Home-Based COVID-19 Antigen Testing Fully Unleashed in China, Yet the Billion-Dollar Market Remains Up for Grabs

On Friday, the industry saw its usual major policy announcement. This time, COVID-19 antigen test kits, which have been in high demand globally, are finally set to ignite the domestic market.

On March 11, the official website of the National Health Commission released the “Notice on Issuing the Application Plan for COVID-19 Antigen Testing (Trial)” (hereinafter referred to as the “Application Plan”), along with the supporting documents “Basic Operational Procedures for COVID-19 Antigen Testing in Primary Healthcare Institutions” (hereinafter referred to as the “Operational Procedures for Primary Healthcare Institutions”) and “Basic Requirements and Procedures for Self-Testing for COVID-19 Antigen.” The “Application Plan” states that antigen testing will be introduced as a supplement to nucleic acid testing. Community residents with needs for self-testing may purchase antigen test kits through retail pharmacies, online sales platforms, and other channels for self-administered testing. This means that COVID-19 antigen rapid tests, which have gained widespread popularity globally, will be officially approved for use in China, providing a critical foundation for home-based testing.

Since the second half of 2021, the number of global COVID-19 infections has surged dramatically, making rapid and convenient COVID-19 antigen test kits nearly the most sought-after medical product. In countries such as the United States, South Korea, and Japan, these kits have been selling out almost immediately upon hitting the shelves.

Thus, as news emerged that China was poised to lift restrictions on at-home COVID-19 testing, market enthusiasm was instantly ignited.

In the secondary market, shares of listed companies related to COVID-19 testing surged, with Lanwei Medical, Cofoe Medical, Wanfu Medical, Andon Health, and Mingde Biology hitting their daily price limits. Stocks of other listed companies offering rapid testing products, such as Biotime, Orient Gene, and Hotgen Biotech, rose by more than 10%. Although Andon Health, Hotgen Biotech, and Orient Gene subsequently announced that they currently have no COVID-19 antigen test kits approved for domestic launch, the landscape of the testing market is undergoing an irreversible reshuffling.

Compared with nucleic acid testing for COVID-19, antigen testing offers advantages such as not requiring professional personnel, specialized facilities, or instruments, and providing rapid results (within 15 minutes). Although there is a slight gap in specificity and sensitivity compared to molecular testing due to methodological differences, this can be compensated for through methods such as repeated testing.

Overseas, as the COVID-19 pandemic continued to spread, molecular testing capacity became severely insufficient. Driven by the urgent need to accelerate the resumption of work and school operations, countries have been actively promoting self-test antigen kits for COVID-19. For example, in South Korea, the epidemic situation worsened significantly after the Lunar New Year holiday, with tens of thousands of new confirmed cases reported daily. In Sinchon, a popular shopping district in Seoul, self-test kits that previously had modest sales were nearly sold out or completely out of stock in many pharmacies and convenience stores. The prices of these products surged more than fourfold, reaching approximately RMB 212 at one point. In the United States, to combat the spread of the Omicron variant, the government purchased around 500 million rapid antigen tests for free distribution to the public.

In China, the only officially recognized methods for detecting the novel coronavirus were previously limited to nucleic acid testing and antibody testing. Meanwhile, COVID-19 antigen testing, which has been widely adopted overseas, was once considered incompatible with China’s “dragnet”-style screening system and unable to meet the requirements of the “dynamic zero-COVID” strategy.

Recently, COVID-19 outbreaks have recurred in many parts of China, with numerous cities frequently conducting ten rounds of mass nucleic acid testing. In this context, public health experts suggested in media interviews that China could consider a stratified testing strategy amid the complex epidemic situation. Nucleic acid testing should continue to be used for key populations, while non-close contacts could initially undergo rapid antigen testing as a quick screening measure several times. These two methods could be implemented simultaneously. “When a region’s nucleic acid testing capacity cannot immediately meet demand but rapid results are needed, antigen testing can be considered as a supplementary approach.”

Furthermore, in late January, the World Health Organization (WHO) issued a statement calling for the assurance of rapid COVID-19 antigen testing across all countries. The WHO emphasized that regulatory authorities must ensure diagnostic tests meet its specificity and sensitivity standards for various applications, including the use of specific testing methodologies. Continued coordination among States Parties is required to guarantee the availability and use of high-quality rapid antigen tests in all countries, thereby enabling an effective global response to the pandemic.

Subsequently, COVID-19 antigen testing began to be incorporated into the epidemic prevention and control system. Initially, its use was limited to specific scenarios. In late January 2022, three ministries—the Ministry of Transport, the Ministry of Foreign Affairs, and the General Administration of Customs—jointly issued the Announcement on Strengthening Remote Prevention and Control of COVID-19 among Crew Members of Internationally Voyaging Ships (hereinafter referred to as the “Announcement”), creating an opening for the inclusion of COVID-19 antigen testing in epidemic prevention guidelines. According to the Announcement, all crew members onboard must undergo SARS-CoV-2 testing within 48 hours before the ship departs from the last foreign port. It explicitly stated that if nucleic acid testing is unavailable, alternative rapid testing methods, such as antigen testing, may be used. This marked the first time that results from COVID-19 antigen tests were directly adopted by the national epidemic prevention and control system.

