Business Model Innovation in China's Booming Invisible Orthodontics Industry: A Prospectus Overview

Clear aligner orthodontics has become one of the hottest sub-segments in the dental industry.

In the primary market, since 2021, companies including Smartee, Yaling Technology, MicroCloud AI, Yuexiao Technology, Dijia Medical, and foursmile have secured financing, attracting numerous top-tier investment institutions such as Beijing Taikang Investment, Sequoia China, Yuanjing Capital, and Sinopharm Capital. Notably, Smartee and MicroCloud AI each raised hundreds of millions of RMB.

From the perspective of the secondary market, Angelalign listed on the Hong Kong Stock Exchange in mid-last year, surging 132% on its debut day, with its current market capitalization exceeding HK$18 billion.

Investors’ continued bets signal sustained optimism for the clear aligner sector.Riding the Wave: What Drives the Boom in the Clear Aligner Industry? What Problems Does It Actually Solve, and How Is Its Business Model Structured? To find answers, VCBeat interviews orthodontic experts, investors, and industry stakeholders.

Oral health issues among the Chinese population are receiving increasing attention, particularly as the overall prevalence of malocclusion is significantly higher than that in European and American countries.

According to a nationwide survey organized by the Orthodontic Professional Committee of the Chinese Stomatological Association, the prevalence of malocclusion in China is approximately 70%. Data from the Frost & Sullivan report shows that the population with malocclusion in China was about 1.037 billion in 2019, significantly higher than the 244 million in the United States.Using this data as a reference implies that three out of every four people in China have a need for orthodontic treatment.

For patients, abnormal development of the maxillofacial region can easily lead to dental caries and periodontitis. Meanwhile, tooth misalignment and malocclusion can also cause periodontal damage. Severe malocclusion may even affect oral functions; for example, anterior open bite affects speech, while posterior crossbite or malocclusion impairs chewing function.

Based on this, a growing number of patients are recognizing the importance of orthodontic treatment, and the orthodontics market is beginning to expand rapidly.: In China, the number of orthodontic cases increased from 1.6 million in 2015 to 3.1 million in 2020. Among these, the number of orthodontic cases treated with clear aligners is projected to reach 3.8 million by 2030, representing a compound annual growth rate (CAGR) of 27.6%. The market holds immense potential, with its size expected to reach the hundred-billion-yuan level within a decade.

“From the patient’s perspective, the advantage of clear aligners is that they can be removed and inserted at will, making oral hygiene more convenient and thus encouraging patients to opt for clear aligner therapy. The discreet nature of these appliances also enhances aesthetics and comfort for wearers. From the clinician’s standpoint, although clear aligner treatment reduces chairside time, it increases the workload involved in backend treatment plan modifications, requiring greater investment of time and effort in treatment planning and design,” said Zhu Xianchun, Director of the Department of Orthodontics at the Stomatological Hospital of Jilin University and a member of the Chinese Society of Orthodontics, in an interview with VCBeat.

However, behind the enormous industry opportunities, invisible orthodontics faces significant challenges in commercialization.

The first challenge is that clear aligners are more expensive than traditional bracket braces, resulting in a higher barrier to patient adoption.A search of current market prices for mainstream clear aligners (bracketless orthodontic appliances) reveals that traditional bracket-based orthodontic treatment costs between RMB 10,000 and 20,000, while domestically produced clear aligners are priced at RMB 20,000–30,000, and imported brands range from RMB 40,000 to 50,000.

Why Is the Cost of Clear Aligner Orthodontics So High? The Reason Lies in Its Technical Complexity.It should be noted that clear aligner orthodontics lies at the intersection of clinical dentistry, biomechanics, materials science, computer science, and intelligent manufacturing technologies, representing a field with high entry barriers.

It is precisely due to technological barriers that clear aligner therapy commands high fees. It is important to note that clear orthodontics is not the windfall profit many assume it to be, as manufacturers of clear aligners must continuously invest substantial funds in R&D to innovate membrane materials and clear aligner technologies. These factors collectively drive up the cost of clear orthodontic treatment.

For example, prior to 2018, China’s clear aligner industry was largely in a phase of following and learning from foreign technologies. Through years of dedicated R&D and continuous accumulation by domestic enterprises, the gap with international counterparts has gradually narrowed, thereby achieving import substitution for aligner materials and technologies.

