Endoscopy Sector Defies Market Downturn in 2023, Emerging as a Rare Bright Spot with Strong Growth from Domestic Players

In 2023, many segments of the healthcare industry were experiencing a downturn, yet certain sectors, such as endoscopy, saw accelerated growth. According to the semi-annual reports released by relevant listed companies, the endoscopy businesses of SonoScape, AOHUA Endoscopy Partner, and NovelBeam achieved year-on-year growth rates of 38%, 73%, and 46%, respectively, in the first half of the year.

In contrast to other market segments that have been in continuous decline, the counter-trend growth of the endoscopy industry has made companies such as SonoScape, AOHUA Endoscopy Partner, and NovelBeam among the few winners this year.

Not only listed companies, but also innovative enterprises in the endoscopy field have achieved rapid growth. Among them, innovative products such as fluorescence endoscopes, 4K endoscopes, 3D endoscopes, endoscopic ultrasound (EUS) systems, and single-use endoscopes have all commenced commercialization and are experiencing accelerated volume growth this year. The commercialization of these innovative endoscopic products has further driven the expansion of the endoscopy market. What are the reasons behind the endoscopy market’s resilience amid broader headwinds? With multiple innovative endoscopes accelerating their commercial rollout and traditional endoscopes facing challenges, where will the next growth drivers for the endoscopy industry emerge?

For a long period, the high-end endoscopy market in China was dominated by overseas giants such as Olympus and Pentax, with domestic companies only able to provide mid- to low-end products.

According to statistics from the Zhongcheng Medical Device Big Data Platform, there were approximately 2,091 endoscope bid-winning records in China during the first half of 2021. Among these, Olympus secured 863 bids, accounting for a market share of 46.3% and ranking first; Karl Storz ranked second with a market share of approximately 15.1%; and Fujifilm ranked third with a market share of approximately 13.3%.

As can be seen, domestic manufacturers were still primarily in a catch-up position in 2021.But now,Domestic endoscopes have alreadyStartCounterattack。

Flexible Endoscopy Sector, while Olympus, Fujifilm, and Pentax monopolized the top three market shares in the first half of 2021, Chinese manufacturers finally broke into the forefront of the flexible endoscopy market ranking in the first half of 2023. Data compiled by Zhongcheng Medical Devices shows that in the bidding rankings for flexible endoscopes in Chinese public hospitals during the first half of 2023, AOHUA Endoscopy Partner and SonoScape ranked third and fourth, respectively, breaking the previous market pattern where foreign brands swept the top four positions.

This is because domestic companies have broken into the high-end segment of flexible endoscope products and made progress in commercialization.

Currently，in the field of flexible endoscopyHigh-End ProductsInResolutionTopHas reached 4K levelCompared with 1080p resolution endoscopic systems, 4K endoscopy provides a clearer surgical field and image quality, while its wider color gamut accurately reproduces the true colors of lesions and organs, thereby reducing visual errors.

In this high-end market, AOHUA Endoscopy Partner launched the AQ-300 4K ultra-high-definition gastrointestinal endoscope in November 2022, propelling China’s flexible endoscope market into the 4K era; whereas Olympus held its domestic launch event for its high-end EVIS X1 endoscopy system in November 2023.

Not only does AOHUA Endoscopy Partner benefit from first-mover advantage, but its service and reputation in the high-end market have also gained recognition. Following the launch of the AQ-300, AOHUA Endoscopy Partner has continuously iterated and upgraded the system based on clinical feedback. The company’s efforts have been rewarded: revenue in the first half of the year increased by 72.7% year-on-year to RMB 289 million, while net profit attributable to shareholders after deducting non-recurring gains and losses surged by 2,033% year-on-year.

Driven by an increasingly diversified product portfolio and ongoing academic promotion, AOHUA Endoscopy Partner maintained a high growth rate in the third quarter. In Q3 2023, the company recorded revenue of RMB 140 million, a year-on-year increase of 23%, and net profit attributable to shareholders of RMB 7 million, a year-on-year surge of 102%.

