(Yicai) July 2 -- Fear and shock are spreading among Chinese exporters of medical devices after two sellers of medical equipment were kidnapped and killed in the Philippines.

The whole industry is in panic, becoming more cautious about Southeast Asia despite the region's growth potential, Yicai learned from several executives.

The Chinese Embassy in the Philippines announced today that two senior executives of Chinese medical device companies were murdered in the SE Asian nation. They had decided to visit the country last month to explore business opportunities but were kidnapped upon arrival, according to online information.

Going Global

One of the victims was called Jimmy, an executive in charge of a medical device distributor with years of experience. After working for a multinational manufacturer, he pledged his house to start his business as a distributor of prosthetic heart valves and intravascular ultrasound equipment.

Multiple people who knew Jimmy said that he was a capable businessman with high integrity and diligence. "Jimmy’s capabilities were recognized by many customers, such as some big hospitals. His business just got on the right track last year," one of them said to Yicai.

Another friend suspected that Jimmy was lured to go to the Philippines as criminals take advantage of Chinese companies that are eager to expand abroad.

Allure of SE Asia

Southeast Asia, which has a population of nearly 700 million people, has become a new growth point for Chinese exporters of medical devices over recent years, driven by the Belt and Road Initiative.

SE Asia made up more than 30 percent of China's exports of healthcare equipment in 2022 and the share is expected to further grow, according to public data.

The chief executive of a Chinese manufacturer of medical equipment said that at present, medical devices made in Europe and North America still account for a larger share of such imports in SE Asia but Chinese firms can offer advantages in the price-performance ratio.

Last year, the market size of medical devices in the Philippines totaled nearly USD3 billion. Importers have room for growth as the health department is reportedly planning to shift to cheaper and better foreign products. Heart disease is the most deadly disease in the Philippines, making up almost a fifth of deaths.

However, the above-mentioned CEO also noted that businesses rely on local resellers in SE Asia so it is difficult for Chinese companies to do business on their own.

SE Asia lags behind in supervision and infrastructure, which makes it hard for medical equipment manufacturers to make a profit, market insiders said. Moreover, countries such as Indonesia plan on hiking their tariffs on China-made medical devices which further hurts their profitability.

Editor: Emmi Laine