Surpassing Expectations

A meeting place for global entrepreneurs

2017

Surpassing Expectations

3o countries all over the world in +800 employees

markets

in more than

million US dollars’

worth of products

every business day 13 clearing

12

+6,5 Million tons of

shipments

+3 Billion USD Turnover

CellMark Medical delivers a broad range of products, services and solutions to the world market. CellMark Medical leverages an expert global trading infrastructure with a network across 120 markets, to simplify the exporting process and minimize associated risks, allowing MedTech manufacturers to have transparent control of their international sales operation. We bring order to less structured markets while mitigating risk.

CellMark Group Facts & Figures

Surpassing Expectations

Change has never occurred

this fast before in China

But it will also never occur this slow again

China Focus – A new day to supply global medical demand

Surpassing Expectations

Source: Goldman Sachs, Morgan Stanley

China Focus – Share of Global GDP

US Share of GDP: 2% 27% 21%

Surpassing Expectations Surpassing Expectations

China Focus – The Power of Urbanization

Surpassing Expectations

Shenzhen 30 years ago… …the economic boomtown today

…China’s financial center today Shanghai Pudong in the early 1980s…

China Focus – The Power of Dramatic Change

Surpassing Expectations

China Focus – Where do you need to be?

Surpassing Expectations

China Focus – The Politics

Be informed of, and respect, the political landscape!

Surpassing Expectations

China Focus – How to Change?

What are the impacts for multinational companies?

Surpassing Expectations

China Focus – 10 Prioritized Industries – Made in China 2025

Creativity, quality, digitization and renewable!

Source: McKinsey

Surpassing Expectations

• A hospital based system with no primary care facilities and people visiting hospitals for

minor ailments

• Two markets remain. The intention of the 5 –year plan is to bridge the gap.

• Better facilities

• Better doctors

• Mostly chronic conditions

• 300 + million people

• 50% with some type of health insurance

• Greater income

• All market research in China done in these hospitals

MODERN URBAN MARKET TRADITIONAL RURAL MARKET

• Poorer facilities

• Less educated doctors

• Mostly infectious diseases and accidents

• 1 billion people

• Few with any type of health insurance

• Mostly local generics and TCMs

• No free healthcare

Level III and II hospitals

Level I hospitals

China Focus – The Healthcare System

Surpassing Expectations

Top

segment

Mid segment

Basic segment

~ 1,200 hospitals

~ 4,000 hospitals

~ 14,000 hospitals

High-level general and Specialty

Mid-level general hospitals

Small hospitals providing basic care

• Larger “profit oriented” hospitals with funds to

purchase advanced medical technologies

• Strong preference for foreign brands

• Multi-nationals have strong presence with

approximately 50% market share

• Still focused on low level of technology, but levels

rapidly raising

• Preference to buy foreign brands, but lacks funds

• Primarily supplied by domestic manufacturers

today

• Provides very basic service

• Minimal number of beds and operations with very

weak demand for advanced equipment

• Limited awareness of foreign brands

China Focus – The Hospital Structure

Surpassing Expectations

China - Yunnan Peoples 1st Hospital

China Focus – Dramatic Ongoing Healthcare Upgrade

Surpassing Expectations

The market transformation is triggered by:

Graph 1: Source derived from data in the World Health Report 2003 and Murray and Lopez. The 2020 projections were estimated by Murray and Lopez. Graph2: United Nations(2001)

Graph 2: Project Growth of Asia’s Elderly Population Graph 1: Global Mortality from Chronic Diseases

China Focus – Market Drivers

• Outbreak and prevalence of chronic diseases globally (graph 1)

• Aging population (graph 2)

• Booming wealth of developing economies

• Relative shortage of medical professionals

• Sub-healthy conditions due to modern life (insufficient physical activity, fast food, pollution, etc.)

