A new chapter in wound care: the strategic alliance between 175-year-old Mölnlycke and 30-year-old Zhende Medical

Recently, in the Chinese wound care market, which has an annual compound growth rate of 4.5%, Mölnlycke, the Swedish medical giant with a 175-year history, officially signed a joint venture agreement with Zhende Medical, a company listed on China's A-share market. This strategic cooperation, described by senior executives of both parties as "a 20-year romance," is not merely a simple capital alliance but a profound complementarity based on products, channels, culture, and capabilities. Jakob Sonnenberg, General Manager of Mölnlycke Greater China, frankly stated after the signing that the collaboration between the two companies has achieved a "1+1>2" effect.

From a global perspective, Mölnlycke firmly ranks among the top tier of wound dressing companies. Its Safetac® technology is hailed as the industry "gold standard," minimizing secondary trauma during dressing changes. Zhende Medical, with over 30 years of manufacturing experience, operates ten production bases worldwide, and its products are distributed across more than 70 countries. It holds the leading market share in several niche markets in China, including surgical infection control. Xu Dasheng, Executive President of Zhende Medical, emphasized that the two companies exhibit excellent customer synergy, product synergy, and channel synergy.

China's wound care market is rapidly transitioning from traditional gauze to advanced functional dressings. Chronic wounds such as diabetic foot ulcers and pressure sores are on the rise due to an aging population, driving a surge in both hospital and home care needs, with advanced dressings increasingly entering ordinary households. According to data cited by Mölnlycke, China's advanced wound care market is growing at an annual rate of 6%-8%, far surpassing the 2%-3% growth in Europe and the United States. The joint venture will exclusively integrate the advanced wound care businesses of both parties in China, targeting this structural blue ocean. Jakob likened it to: "We have given birth to a mixed-race daughter, combining Western technological depth with Eastern speed and flexibility."

This collaboration provides a new model for synergistic innovation between foreign and local enterprises. Unlike the traditional simple division of labor where "foreign companies provide technology and local companies handle manufacturing," the joint venture may potentially engage in co-research and development in the future, creating localized products tailored to the needs of Chinese patients and exploring convenient designs for home care. As globally leading technologies deeply integrate with local supply chains and distribution networks, a "Chinese solution" for wound care is rapidly taking shape.

Many people believe that covering a wound with gauze will allow it to heal naturally, but this is not the case. Jakob revealed a neglected truth: when traditional dressings are removed, they can tear away newly formed granulation tissue, causing secondary trauma and setting healing back "12 hours." This pain prolongs the treatment cycle, making each dressing change for chronic wound patients feel like "torture." Some even avoid going out due to the odor from wound exudate, with the psychological burden far outweighing the physical pain. This is the fundamental driving force behind wound care shifting from "passive protection" to "active healing."

The core of modern advanced dressings lies in the functional breakthroughs enabled by their multi-layer composite structure. Taking Mölnlycke's Mepilex® series as an example, the first layer uses Safetac® silicone gel technology, providing gentle adhesion without sticking to the wound; the middle layer has strong exudate absorption and moisture-locking capabilities, maintaining an optimal moist environment for the wound; the outer layer blocks bacteria and contaminants, with some products incorporating silver ions for antibacterial functionality. This "three-in-one" design allows the dressing to be used continuously for several days without replacement, significantly reducing the frequency of care and overall costs.

Xu Dasheng, Executive President of Zhende Medical, added that the new advanced dressings not only avoid secondary trauma but also offer healing speed and treatment effectiveness that traditional gauze cannot match. Particularly in managing hard-to-heal wounds such as diabetic foot ulcers, they are almost revolutionary.

According to data cited by both parties, China's advanced wound care market is growing at an annual rate of 6%-8%, far surpassing the 2%-3% growth in Europe and the United States. Within this, the market size for advanced wound dressings is approximately 3 billion RMB. Behind this high growth are multiple contributing factors: the world's largest population of diabetes patients has driven up the incidence of diabetic foot ulcers; an aging population has exacerbated pressure ulcer issues; and demand from surgeries and cosmetic procedures has fueled a surge in scar management. At the same time, expanded medical insurance coverage for advanced dressings, along with the establishment of specialized wound care clinics and home care systems, has opened up market opportunities for advanced products.

Xu Dasheng revealed that new types of dressings are mostly managed as Class III medical devices, which can be charged separately and included in medical insurance, while traditional dressings are only counted as part of the hospital's costs. With the deepening of DRG/DIP payment system reforms, hospitals' sensitivity to the cost-effectiveness ratio has increased, and the full-course cost advantage of modern dressings will translate into procurement competitiveness. Jakob emphasized that although modern dressings have a higher unit price, their replacement frequency is lower, healing speed is faster, and hospital stays are shorter, resulting in a lower full-course cost.

Traditional dressing procurement is a simple consumable transaction, while modern wound management involves multi-dimensional values such as efficacy, experience, cost, and efficiency. The "total cost" concept repeatedly emphasized by Jakob is at the core of this transition: modern dressings optimize the full-course cost by reducing the frequency of dressing changes, shortening hospital stays, and minimizing secondary trauma. As medical insurance payments shift from fee-for-service to value-based care, this cost-effectiveness logic will gain greater influence, reshaping the industry's valuation system.

At the same time, both parties are optimistic about the potential of the home care market. E-commerce platforms such as JD.com have launched home care channels, with some services enjoying a 90% medical insurance reimbursement rate. However, Jakob emphasized that the in-hospital market remains the foundation, as the full-course cost advantage of modern dressings is most easily demonstrated in hospital settings. Xu Dasheng believes that after adequate in-hospital education, changes in patients' mindsets will naturally drive demand for home care. "The two markets will grow in tandem," forming a mutually reinforcing growth pattern between in-hospital and out-of-hospital care.

