The three stages in cold-chain equipment industry, namely, “the first kilometer”, “circulation and transportation” and “the last kilometer”, correspond to the pre-cooling equipment, cold storage equipment, refrigerated trucks/refrigerated container transport equipment, and “the last-kilometer equipment” respectively, of which cold storage and refrigerator truck are among the core equipment links. The “first and the last kilometer” links have large potential development space.

Second, there is no commercial scale demand for pre-cooling facilities.

There is large potential space in this industry, for the pre-cooling rate is only 30% in China, much lower than 95%, that in Europe and the U.S. Both supply end and demand end are highly dispersed, so it is difficult to form large-scale leading enterprises. As for the product form, there is no commercial scale demand at this stage.

The market size of cold storage equipment is about CNY 6 billion. Entering a stable growth stage, there will be large development potential in automatic cold storage market in the future. Total cold storage capacity was expected to be over 100 million cubic meters in 2016. The cold storage market of the year valued CNY 20 billion, of which the share of refrigeration equipment was about CNY 6 billion. It is expected that the average scale of the cold storage market will be CNY 20 billion per year in the next five years, and the highly-automatic three-dimensional cold storage may be the investment tendency. Daleng Holdings together with Yantai Moon have formed a monopolistic competition pattern in refrigeration equipment field.

Third, the market size of refrigerator trucks is CNY 8.5 billion, of which the share of cold machines is CNY 3.4 billion

It is expected that the CAGR of refrigerated truck market will be 10.5% in the next 5 years, which is expected to develop towards the light, multi-temperature and electric types. The reserves of refrigerated trucks was 93,400 in 2015, which was equivalent to a one-year growth in the U.S. or Europe, and reserves per capita was merely one-tenth that of Japan. The market size was over CNY 8 billion per year. It is estimated that the market size will reach CNY 15 billion per year with the CAGR being 11.8% in 2020. However, as the refrigeration technology being mature and the market competition being fierce, it will be hard to make profit from standardized products.

The “last kilometer” commercial mode of cold chain equipment remains to be explored. The potential market demand is large, the types and functions are abundant (including refrigerated distribution trucks, refrigerator/freezer, refrigerated incubator, self-pickup cabinet), and the gross profit rate is high. However, the demand for equipment in the “last kilometer” is limited by the economic cost of cold-chain delivery, therefore the present market is still at the exploration stage of commercial mode.

Forecast on Market of Cold Storage in China, 2017-2020

Source: CRI

Forecast on Refrigerator Truck Market in China, 2017-2020

Source: CRI

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Research Report on Cold Chain Logistics Industry in China, 2017-2021

CRI estimates that in 2016 in China, over 130 million tons of goods were transported and distributed via cold chain logistics and the market size was over CNY 130 billion.

The post CAGR of China’s Cold Chain Logistics Industry over 20% During 2017-2021 first appeared on CRI Report.

China’s health industry enjoys continuously fast growth. The scale of the industry grew by CAGR of 16.03% from 2011 to 2014, reaching CNY 2.5 trillion in 2014. Specific examination of the growth of sub-industries of pharmaceuticals, medical devices, healthcare products and medical cosmetics are as follows: The CAGR of the pharmaceutical industry was 19% (2010-2014); that of the medical device industry was 30.50% (2010-2014); that of the healthcare industry was 30.40% (2010-2014); that of medical cosmetics was 16.58% (2010-2014).

The rapid growth of the health industry is driven by three forces. Firstly, =aging population and environmental pollution resulted in people’s rising healthcare demand. Secondly, people are spending more on healthcare out of enhanced health awareness. Thirdly, government policies are behind the development of a healthy China. These favorable factors will continue to promote the development of the health industry.

I. Accelerating aging and environmental pollution push up demand for the health industry

In 2015, as much as 10.5% of China’s population was above 65 years old. The average life expectancy was 74.83 years in 2010. Looking ahead, the general trend will be characterized by accelerating aging and extension of life expectancy. Under such circumstances, elderly care and chronic diseases have gained much attention. Meanwhile, deteriorating environment is bad for people’s health, thereby raising their health awareness. Three national studies on the cause of death indicated that the mortality of malignant tumor increased from 75.6/100,000 to 91.24/100,000 during the past three decades. The mortality of lung cancer, liver cancer and colorectal cancer, which are related to the environment and lifestyle, rose significantly.

II. Increased health spending out of enhanced health awareness

International development experience shows that when GDP per capita exceeds USD 6,000, consumption upgrading typically begins and non-necessity consumption becomes the major consumption. China’s GDP per capita exceeded USD 6,000 in 2011 and people’s disposable income increased from CNY 15,780 in 2008 to CNY 29,381 in 2014. Increasing income leads to increasing healthcare expenditure. From 2011 to 2014, healthcare expenditure of urban residents grew at an average annual rate of 10.66%, higher than the growth of consumption expenditure at 10.35%. Healthcare expenditure has been growing significantly in recent years. In 2014 ,it grew by 14.91%, substantially higher than the growth of consumption expenditure by 8.01% and that of residents’ disposable income by 8.98%.

III. Policies behind health development in China

The Thirteenth Five-year Plan proposed that “Healthy China” development should be promoted as a national strategy. It stated that developing a healthy China requires deepening the reform of medical and healthcare system, rationalizing pharmaceutical prices, connecting medical care, medical insurance and pharmaceuticals, building the basic medical and healthcare system and the modern hospital management system that covers both urban and rural areas, and implementing the food safety strategy.

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According to CRI estimation, the market value of health examination was approximately CNY 80 billion in China in 2015. It is estimated to preserve a growth rate of over 10% each in the next few years.

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CRI estimates, in 2015, the market size of health food exceeded CNY 160 billion in China. It is expected to surpass CNY 300 billion in 2020, forecast by CRI.

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In 2014, the sales value of the global MRI devices reached USD 5.4 billion. The market share of Simens Healthineers was 22%, ranking the first, according to CRI. Other leading enterprises included GE Healthcare, Philips Healthcare, TMC and Hitachi Medical Corporation.

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According to CRI, the skin care product market in China is the leading emerging one in the globe for the economy and population.

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The post Analysis of Status Quo and Driving Forces in China Health Industry first appeared on CRI Report.