How would one describe the animal health market in China?
It includes the major global players, but it is also home to more than 2,000 local companies specializing in food producing animal products, in particular antibiotics, parasiticides and vaccines. These are subject to specific regulations: only a Chinese company is authorized to distribute vaccines registered in China by a foreign company. Other products have no constraints in terms of distribution for companies out of China.

What about Virbac in this market?
Since 2003, the Group has been operating a representative office in Beijing primarily to deal with regulatory affairs. Since 2012, Virbac has also been operating a commercial subsidiary in Shanghai and Beijing. From the outset, Virbac made the choice to invest in the companion animal segment, where not only was there no local competition, and some products could be launched without a marketing authorization. Furthermore, in this segment, Virbac China spearheaded the first direct distribution model to all veterinary clinics with cashon delivery payment.

What are the main market trends?
They relate, first and foremost, to competition. For two years now, there have been several international companies operating to date primarily in the swine/poultry vaccine market that have entered the companion animal sector. We have also seen the emergence of generics from local companies that are becoming more and more interested in the companion animal market. In an increasingly maturing market, growth is expected to be fueled by the rise in owners' spending, which is currently at much lower levels than in Europe, Japan and the USA, as well as by a higher number of clinics.

Are there other changes?
Yes, on the regulatory front. In 2016, all pharmaceutical products registered in China must have a QR code on their packaging in keeping with tracking requirements imposed by local authorities. Another change: changing consumer habits that directly impact the distribution of veterinary products, increasingly marketed through online sales platforms like Alibaba. Finally, there are still product opportunities, for example, in the equine product sector where, despite a significant number of animals, no product is registered in the country, or even on the bovine market, where the very concentrated milk supply chain is especially focused on the quality of its products.

How is Virbac dealing with these evolutions?
We should primarily step up our marketing activities by capitalizing on Virbac’s reputation and high quality image, all the while consolidating our relations with veterinarians through event sponsorships, workshops or the sales force. From the standpoint of distribution, we are introducing in 2016 the O2O B2V, Online to Offline, Back to Vets (to Virbac!) program, which should both enable the development of a network of online stores and refer online buyers to veterinary clinics that are project partners.

And on the regulatory front?
It’s quite a challenge to adapt QR code implementation processes within the required time limits. This involves a great deal of coordination with the supply teams from the main office. Finally, as for products, we are working with Virbac Australia to build a product range with special import licenses prior to getting marketing authorizations. With support from BVT, we are also going ahead with the launch of the range of diagnostic tests for mastitis detection in dairy cows.

GO BACK