However, it is worth noting that despite the strong demand, market education is seriously lagging behind. Jakob revealed that in Europe, wound care courses for medical staff usually last only one to two weeks, and the situation in China is similar. Many nurses in non-Class A tertiary hospitals are not even aware of the existence of modern dressings. To address this, the country has established a specialized wound care nurse training system, cultivating professional talents annually through more than ten training schools, but coverage is still far from sufficient. After Mölnlycke and Zhende Medical formed their joint venture, they will focus on online and in-hospital education, leveraging Mölnlycke's global experience and Zhende's local network to promote knowledge dissemination.

China's advanced wound care market is currently in a "triple window period" of surging demand, growing awareness, and policy support. Whoever can be the first to establish a closed loop in education, products, and channels will dominate the market. The joint venture between Mölnlycke and Zhende Medical is a strategic move born precisely within this context.

Jakob frankly admitted that the two companies have been "in love" for more than 20 years, with in-depth exchanges between senior management every year and a high degree of cultural and conceptual compatibility. In the global wound care market, Mölnlycke has a history of 175 years. With its unique Safetac® technology and advanced brand influence, it firmly ranks among the top tier in the industry. Meanwhile, Zhende Medical has deeply cultivated Chinese manufacturing and distribution channels for over 30 years, ranking among the top three domestic medical dressings exporters in 2023.

Mölnlycke has been in the Chinese market for over 20 years, and the establishment of the controlling joint venture, Mölnlycke Zhende, marks another significant step in its deep cultivation of China. This cooperation is not a capital-driven acquisition but a joint venture based on long-term trust and strategic complementarity between the two parties. The high level of complementarity in products, technology, channels, and culture has become the core driving force behind this joint venture.

Mölnlycke Zhende will operate as an independent entity, controlled by Mölnlycke, with its headquarters in Shanghai. It is scheduled to commence operations in the third quarter of this year. Initially, the focus will be on marketing advanced wound care products from both Mölnlycke and Zhende Medical. As the business grows, there are plans to expand the collaboration to include joint product development.

Mölnlycke Zhende will integrate the commercial networks of both parties, covering nearly 10,000 hospitals, 200,000 pharmacies, and e-commerce channels across China.

The complementarity between the two parties at the product level is particularly evident. Mölnlycke focuses on advanced scar patches like Mepiform® and chronic wound dressings, while Zhende Medical's advanced wound care products include innovative solutions applied in the treatment of burns, vitiligo, and more. Together, they form a highly complementary partnership across scenarios ranging from acute to chronic care and from in-hospital to out-of-hospital settings.

Xu Dasheng emphasized that Mölnlycke Zhende will first integrate the product lines of both parties, and then gradually expand to joint development in the future, truly achieving a "combination punch" style of market coverage.

Jakob revealed that in the future, products will be developed to better suit the Chinese market, such as user-friendly designs for home care scenarios, enabling non-professionals to operate professional-grade dressings.

However, Jakob did not shy away from acknowledging the stylistic differences between the two parties: Mölnlycke emphasizes historical accumulation and ultimate quality, while Zhende Medical reflects the execution efficiency of Chinese enterprises. Within the framework of the joint venture, the former provides clinical insights, technological reserves, and a research and development network, while the latter contributes supply chain capabilities, responsiveness to the local market, and channel execution. Xu Dasheng summarized this complementarity as "1+1>2" — not a simple scale addition, but a chemical reaction of capabilities.

A review of the joint venture history of China's medical device industry reveals that it has roughly undergone three stages of evolution. From the 1980s to the 1990s, the first wave of joint ventures was characterized by "market for technology," with foreign companies providing equipment and brands while local enterprises handled assembly and regional sales; core research and development and key technologies remained firmly in the hands of foreign parties.

From 2000 to around 2020, the second wave of joint ventures leaned more towards "channel alliances," with foreign brands leveraging the sales networks of local companies to quickly expand their market presence. However, products were still predominantly imported or in completely knocked down (CKD) form. The common characteristic of these two types of models is that cooperation remained in the mid-to-lower end of the value chain, making it difficult for local enterprises to truly master core technologies and for foreign entities to deeply understand the Chinese market.

In recent years, with the significant improvement in manufacturing capabilities, research and development levels, and capital strength of local enterprises, the third wave of joint venture models is emerging. Its core characteristics are "technology localization plus joint research and development plus whole industry chain integration." The two parties are no longer just in a buyer-seller relationship or a simple agency relationship but are injecting their core businesses into the joint venture platform, sharing risks and benefits.

The cooperation between Mölnlycke and Zhende Medical is a typical example of this new model. It is not a superficial partnership where "foreign capital provides technology and local partners provide channels," but rather a comprehensive and in-depth binding that covers research and development, marketing, and education. This marks a new phase of "symbiotic and win-win" cooperation between Chinese and foreign medical industries.

The "hybrid" model of Mölnlycke and Zhende Medical offers a middle path: foreign capital does not seek full ownership, local partners do not abandon brand equity, and both parties establish a "positive-sum symbiosis" relationship based on complementarity. If this paradigm is validated, it will profoundly influence the industrial organization form of China's medical device industry, shifting from zero-sum competition to value co-creation, and from substitution logic to synergy logic.

The joint venture model between Mölnlycke and Zhende Medical is about growing the pie together, a "two-way commitment," which may prove that in the long-undervalued field of wound care, speed and quality can coexist, and competition and cooperation can thrive together. This could accelerate the wound care market towards the maturity and prosperity it deserves — a new ecosystem centered on patient value, driven by clinical innovation, and supported by industrial collaboration, is quietly taking shape.