Challenges for LMIC exports
Most respondents expressed interest in strengthening sales in LMICs. However, based on the interviews, they face several common
challenges:
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Operational Trade-offs in Price-Sensitive Segments: In the lower-end segment of the market, many products still show limited differentiation. This contributes to price-driven
competition, especially in export-oriented sales. Under continued margin pressure, there have been instances where cost-control
measures have affected material selection or certain production procedures, raising concerns around product consistency and
long-term performance.
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Logistical challenges for export: According to expert interviews, recent global conflicts have led to delays in Red Sea shipping, with shipping costs increasing
up to fivefold. This specifically affects bulk products like wheelchairs. In addition, African markets have limited access
to US dollars, making cross-border payments difficult.
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Need to improve access to local information and resources for responding to LMIC government tenders: Many interviewed suppliers currently rely on distributors or exporters when responding to government tenders in LMICs. This
is often due to limited access to local market information, challenges with product registration, and a lack of direct engagement
channels with government stakeholders. The involvement of multiple intermediaries has, in some cases, led to significant price
mark-ups—end-user prices can exceed three times the original ex-works pricing from Chinese manufacturers.
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Differences between Chinese and local standards: In some LMICs, the standards and certification requirements used in procurement differ from those in China. For example,
while some hearing aids are certified as medical grade in China, they may not align with medical-grade classifications used
in other markets. Similarly, for prostheses, certain LMIC buyers require third-party certification reports or a Certificate
of Free Sale issued by the China Council for the Promotion of International Trade. Applying for these additional documents
can lead to delays and increased costs, which may result in missed business opportunities for suppliers.
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Product registration cost and time: Many suppliers interviewed highlighted that product registration in LMICs is expensive, a lengthy process and sometimes requires
additional expenses for quality certifications. According to a hearing aids supplier, the minimum product registration period
across LMICs is around six months, while it can take up to two years in some Latin American countries. And several wheelchair
suppliers reflected that many African countries lack in-country quality inspection capabilities, commonly requiring third-party
certifications, such as those from SGS, which further increase manufacturers' costs. The certification and testing can cost
around US$13,000 to US$15,000 per product, with an additional US$20,000 for each product’s local registration, and often taking
3 to 12 months to complete.48
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Lack of access and understanding of global knowledge and standards: For example, WHO launched the Assistive Products Specifications and Preferred Product Profile to guide hearing aid procurement
in LMICs, which could be helpful reference documents for suppliers to understand the market and strategize accordingly. However,
very few suppliers have indicated that they are aware of these documents. Interviewed prostheses suppliers also reflected
that they are fragmented and operate on a small scale, thus lacking the resources and dedicated sales personnel needed for
global market research and business development.
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Low brand awareness: For example, in hearing aids, the global market is dominated by the top five international companies, and awareness of Chinese
brands among distributors and exporters remains low. And for spectacles, although China exports a large volume, most companies
remain weak in brand marketing and only sell as OEM/ODMs. According to supplier interviews, it is common to see spectacles
priced between US$3-US$5 ex-works reach prices over tenfold once they are rebranded with a global label.
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Perceptions shaped by differing product standards: In some assistive products, especially those with higher technical complexity, product standards are applied in varying ways.
For example, China’s national standards for prostheses are generally well-developed for domestic use, but they may not always
align with the requirements or expectations in other countries. These differences can contribute to variations in product
performance and influence how such products are perceived in international markets.
Several challenges are identified for specific product category, for example in the following fields:
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