the Tianjin
Free Trade Zone with dedicated bonded and Customs-cleared warehouses.
enabled Chindex to import certain types of foreign products denominated
in U.S. dollars or other foreign currencies and to sell these products
for RMB to domestic Chinese customers, giving Chindex complete logistical
control over the distribution process, including importation, Customs
clearance, warehousing, marketing and sales, and physical distribution.
Moreover, Chindex Tianjin also provided the capability to establish
facilities for co-packaging, light processing, and other value-added
In order to
increase the efficiency and effectiveness of the nationwide system,
in mid-1998, Chindex opened a second WFOE distribution center in
Shanghai, Chindex Shanghai International Trading Co., Ltd. (Chindex
Shanghai), which now serves as the main distribution facility for
the Products Distribution network. Additional local storage facilities
were opened in Beijing and Guangzhou in 1999. The Chindex Products
Distribution Department is focused on supply chain management and
sales to dealers and retail organizations, rather than directly
to end users. The products sold through the Products Distribution
Department are low-value, off-the-shelf healthcare instrumentation
and consumable healthcare products, as well as personal care and
home healthcare products sold through retail pharmacies.
sales of the products sold through the Chindex Products Distribution
Department are managed by dedicated product managers for each main
product line coupled with regional sales teams and a route sales
force. The regional sales teams manage a network of over 600 value-added
dealers which carry local stocks and target the 500-or-more-bed
hospitals in the country. Chindex also employs a route sales force
to supply the emerging retail pharmacy market through the Chindex-managed
direct supply pipeline.
Products Distribution Department was developed on the basis of a
core group of experienced managers, with years of success in the
areas of logistics and local area dealer network management, and
hospital and retail sales and marketing. The Department is in turn
supported by the Companys extraordinary wealth of on-the-ground
management expertise. The Products Distribution Department is comprised
of three primary areas of focus: Hospital Dealer Sales, Retail Sales,
and Logistics Services.
Hospital Dealer Sales division, the Chindex Products Distribution
Department taps the substantial and growing market for high quality
imported medical consumables and low-priced instrumentation via
a value-added network of sub-distributors located throughout China.
The network was started in 1995 and has grown to encompass over
600 dealer partners who cover all of Chinas 350 hospitals
with more than 500 beds. These hospitals account for approximately
80% of the demand for imports in China.
Chindex is pleased
to provide marketing, logistical, and distribution services to the
following manufacturers of medical instrumentation and consumables
through its Products Distribution Hospital Dealer Sales division:
Healthcare Products Company, is the second largest healthcare
company in the world. and a leading U.S. manufacturer of healthcare
consumable products. Tyco selected Chindex as its exclusive distributor
throughout China and Hong Kong for its Urology product lines. The
Chindex/Tyco partnership began in 1997.
Corporation is a world leader in the design and development
of cardiovascular products. In 1999, Chindex assumed the exclusive
distributorship for Guidants line of vascular intervention
products, including the family of Coronary Stent Systems.
RCI is a world leader in the development of disposable products
for the respiratory care and anesthesia markets. Since 2000, Chindex
has distributed an increasingly wide range of Hudson RCI products,
including Sheridan catheters, previously manufactured by Tyco/Kendall.
division of Teratech Corporation manufactures an ultra-portable,
microminiaturized PC based ultrasound system. Terason's ultrasound
product was designed to cater to the increasing need for cost containment
in the healthcare industry, by bringing the immediacy of ultrasonic
diagnosis to the patient at first examination without compromising
the diagnostic power of the imaging tool. The partnership between
Chindex and Terason began in 2001.
Truphatek is an Israeli manufacturer of laryngoscopes.
Chindex has been the exclusive distributor for Truphatek in China
since 1993. Since 1997, Chindex’s Products Distribution Department
has assumed responsibility for stocking, marketing, and distributing
these instruments throughout China.
Tuttnauer is the world leader in tabletop autoclave
sterilization systems, which are used in many medical applications
including opthamology, dentistry, and operating rooms. Chindex and
Tuttnauer began their partnership in the China marketplace in 1993
and have attained overwhelming market share in China for imported
autoclaves. In addition, Chindex and Tuttnauer have won Ministry
of Public Health tenders for the last three years in a row to supply
autoclaves to nearly 50 teaching hospitals throughout China.
Chindex is rapidly
establishing a distribution network for branded healthcare and health-related
consumer products to Chinas burgeoning retail pharmacy sector.
Sales began in mid-1998 in Shanghai and plans call for coverage
of all of the major pharmacies in the top 30 urban markets (accounting
for about 80% of demand and purchasing power for imported consumer
goods). Chindexs personalized, high service approach calls
for intensive coverage of all partner outlets by a field force of
customer service representatives. Several new product areas are
under development in parallel with the rapidly growing distribution
paving the way into retail pharmacy distribution through a partnership
with the worlds largest producer of cosmetic products. Under
the partnership agreement, in 1998, Chindex became the exclusive
distributor of a prominent brand of health-oriented cosmetics and
skin care products. Chindexs unique ability to closely control
both the inventory and the distribution channels in China have proven
successful in both the test market and expansion phases of distribution
for this product line. Chindex currently has exclusive distribution
rights to the following premier brands, which reach the market through
its Retail Sales pipeline:
Eve brand of feminine hygiene products, manufactured by C.B.
Fleet Company, Inc.
Laboratoires brand of skin care products, manufactured by the
Cosmetique Active International division of LOreal
In order to
assure effective and efficient product and financial flows management
in the China marketplace, Chindex established its own logistics
capabilities to support hospital and retail products distribution,
as well as other internal customers. Through its two established
distribution centers in Tianjin and Shanghai, in late 1998, Chindex
began offering custom logistics services on a third party basis
to principals who wish to manage their own sales and marketing channels
but need assistance with physical distribution and financial management
of their businesses in China. Chindex offers these services only
to providers of products related to our core healthcare and health-related
(Becton Dickinson) is a leader in the design and worldwide delivery
of indispensible healthcare devices, systems and services. In mid-2000,
BD made the strategic decision to outsource their logistics function
to Chindex, due to Chindex’s wealth of expertise in this area, allowing
BD to focus on manufacturing, marketing, clinical education, and
GmbH is an independent German company with almost 100 years
of history as a nebulizer manufacturer. Pari manufactures these
devices, used for aerosol delivery of drugs, in facilities in Germany
as well as the United States. Chindex is serving as logistics partner
to import both hospital and consumer-oriented base units, accessories,
and spare parts to support Paris network of regional dealers
International, Inc. markets and sells Codonics medical printers
and paper in China. Codonics,
Inc. is the market leader in color imagers and color media with
the largest installed base of color imagers in the world. In early
2000, Chindex assumed the role of logistics provider for Whitney’s
Codonics business throughout China.
with the growth and expansion of the Products Distribution Department
infrastructure, Chindex is investigating new potential product areas
in the healthcare sector, as well as new product lines that complement
the products which are currently imported and distributed by the
Products Distribution Department. Chindex has invested heavily in
its Products Distribution capabilities and, as an integral part
of the Company’s growth plan, Chindex plans to continue to capitalize
on that investment.