Another major domestic player in the flexible endoscopy sector is SonoScape, which has launched a range of high-end endoscopes, including bronchoscopes, optical magnification endoscopes, scopes with adjustable stiffness, echoendoscopes, and duodenoscopes. Leveraging these premium products, SonoScape’s endoscopes have gained access to more hospital departments and higher-tier hospitals, covering a broader spectrum of clinical applications and surgical procedures. Consequently,SonoScape'sRevenue from minimally invasive surgical business has doubled for two consecutive years.。

It is expected that with the accelerated market launch of high-end flexible endoscopy products from domestic brands such as AOHUA Endoscopy Partner and SonoScape, China's flexible endoscope market will rapidly enter the 4K era.

Rigid Endoscopy Field,Karl Storz, Olympus, and Stryker dominated the domestic rigid endoscope market in the first half of 2021, with market shares of 44.2%, 16.4%, and 4.4%, respectively. However, by 2022, Mindray took the lead in challenging this landscape, displacing Stryker to become the third-largest player in the domestic rigid endoscope market. Meanwhile, OptoMedic rapidly captured market share through its fluorescence endoscopy solutions.

According to the “2021 Endoscopy Innovation Trends Report,” in 2019, OptoMedix and Stryker dominated the domestic market for fluorescence endoscopy, with comparable market shares. From 2021 to 2022, OptoMedix ranked first in market share within this domestic niche segment for two consecutive years and expanded its product presence to international markets, including Germany, Italy, and Belgium.

Domestic companies have been able to rapidly increase the localization rate in the rigid endoscopy sector because Chinese brands have also launched high-end rigid endoscopes and gained market recognition.

In the rigid endoscope market,LatestHigh-end products integrate three major imaging technologies: 4K, 3D, and fluorescence.Endoscopy SystemIn August 2023, Karl Storz, a globally renowned endoscopy company, announced that its pioneering IMAGE1 S Rubina, the world’s first all-in-one 4K, 3D, and fluorescence endoscopy system, had received approval from the National Medical Products Administration (NMPA). This system integrates 4K, 3D, and fluorescence imaging technologies, enabling 3D visualization with 4K resolution as well as white-light and fluorescence imaging through a single console and one electronic endoscope.

In fact, the application of 4K technology in the field of endoscopy in China has become relatively common. By searching with the keyword “4K” on the data query page of the official website of the National Medical Products Administration (NMPA), we found that 113 models of 4K endoscopes have been approved for market launch, the vast majority of which are rigid endoscope products.

Meanwhile, multiple 4K endoscopes, 3D endoscopes, and fluorescence endoscopes have received regulatory approval in China. In the 3D endoscope market, domestic company Bosheng Medical successfully entered the top rankings for tender bids in the first half of 2023. According to tender data for 3D endoscopes in the first half of 2023, Karl Storz, Olympus, Bosheng Medical, and B. Braun ranked as the top four players by market share in China’s 3D endoscope market.

As for high-end endoscopes integrating 4K, 3D, and fluorescence capabilities, domestic companies have also launched such products. For instance, DPM’s globally pioneering Ruiyan series 3D/4K/fluorescence endoscopic camera system was approved for market release in December 2022; Tuge Medical’s 3D/4K/fluorescence endoscope was approved for market release in February 2023; Mindray’s self-developed 4K 3D endoscopic fluorescence camera system received NMPA approval in July 2023; OptoMedic’s 4K 3D endoscopic fluorescence camera system was approved for market release in August 2023; and Bosheng Medical unveiled its new X1 platform 3D/4K/fluorescence endoscopic camera system at the CMEF held in late October 2023.

Compared with traditional rigid endoscopes, the “4K+3D+fluorescence” endoscope integrates three functions—ultra-high-definition image quality, three-dimensional stereoscopic imaging, and fluorescence navigation—into a single device. This represents the development direction for rigid endoscopy; global endoscopy companies are accelerating their progress in this direction, while Chinese enterprises have now broken through technological barriers and taken a leading position in the global endoscopy industry.

Single-Use Endoscopy Sector, the industry is still in its market development phase. However, domestic companies have already made early strategic moves and are accelerating their market promotion efforts. In 2022,Over 40 Disposable Endoscopes Approved in China, primarily applied in urology and expanding into departments such as pulmonology, gastroenterology, and gynecology.

