Features of China's dental industry

1. High Prevalence of Dental Diseases While Low Rate of Dental Treatment in China

The World Health Organization (WHO) lists dental health as one of the top ten criteria for human health.

For a long time, the prevalence of dental diseases in China has been very high, and almost everyone has different degrees of dental disease problems, but on the contrary, the dental treatment rate is very low, especially China's children, while the elderly have a very high rate of dental caries. 

   The rate of permanent dental caries among 12-year-olds is 34.5%, 7.8% higher than a decade ago. The rate of deciduous tooth caries among 5-year-olds is 70.9%, 5.8% higher than a decade ago. The situation of children's caries has shown an upward trend.  

Among residents aged 35-44 years, the detection rate of oral calculus is 96.7%, and the detection rate of gingival bleeding is 87.4%, which increases by 10.1%, compared with that of 10 years ago. In sharp contrast to the high prevalence rate, the current treatment rate of patients with dental diseases in China is relatively low. The proportion of caries treated with fillings among 5-year-olds is 4.1%. The proportion of caries treated with fillings among children aged 12 is 16.5%.   

Among the elderly aged from 65 years to 74 years, the number of remaining teeth is 22.5 and the proportion of total toothless mouth 4.5%, and the repair proportion of missing teeth is 63.2%.   

2. Large Demand of Dental Professionals in China

In 2016, the number of practicing dentists (assistant) in China was 167,200, an increase of 13,600 over the previous year. With a population of 1.4 billion, China needs 320,000 dentists, considering every 4,000 people need one dentist in average.  

But the reality is that there are only 100 dentists per million people in China, far fewer than the number of 500-2,000 in developed or medium-developed countries in Europe and the United States. Brazil, which is also a developing country like China, has 1,200 dentists per million people, which fully shows that China has a huge demand gap for dentists.  

3. The Scale of Chinese Dental Service Market Is Expanding

The number of oral patients in China has maintained a steady and small rise, from 664 million in 2008 to 694 million in 2017. 

In the environment of favorable national policies, the good development of oral medicine is grasped, and the relevant layout is carried out one after another, so as to promote the continuous expansion of China's oral medical service market scale.

Oral medicine is compatible with the concept of health and beauty, with a good market concept and operating space.

In 2017, there were 677 professional dental hospitals in China, and it is expected to reach 767 in 2018.

With the development of economy and improvement of living standard, people pay more and more attention to oral health.

The number of visits to China's dental hospitals reached 35 million in 2016 and is expected to reach 37.11 million in 2018.

In 2008, the scale of China's oral medical service market has reached 20 billion Chinese Yuan.

In 2011, China's dental service market reached 32 billion Chinese Yuan.

By 2013, the scale of China's dental service market was close to 50 billion Chinese Yuan.

By 2016, China's dental service market reached 78.3 billion Chinese Yuan.

By 2017, China's dental service market had reached 88 billion Chinese Yuan, with a compound growth rate of 18% from 2008 to 2017.

With a conservative compound growth rate of 15%, it is estimated that China's oral medical service market will exceed 100 billion by 2020.

Every year, the number of orthodontics increases by 200,000, and the number of implants increases by 400,000.  

Compared with the penetration rate of 50-100 seeds per 10,000 people in developed countries, the domestic planting market is only 7 seeds per 10,000 people, which is still in its infancy and the industry potential is far from being realized.

The early dental clinics were located in Beijing and Shanghai, and the patients needed to have consumption ability and consumption awareness. Now the dental clinics have begun to sink in a large area, which also reflects the demand expansion from the side. 

4. Dental Hospitals: High Profit Margins and Large Assets

Compared with other specialist hospitals, the profitability of specialist dental hospitals is stronger. Among all specialist hospitals, the profitability level of specialist dental hospitals ranks the second after that of ophthalmic hospitals. 

In recent years, the scale of dental hospitals in China has been expanding year by year, and the assets of dental hospitals have been increasing. The total assets of China's dental hospitals exceeded 10 billion Chinese Yuan in 2012, 20 billion Chinese Yuan in 2016, and the total assets of China's dental hospitals is close to 27 billion Chinese Yuan in 2018. 

5. Private Dental Hospitals are Experiencing Explosive Growth in China

    The safety of oral care is relatively high, while it is not easy to have doctor-patient disputes. Meanwhile, the fixed asset investment is low. Most oral care items are not covered by the scope of national medical insurance. Thus, dentists do not need to deal with the national medical insurance. Patients pay more attention to the convenience of dental treatment. So the business model of dental hospitals is mostly self-employed.

In the long run, the brand image of the chain operation of dental hospital is good, the passenger flow is stable, and the future development space is huge.

When hospitals fail to increase physician income and reduce practicing costs, dentists tend to practice independently rather than in the hospital system.

Most dental businesses are non-medical insurance projects, which do not require cross-department and large-scale team cooperation. Meanwhile, the investment threshold of individual dental clinics is relatively low. Therefore, dentists with medical practice experience, stable customer base and initial capital can practice independently without being restricted by the hospital salary system and get higher remuneration.

The number of private dental clinics in China accounts for 42%, and the number of patients in private clinics accounts for 20%. 

In 2016, the number of self-employed people in the United States reached 29,165, accounting for 20% of all doctors.

From 2017 to 2018, the number of private dental institutions increased from 47,033 to 54,479 (only referring to the number of registered dental institutions in the Department of Industry and Commerce, and the number of private dental institutions in the market exceeded 80,000), with an increase of 7,746.

Private dental institutions continue to grow, driven by the investment capital.

In the two years of 2017 and 2018, a total of 11 financing events were completed in the dental industry, with a total financing of more than 3.5 billion Chinese Yuan. 

Among them, the performance of Baibo Dental is outstanding, financing more than 2 billion Chinese Yuan.

The financing amount of Rier Dental, Happy Oral, Maitong Dental, Jinsong Dental, Moore Dental is all more than 100 million Chinese Yuan.

The private dental industry has entered the mature period of gradual acceleration of industry mergers and acquisitions, and the number and quality of private dental institutions are expected to continue to improve under the drive of investment capital.