Series 3 of 'Dental 50 Opportunities': Arrail Select – A New Engine for Arrail Group's Growth

KPMG China’s Top 50 Private Dental Healthcare Enterprises is part of the KPMG China Healthcare 50 series. KPMG China has long maintained a close focus on development trends within China’s healthcare industry. Through this public-interest initiative in the dental sector, it aims to identify outstanding benchmark enterprises in the dental healthcare market, facilitate the healthy growth of more high-quality private dental healthcare providers, and jointly explore emerging trends for the future development of China’s dental healthcare market from a global perspective, thereby supporting the transformation and rise of China’s dental healthcare industry.

To support the “Top 50 Private Dental Healthcare Enterprises in China” initiative, KPMG China has specially curated and launched the “Dental Top 50 Opportunities” series. This series focuses on companies across the upstream and downstream segments of the dental healthcare industry value chain, exploring topics such as the current market environment, investment hotspots, and industrial transformation, to provide insights into the future development trends of the dental healthcare sector.

In this article, we present the latest installment of the “Dental 50 Opportunities” dialogue series in a four-question, four-answer format. In this interview, Wang Pu, Audit Partner at KPMG China, speaks with Zou Qifang, Founder and Chairman of Arrail Group.

Wang Pu:In 2022, Arrail Group officially launched its “Arrail Brand Upgrade Strategy” and introduced the new sub-brand “Arrail Select.” Compared with the Arrail Dental brand, Arrail Select pioneered a membership-based model, providing members with higher-quality oral health management solutions. What is the significance of the launch of the “Arrail Select” brand for Arrail Group?

Zou Qifang:Oral healthcare possesses the dual attributes of both consumer services and retail, making it crucial to integrate brand awareness into corporate management. Brand positioning serves as a fundamental cornerstone of brand building. Since its inception, Arrail Group has targeted the mid-to-high-end consumer segment, committing to provide patients with high-quality health management services. With 23 years of deep cultivation in China’s oral healthcare market, Arrail Group has established profound and lasting influence, evolving into a leading large-scale private provider of premium dental care services. The booming dental industry is continuously reshaping the existing consumption structure and driving the ongoing upgrading and iteration of service brands; however, current service brands struggle to meet the growing consumer demand.

Leveraging its keen market acumen, Arrail Group has identified the consumption demands of family-oriented clientele and officially launched its new sub-brand, “Arrail Select.” Advocating the brand proposition of “Exquisite Privileges, Curated Excellence,” Arrail Select introduces a membership-based model tailored specifically to high-end family customers for the first time. This comprehensive brand upgrade strategy will provide stronger momentum for Arrail Group’s future development.

Wang Pu:Currently, the dental healthcare market has entered a phase of rapid growth, with expanding essential demand for dental services across the population and growing public awareness of oral health. How can Arrail Group seize the opportunity presented by the industry’s rapid expansion and strategically position its brand marketing to enhance customer acquisition?

Zou Qifang:Amid the rapid development of the current industry, the key to customer acquisition for dental healthcare enterprises lies in strengthening marketing capabilities to enhance acquisition efficiency. A review of Align Dental Group’s transformation journey reveals distinct strategic directions and priorities at each stage:

Phase I: Exploring New Customer Acquisition Models by Drawing on Pharmaceutical Industry PracticesSince its inception, Arrail Group has drawn on the pharmaceutical industry’s experience in acquiring customers through marketing initiatives. However, these efforts yielded suboptimal results, further highlighting issues such as low engagement among existing customers and weak customer stickiness. How can this customer acquisition dilemma be resolved? Recognizing that service experience is a critical factor influencing consumer decision-making, Arrail Group developed the philosophy of strengthening internal capabilities to optimize service quality.

Phase Two: Establishing Two Major Customer Acquisition Models and Launching Diverse Offline Activities. A review of Arrail Group’s financial reports reveals that the group has attracted a significant volume of patient traffic with relatively low marketing expenditures. This success is attributable to the large number of patients acquired through word-of-mouth referrals and repeat visits, driven by high-quality services. Meanwhile, Arrail Group encourages word-of-mouth viral propagation through offline marketing activities such as lectures and salons, further enhancing customer loyalty.

