Aiyan Hospital Achieves 43.83% CAGR Over 10 Years by Pioneering China's Ophthalmology Downward Market

Ophthalmic medical services remain a prime sector.

“From the perspective of the primary market, ‘the number of financing events in China’s ophthalmic medical industry has remained above 30 annually since 2018; since 2019, there have been 16 mergers and reorganizations in China’s ophthalmic sector. The momentum in China’s ophthalmic industry remains robust.’ This statement was made by the founder of an ophthalmic company at the 16th Scientific Meeting of the International Society of Ocular Pharmacology and Therapeutics held this August.”

Furthermore, according to Dongguan Securities, the market size of China’s ophthalmic medical services grew from RMB 50.71 billion in 2015 to RMB 103.74 billion in 2019. Driven by multiple factors, including an accelerating aging population, rising demand for myopia prevention and control among adolescents, and heightened public awareness of eye health, the market is projected to reach RMB 252.15 billion by 2025.

“This means that while the Chinese ophthalmic medical services market is sufficiently large in scale, frankly speaking, the current domestic market already exhibits a competitive landscape dominated by major players,” stated Aiyan Hospital Management (Beijing) Co., Ltd. (hereinafter referred to as “Aiyan Hospital”) in an interview.

Since the beginning of last year, China’s secondary market has witnessed a surge in initial public offerings by ophthalmic medical service providers, with eight listed companies currently including Aier Eye Hospital, Huaxia Eye Hospital, and Guangzheng Eye Hospital. Moreover, numerous reports and research studies have explicitly stated that the domestic ophthalmic medical services sector has evolved into a competitive landscape characterized as “one superpower and multiple strong players.”

In this context, for “latecomers” looking to enter the market, it is clearly unwise to engage in head-on competition with industry giants; pursuing differentiated development is the key to survival.

So, how can latecomers concretely map out a differentiated development path? We may find the answer in the case of Aiyan Hospital.

Aiyan Hospital’s greatest point of differentiation is its strategic focus on lower-tier markets since its inception. In recent years, these lower-tier markets have also become a key target for major players in the ophthalmic medical services industry.

The primary driver is the dual force of demand and policy.

The uneven distribution of medical resources in China is an industry-wide consensus, and ophthalmic medical resources are no exception. According to statistics from Heda Capital, 70% of ophthalmologists in China are currently concentrated in large and medium-sized cities, while the distribution of ophthalmic medical institutions exhibits characteristics such as “strong provincial capitals, weak grassroots levels.” Nevertheless, there is substantial demand for ophthalmic diagnosis and treatment at the grassroots level.

Consequently, the Chinese government has successively introduced policies to promote the decentralization of high-quality ophthalmic medical resources. For instance, the "14th Five-Year Plan for National Eye Health (2021–2025)," issued by the National Health Commission, stipulates that each prefecture-level city must have at least one general hospital at Level II or above with an independently established ophthalmology department. It also encourages county-level general hospitals with the necessary conditions to set up independent ophthalmology departments and provide outpatient services, thereby expanding the capacity and extending the reach of ophthalmic medical resources.

Encouraged and called upon by relevant policies, ophthalmic medical resources are gradually shifting toward lower-tier markets. Aiyan Hospital has anchored its business in these lower-tier markets from the very beginning.

Beyond market demand and policy incentives, Aiyuan Hospital’s decision to deeply cultivate lower-tier markets also stems from considerations of store-opening costs. “In true lower-tier markets, costs for human resources, facility leasing, utilities, and marketing are significantly lower than in first-tier cities. This creates a competitive advantage with relatively higher gross margins,” Aiyuan Hospital revealed to VCBeat.

So, how exactly does Aiyi Eye Hospital establish its presence in lower-tier markets?

VCBeat has learned that Aiyan Hospital currently adopts a tiered diagnosis and treatment model, with facilities structured from top to bottom as prefecture-level hospitals, county-level hospitals, county-level outpatient departments, and township-level clinics.

Among these, township-level outpatient clinics serve as the grassroots tier of the entire healthcare delivery system. Capable of providing basic diagnostic and treatment services, they represent a strategic lever for Aiyan Hospital to capture the primary care market. According to Aiyan Hospital, its outpatient clinics have currently achieved a net profit margin of 25% and are able to contribute tens of millions in revenue to higher-tier hospital campuses.

County-level hospitals provide diagnosis and treatment services for more complex ophthalmic conditions, while also featuring low investment requirements, short payback periods, and high returns on investment. Prefecture-level city hospitals serve as regional medical technology centers and hubs for professional talent development.

“Aiyang Hospital stated, ‘The self-developed model of deep city-level penetration based on a “four-tier diagnosis and treatment” system features lower expansion costs, faster implementation, and higher resource integration efficiency. Moreover, its outpatient clinics can be established right at patients’ doorsteps, making it far more efficient, professional, and comprehensive than the traditional model adopted by various ophthalmic medical institutions, which relies on forming health education or grassroots marketing teams to conduct centralized community screenings.’”

During our interview with Aiyan Hospital, we identified another key term: self-built. VCBeat also learned that all five hospitals and 15 outpatient clinics under the Aiyan Hospital brand are self-built. This approach is closely related to the clinical services they offer.

Unlike the mainstream players in the current market that limit their clinical services to high-margin specialties, Aiyan Hospital operates 11 ophthalmology-related departments. This means that there is a lack of suitable acquisition targets in the market for those seeking growth through mergers and acquisitions. Consequently, at this stage, Aiyan Hospital can only achieve expansion through organic growth.

——“But wouldn’t that make the expansion pace seem slow and the business model overly asset-heavy?”

“Speed is not the primary concern; what matters is making steady, grounded progress. Among the 11 departments established at Aiyan Eye Hospital, some indeed have lower profit margins or are not profitable. However, by striving to provide comprehensive coverage for the diagnosis and treatment of ophthalmic diseases, we can increase patient engagement opportunities and strengthen patient trust, thereby organically building a strong brand reputation. As for the asset-heavy model, frankly speaking, it does give rise to a series of challenges. Yet, our approach is to address these issues one by one.”

The “issues” mentioned above can be broadly categorized into management-related and talent team-building-related challenges. These, in fact, represent common challenges faced by the entire ophthalmic medical services industry.

Let’s first examine how Aiyan Hospital addresses its management challenges. VCBeat has learned that Aiyan Hospital adopts a “large middle-office, small front-office” management structure and has established an in-house IT team to achieve systematic, digital, and standardized management.

As for talent development, Aiyan Hospital has established its own team of physicians and implemented a comprehensive, specialized physician training mechanism. Furthermore, to meet the diverse healthcare needs of patients, Aiyan Hospital can leverage ophthalmology resources from multiple top-tier (Grade 3A) hospitals, including Beijing Tongren Hospital, Peking Union Medical College Hospital, and PLA General Hospital (301 Hospital), providing remote consultations and on-site surgical services by renowned domestic experts.

—“In fact, while dentistry relies more heavily on the professional expertise of physicians, ophthalmology is more dependent on specialized equipment. Therefore, in addition to a robust talent development mechanism, Aiyan Hospital has also invested in advanced specialized equipment meeting high standards to ensure high-quality diagnosis and treatment.”

The road ahead is fraught with challenges, but this does not dampen Aiyuan Hospital’s confidence in its development. In the future, ophthalmic medical service institutions will have clearer self-positioning and will continue to deepen their expertise within their respective fields. Therefore, Aiyuan Hospital believes that the future of ophthalmic medical services will no longer be an era of rapid, extensive expansion, but rather one of focused cultivation in specialized niches.