China's orthodontic market developing fast

China’s orthodontics market has been developing rapidly, and players are stepping up efforts to grab market share as people become increasingly concerned about their personal appearance and teeth. Microcloud AI & Robotics Group, a digital dental solutions provider based in Jiangsu province, announced a financing round worth more than CNY100 million this month. Company Founder Liu Peng said the financing will be used for product development, service upgrades and promotion of its invisible braces. This latest round of financing comes less than three months after a previous round worth CNY100 million. On June 16, Shanghai-based Angelalign was listed on the Hong Kong Stock Exchange, becoming the first listed orthodontics company in China. On the first day of trading, its share price soared 183% at one point to hit HKD490 a share. It closed that day at HKD401, up nearly 132% from its initial public offering (IPO) price.

“Tremendous potential on the demand side lies in China’s invisible orthodontics market. The already existing demand has not yet been met, and new demand is rapidly emerging,” said Dun Yuting, Healthcare Analyst at online technology media platform 36Kr. Shanghai-based market research firm China Insights Consultancy said that between 2015 and 2020, visits to orthodontists in China surged from 1.6 million a year to 3.1 million, with a compound annual growth rate of 13.4%. The figure is expected to reach 9.5 million by 2030. According to Angelalign’s prospectus, among the 3.1 million orthodontist visits, only 11% used invisible oral appliances, while among the 4.5 million cases in the United States, the ratio was 33.1%, demonstrating the development potential of invisible orthodontics.

Between 2015 and 2020, China’s invisible orthodontics market expanded from USD200 million to USD1.5 billion, with a compound annual growth rate of 44.4%. The subcategory accounted for 19% of China’s orthodontics sector last year, up 12.1 percentage points from 2015, and the ratio is expected to reach 40.3% by 2030, CIC said. “Demand growth in an era where ‘face value’ matters makes invisible oral appliances a gold mine in the orthodontics sector,” Dun said. In 2003, scholars from China’s Tsinghua University and the Capital Medical University working on invisible orthodontics technology were facing financial troubles. Li Huamin, Founder and CEO of Angelalign, saw a business opportunity, bought the technology from the universities and established the company.

However, the domestic invisible orthodontics market was virtually nonexistent. Between 2003 and 2015, Angelalign spent large sums of money on research and development as well as marketing, and suffered huge losses. It wasn’t until 2015 that the company began making a profit. According to Southwest Securities, there were more than 40 invisible orthodontics brands in the Chinese market by April this year, with most established between 2018 and 2020. Industry insiders said the overall penetration rate of the domestic invisible orthodontics market is relatively low, and players should step up efforts to tap market potential. Industry experts said the overall oral health awareness of Chinese consumers is weak. Even if symptoms such as toothaches and bleeding gums occur, instead of going to an orthodontist, they just buy some herbal toothpaste or painkillers. To further explore the sector, industry players should continue to educate the market, they said, as reported by the China Daily.