Phase III: Disrupting Traditional, Limited Approaches and Innovating Online Customer Acquisition Channels. Amidst the powerful surge of intelligence-driven transformation and continuous industry innovation, reliance on a single offline customer acquisition channel has resulted in a limited audience reach and hindered growth in patient flow. In response, Arrail Group has incubated online customer acquisition channels, leveraging social media to extensively promote its brand narrative. By establishing a distinguished reputation for high-quality service and exceptional patient experience, the group has encouraged existing customers to organically share their positive experiences online, thereby further enhancing brand penetration. Through an integrated online-to-offline (O2O) approach, Arrail Group has successfully reached a broader base of potential consumers.

Looking ahead, Arrail Group will remain committed to its customer acquisition strategy, which prioritizes customer experience and is supported by promotional efforts. By sharing information through diversified channels and strengthening communication with customers, Arrail Group aims to enhance its brand influence in the field of dental healthcare.

Wang Pu:In summary, customer acquisition channels are driven by existing clients’ evaluations of service quality, leveraging social interactions and word-of-mouth to significantly expand the new customer base.

Wang Pu:In terms of talent pipeline development and team building, Arrail Group has launched the “Evergreen Class,” with instruction personally delivered by the Chairman. Furthermore, Arrail Group actively recruits experienced experts and senior dentists from both domestic and international markets to strengthen its talent reserve. How does Arrail Group formulate its talent development strategy?

Zou Qifang:Since its inception, Arrail Group has recognized talent as the “evergreen vine” of corporate development, with its talent strategy primarily focused on two core teams: physicians and management.

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As one of the first enterprises in China to recruit from top dental schools, Arrail Group has hired over 100 master’s and doctoral graduates for seventeen consecutive years, cultivating a cohort of exceptional dentists with solid foundational knowledge, advanced clinical skills, and extensive experience. Today, the majority of these dentists have become core pillars of Arrail Group, injecting greater vitality into its development. More importantly, their professional growth is closely intertwined with the group’s trajectory; they genuinely embrace the corporate values, achieving resonance between personal aspirations and corporate advancement through cultural heritage.

As enterprises expand in scale, how can they overcome the increasingly prominent bottleneck of managerial talent shortage? The only solution lies in companies assuming the role of talent development themselves. Reflecting on its early startup phase, Arrail Group adopted a cultivation approach characterized by “hands-on mentoring and empowered practice,” yet still failed to achieve large-scale talent transformation. Consequently, it established the “Evergreen Class” to further strengthen competency training for managers. At this point, Arrail Group’s talent strategy became clearly defined, centering on two core principles—personalization and practical application—with the aim of cultivating outstanding managers who are “grounded in operations yet capable of strategic oversight,” thereby laying a solid foundation for enduring business success.

Wang Pu:By empowering employees’ rapid growth through multi-dimensional development, Arrail Group has built a robust and well-staffed talent pipeline. Please share practical case studies of your talent development initiatives.

Zou Qifang:What impressed me most was that when Arrail Group conducted its first on-campus recruitment drive for dentists, the large lecture hall was packed to capacity. During the presentation, an interesting exchange took place.

Wang Pu:Whether for doctors or managers, Arrail Group has invested substantial time, energy, and resources in cultivating industry novices into leaders with a strong sense of corporate identity. In the service industry, people are the primary determinant of service quality; therefore, talent is undoubtedly an enterprise’s most important asset.

Zou Qifang:Attracting and retaining talent also poses a significant challenge for enterprises. Aligning harmoniously with its employees, Arrail Group actively fosters a positive environment characterized by co-creation, collaborative governance, and shared benefits. Recognizing frontline employees as the architects of the brand, Arrail Group has reserved 22.4% of its total equity to grant to over 600 core managers at the grassroots level. By building a community of shared interests between the enterprise and its employees, Arrail Group consolidates collective strength to drive its sustainable development.