Therefore, for investment institutions, betting on the clear aligner sector is driven not only by its potential market size but also by the fact that it is a technology-driven industry with a sufficiently deep moat, and Chinese-made clear aligner technologies are now competitive with foreign counterparts. For complex malocclusions specific to Asians, domestic clear aligner solutions offer superior outcomes. For instance, the Jaw Position Reconstruction Technology developed by Dr. Shen Gang’s orthodontic team uses facial morphology as the entry point for diagnostic classification and provides corresponding treatment plans, making it better suited to the facial and oral characteristics of Chinese patients.

Challenge Two: Scarcity of Professional Orthodontists.In the orthodontic industry, determining whether a patient is suitable for wearing aligners and selecting the appropriate type of aligner must be prescribed by a licensed orthodontist following a thorough clinical examination and relevant diagnostic tests. The ability of the orthodontist to make an accurate diagnosis based on the patient’s indications and to design an effective tooth movement plan is a critical component of the entire orthodontic treatment process. The clinician’s diagnosis, the expression efficiency of the aligners, and the patient’s compliance with wearing the appliances all play decisive roles in treatment outcomes.

Due to the inherent complexity of orthodontic treatment, there are exceptionally high demands for the practitioner’s professional expertise. Variations in professional proficiency and treatment philosophy can lead to vastly different orthodontic plans adopted by different clinicians, potentially resulting in markedly divergent outcomes. Therefore, the orthodontist plays a critically important role.

However, because orthodontic treatment typically spans a lengthy course of 1 to 2 years, and it takes approximately 100 completed cases for an orthodontist to achieve professional proficiency, the training period for orthodontists generally ranges from 5 to 7 years. Consequently, the supply of orthodontists remains significantly scarce relative to market demand.

As the number of patients seeking orthodontic treatment continues to rise, the clear aligner industry has experienced significant growth; however, advanced technology and access to specialized orthodontists serve as critical entry barriers for companies entering this market.

In the clear aligner industry, once technological and product advantages are established, market expansion becomes the top priority in building the business model for every market entrant. Dentists are the most critical link in the entire process, as they often directly influence the decision-making behavior of end-consumer patients.

Therefore,An overview of the industry landscape reveals that leading companies, including Invisalign, Angelalign, and Smartee, have all adopted a “To Doctor” model—a business approach centered on sales through dentists or dental medical institutions.

“The vast majority of invisible orthodontics companies are not selling products, but rather services. Because”Orthodontics is a highly specialized medical field; therefore, patients primarily place their trust in dentists, and it is this trust that leads them to choose the clear aligner brands recommended by their dentists.“An investor who has invested in domestic clear aligner companies told VCBeat that, due to the lengthy treatment duration, dentists are also very cautious when selecting clear aligner brands. ‘This is why major brands devote significant effort and funding to providing educational training for dentists and building information systems, all aimed at improving physicians’ efficiency and stickiness.’”

Furthermore, empowering physicians through technology can help alleviate the shortage of orthodontists to some extent. Taking Smartee as an example, from 2019 to early 2022, it organized more than 370 offline training sessions, with over 200,000 physician attendances; its online live-streamed classes and on-demand courses have accumulated more than 1 million total views.

Globally, the direct-to-consumer (DTC) model is on the rise. Companies such as SmileDirectClub (SDC), a U.S.-based teledentistry orthodontics company founded in 2014; Germany’s invisible orthodontics provider Align Technology; and the startup Smile Formula have all adopted this model. Its core premise is to bypass dentists, enabling patients to purchase clear aligners at a lower cost.

It is important to recognize that the direct-to-consumer (DTC) model still faces numerous challenges and remains highly controversial, even in the United States. Bypassing dentists can expose patients to significant potential harms. “While the DTC model may pose minimal risks for simple cases, it is prone to causing serious complications in more complex cases, such as root fractures. Improper self-correction can easily lead to irreversible consequences. For instance, if a building is constructed off-alignment, it can be demolished and rebuilt; however, teeth cannot be extracted and re-straightened,” stated Zhu Xianchun, Director of the Orthodontics Department at the Stomatological Hospital of Jilin University and a member of the Chinese Society of Orthodontics. He emphasized that orthodontic treatment requires careful management by experienced clinicians to ensure optimal outcomes.

Moreover, as Class II medical devices, clear aligners are subject to strict regulation under national laws. Consequently, for a considerable period, compliance requirements have essentially mandated that clear aligner brands collaborate with medical institutions. Given that each patient’s oral health status is unique, an appropriate orthodontic treatment plan can only be selected following a dentist’s examination and diagnosis. Furthermore, after beginning aligner therapy, patients are required to attend regular follow-up visits at hospitals or clinics.

It is evident that the relationship between clear aligner manufacturers and dentists is one of mutual empowerment: dentists lend their professional credibility to endorse reputable clear aligner brands, while these brands provide dentists with enhanced services and support.