More importantly, overseas giants do not hold a significant advantage in the single-use endoscope market; instead, Chinese companies are launching a counteroffensive into the global market. For instance, Ruipai Medical has exported its single-use endoscope products to more than 20 countries and regions across Europe, the Middle East, North America, South America, and Southeast Asia. Meanwhile, Huaxin Medical has seen explosive growth in overseas orders for its single-use bronchoscopes.

Other High-End Endoscopes, domestic companies such as SonoScape have broken the technological monopoly by launchingEndoscopic Ultrasound, making China the second country in the world to manufacture endoscopic ultrasound systems; Jingwei Shida has established the world’s largest large-scale manufacturing center for confocal laser endomicroscopes, launching multiple products that are first-of-their-kind in China, the only domestically produced ones, and globally leading.Confocal Laser EndomicroscopyProduct...

Overall, domestic enterprises have broken through technological blockades and innovatively developed high-end endoscope products. In the market, domestically produced high-end endoscopes have gained recognition, with the localization rate continuing to rise.

Commercial success requires not only high-quality products but also effective marketing and promotion, and the endoscopy field is no exception.

Although domestic companies have launched high-end endoscope products, how to enter the market and gain market recognition still requires relevant enterprises to provide their own solutions. Through systematic analysis, we have found that Chinese endoscope manufacturers mainly succeed in penetrating the market through three approaches.

First, leverage a mature marketing network to iterate products in a timely manner based on clinical needs, thereby meeting physicians’ expectations.For example, after more than two decades of development, AOHUA Endoscopy Partner has established multiple marketing support centers both domestically and internationally. By continuously iterating its 4K ultra-high-definition gastrointestinal endoscope, the AQ-300, based on clinical feedback, the company has exceeded clinicians’ expectations in terms of maneuverability, handling feel, and stability. This has ultimately earned the AQ-300 a strong reputation, driving sales through positive word-of-mouth.

For another example, Nanwei Medical, through the implementation ofProduct Experiential Marketingand offline academic activities, thereby accelerating product adoption in hospitals, equipment installation, and volume growth. Currently, Nanwei Medical’s disposable bronchoscope is gaining prominence, and its disposable surgical cholangioscope has achieved mass production and shipment; both are poised to become new growth drivers for Nanwei Medical’s performance this year.

Unlike AOHUA Endoscopy Partner and Nanwei Medical, SonoScape not only boasts a mature marketing network but also possesses a diverse product portfolio. This enables SonoScape to achieve robust growth across tertiary, secondary, and primary hospitals by offering endoscopic products that cover the high-, mid-, and low-end market segments. In the first quarter of 2023, SonoScape’s installed base in county-level and primary hospitals increased by 200% and 300% year-on-year, respectively, while its installed base in tertiary hospitals grew by 150% year-on-year.

Second, collaborate with industry giants to rapidly penetrate the market by leveraging their sales networks and brand influence.For example, in March 2023, New Optical Dimension Medical signed a commercial cooperation agreement with Boston Scientific. The two parties plan to establish a long-term partnership for the commercial promotion and market sales of single-use electronic cholangioscopes in mainland China. Through this collaboration with Boston Scientific, New Optical Dimension Medical’s products will gain greater recognition among physicians, thereby accelerating product sales. Previously, New Optical Dimension Medical had also entered into a strategic partnership with Fujifilm. As the exclusive distributor, Fujifilm is responsible for the sales and business development of New Optical Dimension Medical’s single-use electronic bronchoscopes in several major European countries.

Not only NovelBeam Medical, but Huaxin Medical also entered into a strategic partnership with Yisi Medical in August 2023. The two parties plan to engage in long-term strategic cooperation on global product research and development, commercial promotion, and marketing of single-use endoscope products. Leveraging Yisi Medical’s mature global marketing network will accelerate the global market coverage of Huaxin Medical’s single-use endoscope products.

Additionally, Huaxin Medical has previously collaborated with Olympus, with Olympus acting as the sales agent for Huaxin Medical’s single-use endoscope products in the United States. Since the market launch of Huaxin Medical’s single-use bronchoscope, it has entered dozens of countries across Europe, the United States, and Japan, securing explosive order growth. In September 2023, Olympus announced that its single-use nasopharyngolaryngoscope, the Vathin E-StereScope, received FDA approval. Reportedly, this product was also developed and manufactured by the Chinese company Huaxin Medical and is exclusively distributed by Olympus.