With the release of the “Application Plan,” the other shoe that the industry had long awaited has finally dropped, and the landscape of a hundred-billion-yuan incremental market is gradually unfolding. The “Application Plan” specifies that three categories of individuals are eligible for COVID-19 antigen testing: (1) patients visiting primary healthcare institutions who present with respiratory symptoms, fever, or other related symptoms within five days of onset; (2) individuals under isolation or observation, including those in home isolation, close contacts and secondary close contacts, inbound travelers under quarantine, and residents in locked-down and controlled areas; and (3) community residents who have a need for self-testing with antigen kits.

According to the "Implementation Plan," individuals under home quarantine are mandatory users of COVID-19 antigen testing. First, individuals under home quarantine observation, close contacts and secondary close contacts, those under quarantine after entry into the country, and residents within locked-down and controlled areas must perform one self-administered antigen test daily for the first five days of their quarantine period. Second, community residents who experience symptoms but face difficulties in seeking medical attention should self-isolate at home, avoid going out, and conduct one self-administered antigen test daily for five consecutive days. In contrast, the broader community population is classified as voluntary users of COVID-19 antigen testing; they may purchase antigen test kits on their own through channels such as retail pharmacies and online sales platforms for self-testing.

However, the "Application Plan" also clarifies that nucleic acid testing serves as the definitive basis for diagnosing SARS-CoV-2 infection. If the nucleic acid test result is positive, appropriate measures should be taken in accordance with protocols for individuals infected with SARS-CoV-2 or confirmed COVID-19 patients, regardless of whether the antigen test result is positive or negative. Conversely, if the nucleic acid test result is negative but the antigen test is positive, the individual shall be treated as a SARS-CoV-2-infected person and subjected to centralized isolation and other measures, with close monitoring and consecutive nucleic acid testing.

Notably, under China’s existing epidemic prevention and control mechanisms, most community residents have previously undergone at least one nucleic acid test for COVID-19 annually. If these residents are converted into active users of COVID-19 antigen tests, adding to the hundreds of millions of passive users each year, and given that the ex-factory unit price of domestic self-test antigen kits is approximately USD 1–1.5, the implementation of the “Application Plan” could unlock a new market worth hundreds of billions of yuan.

The heavy reliance on nucleic acid testing and antibody testing for SARS-CoV-2 in epidemic prevention and control has led to a relatively lagging development of the domestic market for SARS-CoV-2 antigen testing products. To date, only five professional-grade SARS-CoV-2 antigen test kits have been approved for market launch through the intensive emergency approval pathway. However, it is evident that the pace of product approvals has significantly accelerated around the time of the release of the “Application Plan.”

In November 2020, Wondfo Biotech’s Novel Coronavirus (2019-nCoV) Antigen Test Kit (Colloidal Gold Method) and Jinwoof Bio’s Novel Coronavirus (2019-nCoV) Antigen Test Kit (Latex Method) received marketing approval from the National Medical Products Administration (NMPA), becoming the first batch of related products in China to obtain medical device registration certificates. The following month, the Novel Coronavirus Antigen Test Kit (Fluorescent Immunochromatography Assay) developed by BGI Genomics’ subsidiary, BGI Yinuan, also obtained a medical device registration certificate.

For more than a year thereafter, although companies such as ACON Biotech, Orient Gene, and Andon Health made significant inroads with their COVID-19 antigen rapid test products in the United States, Japan, Europe, and other regions, frequently securing large orders worth hundreds of millions of dollars, no new COVID-19 antigen testing products were approved for market launch in China, where the technology occupied an awkward position within the domestic epidemic prevention and control system.

It was not until early March 2022 that Huaketai Biotechnology’s Novel Coronavirus (2019-nCoV) Antigen Test Kit (Fluorescent Immunochromatography Assay) became the fourth product available on the domestic market, quickly achieving capacity for large-scale supply. On the very day the “Application Plan” was released, Vazyme Healthcare also announced that its self-developed and manufactured Novel Coronavirus Antigen Test Kit had recently received a Medical Device Registration Certificate from the National Medical Products Administration. With this development, five antigen test kits were now available in China’s COVID-19 antigen testing market. These kits employed various technical platforms—including colloidal gold, latex, and fluorescent immunochromatography—that impose relatively simple requirements for instrumentation and operation, thereby providing accessible options for conducting rapid COVID-19 antigen testing among patients visiting primary healthcare institutions, as outlined in the “Application Plan.”