• Willingness to spend up to 25% of net income on well being vs. 4% in the West

Surpassing Expectations 15

Quality

Service

Delivery time

Price

Ergonomics

Education

Int. solutions

Innovation

Relationship

Environmental

Brand

Design

- Importance +

Supporting evidence Customer rating of criteria

Quality

”The complexity of research require very reliable equipment

Life Sciences customer, Guangzhou

”The quality of the products is definitely a key purchasing criterion for us Life Sciences customer, Shanghai

Service

”Having high quality and responsive service is crucial for us as all downtime costs money

Life Sciences customer, Tianjin

”Service is very important to us when deciding on a supplier

Life Sciences customer, Beijing

Delivery time

”Delivery time and precision is critical […] One time we chose another supplier as they could deliver faster Life Sciences customer, Suzhou

”We often order equipment before we need it, just to be sure that we have the equipment in time Life Sciences customer, Harbin

Source: Customer interviews; Quartz+Co analysis

China Focus – Business Drivers

Surpassing Expectations

Sales Development Market Development Concept Development

• Leverage existing services • Leverage existing products • Establish a foot print by

• Greenfield • Acquisition • Partnership

• Build distribution channels in targeted markets.

MARKET ESTABLISHMENT

• Enter new geographies • Enter new segments • …with existing

services/products MARKET EXPANSION

• New services • New technologies • New products

NEW OPPORTUNITIES

Horizon I 12 months

3 Years

5-7 Years

Horizon II Horizon

III Time

Necessary Parallel Activities to Achieve Consistent Outcomes

Time To Impact

China Focus – Business Growth Planning

Go To Market Planning

• Appoint Project Leader • Establish Cross Org Task Force • Allocate Pilot Budget • Hire Local BD – Scouting

Activities • Define Pilot

• Who to sell to • What to sell • How to sell

• Define Pilot Required Outcomes “GO” – “NO GO” DECISION

Step 1. Step 2. Step 3. Step 4.

Surpassing Expectations 17

WHAT to sell?

WHO to sell to?

Go to market

plan

HOW to sell?

• WHO to sell to?

• Which markets? Key geographies and scale

• Where to compete within identified markets (segment)?

• Who are the customers within the identified segments?

• WHAT to sell?

• What must be delivered in order to compete in the identified markets?

• Which of our products fulfill market demand?

• Do we have the capabilities to expand beyond current products/services?

• HOW to sell?

• What market approach is optimal?

• Which resources are required? People, partners, information, capital, facilities?

• Which sales activities, marketing support, communication, training etc is required?

China Focus – Go To Market Plan

Critical questions that needs to be answered:

What works at home does not necessarily work in China!

Surpassing Expectations

Our Glocal approach enables stakeholders to act local (currencies, T’s&C’s, contracts and IPR management) and at the same time go global with unprecedented control and cost efficiency.

CellMark USA

OEM Partner Management

Commercial Management

Local Law and Terms & Conditions

Distribution Partner Management

Local Law and Terms & Conditions

Our Solution – A Solid Trading Structure

US Manufacturer

CellMark CHINA

Hospitals

Patients

Distributors

Hospitals

Patients

Distributors

Hospitals

Patients

Distributors

Client Operation

CellMark JV SEA

Hospitals

Patients

Distributors

Hospitals

Patients

Distributors

Hospitals

Patients

Distributors

Tier 1 Markets

Hospitals

Patients

Distributors

Hospitals

Patients

Distributors

Hospitals

Patients

Distributors

Tier 2 Markets

Surpassing Expectations

1. "Guanxi” - "relationships" or "connections", critical for success. Build it every day.

2. Patience / Process is essential for success.

3. Embrace the “Customer is god” concept.

4. Long-term commitment. Build long-term goals and objectives into your proposals.

5. Cultural respect - Do not be too direct. Strive for diplomacy, consensus and harmony.

6. Understand “Face” – “Yes” interpretations A: Yes, B: No, C: I heard your view.

7. Contracts is an ambition, not a legal framework.

8. “Cross the river stone by stone” - Deng Xiaoping

9. China First - in China.

10.Staff is family, partners cousins.

11.Socializing - Eat, drink & sing!

China Focus – Business Behavior for Success!

Surpassing Expectations

China is a complex market with no guarantees of

success

But we can mitigate the risks associated with uncertainty.

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How did it all start?