Sports medicine, rehab shaping up for significant market breakout

China's sports rehabilitation industry is expected to surge thanks to rising awareness of the value of staying fit, favorable policies and the infusion of social capital.

The upstream segment of the industry is mainly made up of rehabilitation equipment manufacturers and the downstream segment features sports medicine departments or rehab departments affiliated with hospitals as well as specialized rehab institutions. Consumers of such services are mainly professional athletes and fitness enthusiasts.

China's sports rehab industry got off the ground relatively late. However, in recent years, with rising public awareness and athletes' increasing appreciation for such physical therapy, the sector has been witnessing accelerating growth.

According to a recent report issued by Beijing Puhua Policy Information Consulting Co Ltd, the market volume of China's medical rehab equipment sector is expected to reach 58 billion yuan ($9 billion) in 2022, with an compound annual growth rate of 20 percent.

Between 2014 and 2018, the sector grew from 11.6 billion yuan to 28.2 billion yuan, and the compound annual growth rate reached 24.9 percent, higher than that of the overall medical equipment sector.

"As early as 2014, the country's sports rehab sector had been emphasized in the document that year issued by the State Council to accelerate the development of the sports rehab sector. The document encouraged the development of sports medicine and rehabilitation medicine, the research and development of sports rehab technology and social capital's participation in opening sports rehab-related institutions," said Mou Lei, an analyst at online healthcare website vcbeat.top.

In recent years, government authorities including the National Health Commission and the General Administration of Sport have launched a series of policies to actively support the development of the sector and to encourage the establishment of rehabilitation conglomerates and chains. Since then, a rehabilitation service chain covering treatment, rehabilitation and long-term nursing was created, he said.

With the supportive policies, the number of enterprises involved in the sector has been surging.

Data from vbdata－vcbeat.top's database－showed that in the past five years, there were 34 newly established medical rehab equipment manufacturers, among which 17 produced high-end medical rehab robots.

According to the 2020 China Sports Rehabilitation Industry White Paper, which was issued by the Sports Rehabilitation Industry Alliance, by the end of 2020 there were nearly 400 sports rehab institutions in China, and the growth rate over the past three years surpassed 40 percent.

The institutions were mainly located in first-tier cities, and average treatment fees were around 1,000 yuan, said the paper.

It also showed that in 2020, China's regular exercise population reached 430 million.

If estimating a sports injury rate of 20 percent, the sports injury population is nearly 100 million, suggesting huge market potential.

"The surging exercise population and the public's increasing awareness toward sports rehab will constantly propel the development of the sector," Mou said.

Social capital infusion also served as a driving force.

According to vbdata, from February 2019 to January 2021, there were 11 financing deals in the sector, with the total value reaching 800 million yuan.

"China's exercise rehabilitation sector is at an emerging state, and financing has mainly been in the A-round. However, there's no denying that with the constant optimization of technology and the rapid increase in market demand, more capital will gradually flow into the sector," Mou said.

Nevertheless, problems in the sector still remain. According to a report from internet medical company jianke.com, 51 percent of general hospitals in provincial capitals lacked rehab training space, while 49.6 percent of the rehab equipment in those hospitals was outdated, making it hard to satisfy patients' sports rehab needs.

"There was also a huge demand gap in sports rehab trainers. Meanwhile, many consumers are still relatively unfamiliar with the concept of sports rehab, making the sector hard to attain public recognition. More efforts in market education are needed," Mou said.

He added that public healthcare insurance is another obstacle hindering the development of the sector. Currently, the country's medical insurance only covers some 20 items of exercise rehab treatment, which all belonged to inpatient care. Outpatient care is not covered.

"Public medical insurance coverage is key to the future development of the sector," Mou said.