Unfortunately, based on the approval conditions, all five aforementioned COVID-19 antigen test products are professional-grade versions. According to the "Operational Procedures for Primary Healthcare Institutions," the use of such professional-grade COVID-19 antigen test kits requires sample collection by personnel who have passed biosafety training and are familiar with relevant requirements, as well as testing conducted by qualified personnel in specific environments with appropriate equipment support. These kits are not suitable for home self-testing.

However, industry insiders have stated that products that have already obtained professional-grade registration certificates have undergone clinical trials during the application process. The corresponding manufacturers are more experienced and willing to obtain the registration certificate for the self-test version of COVID-19 antigen tests in a short period. “It should only require a modification, specifically a change in the intended use, which will be faster than the initial registration. This is also a test of the manufacturers’ clinical resources.”

Although the trillion-yuan market for domestic COVID-19 antigen self-testing in China remains largely untapped, Chinese COVID-19 testing companies, serving as the global “arsenal” in the fight against the pandemic, undoubtedly possess significant late-mover advantages in entering the domestic market.

For manufacturers planning to capture the domestic market for self-test COVID-19 antigen kits, distribution channels, product quality, and production capacity are three critical dimensions that test their competitiveness.In terms of channels,The “Implementation Plan” has explicitly outlined options for retail pharmacies and online sales. VCBeat’s review of mainstream internet healthcare platforms, including JD Health, Ali Health, and Baidu Health Mall, revealed that COVID-19 nucleic acid testing kits and other diagnostic products from manufacturers such as BGI Genomics and Wondfo Biotech have long been commonplace on these platforms. Evidently, these two distribution channels are well familiar to COVID-19 testing manufacturers that have just undergone large-scale nucleic acid testing campaigns.

In terms of product quality,The quality of domestic antigen self-test products is mature, with an average sensitivity reaching 90%. These products have been operating steadily in overseas markets for over a year, and their effectiveness in epidemic prevention and control has been validated. In fact, Chinese IVD companies previously reaped substantial profits from antigen self-test products in foreign markets.

In addition to Andon Health, which gained significant traction from large U.S. government orders, other Chinese companies—including Wondfo Biotech, Orient Gene, Lepu Medical, Wantai BioPharm, and Hotgen Biotech—have also introduced relevant products into the overseas self-testing market, jointly capitalizing on this lucrative trend. Taking Wondfo Biotech, which also obtained domestic registration for COVID-19 antigen tests, as an example, its performance during the 2021 period of overseas COVID-19 antigen testing showed mixed results. In the third quarter of 2021, Wondfo Biotech reported operating revenue of RMB 651 million, a year-on-year increase of 14.91%; net profit attributable to shareholders of the parent company amounted to RMB 71.5672 million, a year-on-year decrease of 38.80%; and net profit after deducting non-recurring gains and losses stood at RMB 52.2213 million, a year-on-year decline of 55.12%. Notably, Wondfo’s overseas performance surged, with its U.S. subsidiary achieving approximately 30% year-on-year growth and its International Business Division recording around 90% year-on-year growth.

For another example, Oriental Bio, an IVD company primarily targeting overseas markets, saw a surge in its performance in 2021. The net profit attributable to shareholders of the parent company ranged from RMB 4.72 billion to RMB 5.12 billion, representing a year-on-year increase of 181.45% to 205.31%. This growth was driven by orders from the U.S. government as well as new orders from the UK’s National Institute for Health Research (NIHR). In the European market, Oriental Bio maintained stable order prices at $1 per test through its collaborative sales partnership with Siemens.

In terms of production capacity,Domestic antigen testing products have sufficient production capacity to meet supply demands. According to data released by the General Administration of Customs, China exported a total of RMB 66.893 billion worth of COVID-19 test kits overseas in 2021, with monthly exports exceeding RMB 10 billion in December 2021. This substantial export momentum is underpinned by ample production capacity. For instance, Dian Diagnostics previously announced that its current production capacity for COVID-19 antigen testing products stands at 600,000 tests per day, which is expected to increase to 1 million tests per day through facility expansion and process optimization. However, Dian Biology’s current priority is to establish overseas sales channels and systems and build brand influence abroad, with no immediate plans for domestic sales. Furthermore, according to a widely circulated online meeting summary on COVID-19 antigen testing, industry insiders indicated that leading enterprises (such as Orient Gene and Acon Biotech) have achieved a daily production capacity of over 10 million tests, mid-tier companies produce 5 million tests per day, and smaller companies can still produce hundreds of thousands of tests daily. Most of these products are manufactured in-house, with little reliance on contract manufacturing. In addition, if companies need to expand capacity, the production process for COVID-19 antigen test kits is relatively mature, and the lead time for construction and commissioning is comparatively short.

The rollout of at-home COVID-19 antigen self-testing kits marks a significant milestone in the refinement of China’s epidemic prevention and control system. It not only brings greater convenience to people’s lives during the ongoing pandemic but also opens up substantial room for revenue growth for testing companies that have strategically positioned themselves early on. As to which players will break through the intense competition to fill the void in this hundred-billion-yuan market, we shall wait and see.