“Dentists and clear aligner brands are mutually dependent. Therefore, for the domestic market, the To-Doctor model will remain the mainstream business model for a considerable period,” said the aforementioned investor.

As the invisible orthodontics market continues to expand, the industry has entered an accelerated phase of commercialization.

Recent strategic moves by leading companies reveal two key trends: first, a continued push into lower-tier markets, expanding from first-tier cities to third- and fourth-tier cities and even county-level areas; second, invisible orthodontics providers are offering more diverse and cost-effective solutions, thereby attracting more consumers with limited purchasing power.

Additionally,How to help doctors better acquire patients and serve users has also become a key focus for many brands.This is due to the increasingly fierce competition in the dental market, where customer acquisition costs for clinics and institutions are extremely high. It is reported that the current cost per patient visit for clinics and institutions approaches RMB 3,000.

To this end, many clinics and institutions seek to secure resources from clear aligner brands to supplement their own patient acquisition channels.Due toThis brand also seeks to leverage various channels for traffic diversion to help institutions/clinics acquire customers.For instance, the e-commerce model piloted by Smartee has garnered support and participation from numerous institutions and clinics. The underlying rationale is that an increasing number of young consumers now prefer to access information via mobile devices. By capitalizing on this shift in user behavior, Smartee leverages its e-commerce platform to engage younger demographics, thereby helping them locate nearby clinics and hospitals for appropriate orthodontic treatment.

According to sources from the Tmall platform, Smartee’s entry model is that of a hypermarket store, requiring a one-time annual listing fee. This fee covers collaboration with dental clinics nationwide under the contracted corporate entity. The hypermarket sells electronic vouchers for clear aligner orthodontic service packages offered by partner clinics—essentially virtual products of the clinics—and not the direct-to-consumer (DTC) model as rumored online.

“On one hand, there is the challenge of customer acquisition; on the other, the professional development of orthodontists. The continuous resolution and optimization of these two factors are driving the accelerated growth of China’s orthodontics industry,” said the aforementioned investor.

In this process, three major trends in the industry are worth noting.

First, we must maintain a sustained focus on the digitalization and technological empowerment of core processes. For instance, the penetration rate of intraoral scanners in China remains relatively low. High-precision optical impressions will effectively enhance the accuracy of subsequent aligner design and manufacturing. Furthermore, advancements in true-color intraoral scanning technology contribute to improving the precision of tooth and gingiva segmentation, a critical step in clear aligner orthodontic data processing.

Second, it is essential to prioritize synergy across the entire industry chain. The oral care industry is characterized by high vertical integration; therefore, mutual trust and collaboration between upstream and downstream players, particularly through ecosystem-wide coordination, provide significant momentum for the growth of clear aligner companies. For instance, a successful clear orthodontic case relies on accurate diagnosis by the clinician, customized design and manufacturing capabilities by the aligner manufacturer, and patient compliance with appliance wear. The professional expertise of clinicians/hospitals and manufacturers, along with the level of coordination among these three parties, plays a decisive role in treatment outcomes.

Third, attention should be paid to the trend of invisible orthodontics expanding toward sub-specialties. Currently, early orthodontic treatment for children is becoming a rapidly growing segment within the field of invisible orthodontics. According to a survey conducted by the Orthodontics Professional Committee of the Chinese Stomatological Association on more than 20,000 Chinese children and adolescents, the prevalence rates of malocclusion in the primary dentition stage, mixed dentition stage, and permanent dentition stage were 51.84%, 71.21%, and 73.97%, respectively, in 2015, with an overall prevalence rate of 67.82% across all three groups.

Given the rapid growth and development of children, characterized by active bone growth and remodeling, early orthodontic intervention can prevent, guide, and intercept the progression of malocclusion in children, thereby reducing its severity. In light of the substantial demand for pediatric oral health care, standardized diagnosis and treatment in early orthodontic intervention are particularly crucial.

Of course,The multi-billion-dollar invisible orthodontics market is still in the phase of expanding the overall pie, and every company will continue to have promising opportunities.Among them, companies that possess core technologies and can sustain innovation may gain a competitive edge in the fiercely competitive market. The number of patent applications is an important indicator of a company’s technological innovation capability. Taking Zhengya as an example, as of February 2022, it had cumulatively filed more than 530 domestic and international patents.

It is important to note that, in addition to competition among companies in terms of technical capabilities, brand value, and sales channels, empowering physicians and adhering to a patient-value-centric approach will remain the central theme driving the development of the clear aligner industry for a considerable period.