Understanding Orthodontics: The Rise of Clear Aligners
Orthodontics is dedicated to correcting misaligned teeth and jaws, and clear aligners, commonly known as "invisible braces," are becoming a popular alternative to traditional metal braces. These aligners provide an aesthetically pleasing solution, utilizing advanced technologies such as computer-aided 3D diagnostics, personalized design, and digital manufacturing.
The treatment process begins with the dentist using an oral laser scanner to create a detailed scan of the patient's teeth. This data is uploaded to an orthodontic platform where artificial intelligence crafts a customized treatment plan. Finally, 3D printing is used to produce the clear aligners, which the dentist helps the patient learn to use effectively.
In the clear aligner market, Invisalign, owned by Align Technology, is a leader, boasting a significant market cap and impressive growth in stock value over the last decade. In China, Angelalign has emerged as a strong competitor, capturing the second-largest market share. Together, they dominate 82.4% of the Chinese market, with Angelalign accounting for approximately 41%.
Since entering its growth phase in 2018, Angelalign has seen revenues soar from 490 million to 810 million, with an average annual growth rate exceeding 26%. Their gross profit jumped from 60 million to 230 million, while net profit margins improved from 12% to 28%. The clear aligner segment, while still in its early stages compared to other healthcare markets, currently faces limited competition from established players.
In terms of pricing, Invisalign's aligners are typically priced between 40,000 and 60,000, while Angelalign offers four products at 35,000, 40,000, 28,000, and 25,000. Despite the competitive pricing, doubts remain about Angelalign's ability to sustain growth in a challenging environment.
Looking ahead, Angelalign plans to bolster its R&D efforts and innovate orthodontic solutions further. The company also aims to digitize systems to enhance operational efficiency and optimize medical services for a better user experience, though there are no immediate plans for international expansion.
Although Angelalign and Align Technology are closely matched in the Chinese market, their international standings diverge significantly. In 2020, Angelalign's revenues reached 817 million, with international sales contributing only a small fraction. In contrast, Align Technology reported total revenues of 16.129 billion, with approximately 92% generated from overseas markets.
Align Technology has consistently prioritized international growth, achieving notable expansion in China and beyond since 2017. Recently, Angelalign has increased its R&D investments, averaging costs of 10.3%, 12.5%, and 11.4% over the past three years, compared to Align's lower spending.
As digital orthodontic technology advances, the data collected will increasingly influence product development. Angelalign has accumulated nearly 700,000 dental data points, while the number of active Invisalign doctors in the U.S. reached 96,000 in 2019, with 6,700 based in that region.
With many of Invisalign's patents nearing expiration, the market is welcoming new competitors. Emerging brands like U-Lab and Klare Smile are leveraging technology to challenge established names. Klare Smile, linked to Shenzhen's Aishao Oral Medical Management Co., Ltd., has been actively securing trademarks.
This trend indicates that Chinese dental companies are making significant advancements in clear aligner technology and eyeing international markets. However, new entrants face challenges in developing AI-driven systems and gathering comprehensive case data. The future remains uncertain as to whether these firms will access overseas markets through acquisitions of high-tech orthodontic companies. There is a growing belief among orthodontists that we are entering an AI era, filled with both opportunities and challenges in the field.
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