Akuyu Medical represents the latest case, having reached an exclusive distribution and co-development agreement with Hologic’s headquarters in October 2023. Under this agreement, Hologic will serve as the exclusive distributor of Akuyu’s single-use hysteroscopy system in the United States, promoting its adoption in conjunction with Hologic’s existing portfolio of minimally invasive surgical instruments. This partnership with Hologic is expected to accelerate the sales of Akuyu’s single-use hysteroscopy system in the U.S. market. Furthermore, Akuyu and Hologic will continue their collaboration to develop additional innovative single-use endoscopic products that meet clinical needs.

Third, through exhibitions and academic promotion, single-use endoscope companies are venturing into the global market on their own.Currently, Ruipai Medical, a leading enterprise in the field of single-use endoscopes, has obtained 16 overseas registration certificates and extended its overseas sales channels to more than 20 countries and regions, including Europe, the Middle East, North America, South America, and Southeast Asia.

Meanwhile, in 2022, Ruipai Medical participated in a series of international exhibitions and academic conferences, including Digestive Disease Week (DDW), the American Urological Association (AUA) Annual Meeting, the European Association of Urology (EAU) Congress, the Arab Urology Annual Meeting & Jordanian Urology Annual Meeting, and the 11th UAE International Urology Conference, to aggressively promote its single-use endoscope products.

Pusheng Medical is also accelerating the global expansion of its disposable endoscopes. In November alone, it participated in multiple events, including the Annual Congress of the Austrian Society of Urology and Andrology, UROVIVO 2023 organized by the Urological Society, the 55th MEDICA (International Hospital and Medical Equipment Exhibition) in Düsseldorf, Germany, and the 117th Annual Congress of the French Association of Urology. Additionally, the company conducted numerous training sessions overseas.

Amid diverse global expansion strategies, China’s single-use endoscopes have achieved remarkable success in international markets. For instance, Huaxin Medical’s single-use bronchoscopes have seen explosive order growth in dozens of countries overseas. In 2022, Ruipai Medical expanded its product coverage to more than 1,000 hospitals, capturing over 50% market share in key regions, and was selected for Guangzhou’s inaugural Top 100 Emerging Enterprises Cultivation Program in 2023.

It is worth noting that, in terms of commercialization, domestic enterprises also enjoy the advantage of operating on their home turf and benefit from policy support. For instance, as policies promoting the substitution of imported products with domestically produced ones continue to deepen, an increasing number of medical institutions are leaning towards procuring domestically manufactured equipment, thereby creating a favorable development environment for Chinese endoscopy companies.

In 2022, supported by various policies such as the issuance of special medical funds by local governments, central government-subsidized loans, the construction of makeshift hospitals, and DRG-based payment reforms, Chinese endoscopy companies accelerated their growth. Among them, SonoScape achieved its highest-ever hospital penetration rate for equipment in the domestic market.

Additionally, in October 2023, SonoScape announced that its ultrasound electronic upper gastrointestinal endoscopy system and endoscopic ultrasound microprobe system were shortlisted in the “Selection Results for the Ninth Batch of Excellent Domestically Produced Medical Equipment Products.”

It is reported that the selection of outstanding domestically produced medical equipment, commissioned by the Department of Planning and Information of the National Health Commission and organized by the China Association of Medical Equipment, aims to identify high-quality domestic medical devices that meet clinical needs, exhibit superior product quality, and possess strong market competitiveness and development potential. This inclusion will accelerate the market penetration of SonoScape’s two endoscopic ultrasound products.

Also in October, Bosheng Medical announced that its endoscopic image processors, the PX-850E and PX-850E-III, were included in the “Shenzhen Innovative Product Promotion and Application Catalog (First Batch of 2023),” becoming products prioritized for procurement and recommendation by government agencies. This will accelerate the volume growth of Bosheng Medical’s products.

Overall, China’s endoscopes have broken into the high-end segment and gained market validation and recognition. Among various high-end innovative endoscopes, fluorescence endoscopes and single-use endoscopes are currently more favored by the market, achieving higher sales volumes than other products.