JD Health and Polaris Investment Forge Comprehensive Strategic Partnership to Digitize the Entire Oral Healthcare Industry Chain
At the end of 2020, the oral care sector witnessed new changes once again.
Mid-June,PineBridge Investments and JD Health Hold Signing Ceremony in Beijing, Announcing Strategic Cooperation Across the Entire Dental Industry Chain, to support the informatization and intelligent development of the dental industry, empower dentists with digital capabilities, and promote equitable access to high-quality medical resources.
On one side is Songbo Investment, an investment and operation platform focused on the entire oral care industry chain.As an “alternative” investor in the dental sector, it has not only invested in many leading enterprises across niche upstream segments but also acquired or invested in multiple dental hospitals and dental chain operators downstream. Furthermore, it has penetrated the midstream segment of the dental industry, which is characterized by slow development and delayed returns, thereby establishing a deep and sustained presence across the entire dental industry value chain.On one side is JD Health, a leading internet healthcare enterprise, with a comprehensive “Internet + Healthcare” layout, its products and services cover the entire industrial chain of pharmaceutical and health physical goods, the full medical process, all health scenarios, and the entire user lifecycle.
(JD Health & Songbo Investment Strategic Cooperation Signing Ceremony for the Full Dental Industry Chain)
This collaboration differs from traditional models by not merely leveraging the internet to help dental institutions reach more patients; instead, it combines Songbo Investment’s industrial resource advantages across the entire dental industry chain with JD Health’s digital platform.Both parties leverage internet technology to support healthcare providers, such as dentists, across multiple dimensions of the upstream, midstream, and downstream sectors, ultimately establishing a closed-loop ecosystem for the full dental industry chain based on the “Internet + Supply Chain + Services” model.
As is well known,The oral healthcare industry has been experiencing rapid growth in recent years.According to the "2020 White Paper on Dental Healthcare" by VCBeat Research Institute, the market size of China's dental healthcare services industry reached approximately RMB 140 billion in 2018, representing a year-on-year growth of about 24%. This growth is driven by the advent of population aging in China and the enhancement of residents' health awareness and purchasing power. Against this backdrop, demand for dental healthcare services is expected to continue rising.Following this trend, internet giants such as Alibaba Health and Meituan have successively entered this sector.。
However, it should not be overlooked that, at the supply side level,The dental industry currently faces pain points such as a shortage of medical professionals and low levels of digitalization.In terms of medical talent, data from iiMedia Research Center shows that the United States has the highest density of dentists at 63 per 100,000 people, followed by Australia with 57 per 100,000 people, while China’s dentist density is only 16.7 per 100,000 people. Regarding informatization, research findings from VCBeat indicate that the overall level of digitalization in China’s dental industry still lags behind that of developed countries in Europe and the United States.
(Image source: VCBeat "2020 Oral Healthcare White Paper")
Evidently, the oral care industry appears attractive on the surface, yet it is plagued by numerous pain points. In the face of these challenges that constrain the rapid development of China’s oral care sector, what strategic considerations have driven Songbo Investment to partner with JD Health? How do they plan to address these industry pain points? And once these obstacles are overcome, how will the oral care industry evolve?
To address these questions, we attempt to examine the digital advancements in the dental industry and analyze the strategic investment logic of Shuangbai Investment and JD Health in the healthcare sector, thereby gaining insights into the potential future evolution of the dental industry.
Small Mouth, Big Health.
In the consumer healthcare sector,The oral care sector has consistently been a high-growth niche market.According to the “2020 White Paper on Dental Healthcare” by VCBeat, the market size of dental healthcare services has been growing at an average annual rate of approximately 24%. On the other hand, due to the fragmented and highly segmented nature of the dental industry, there is largely no unified standard for business models across the upstream, midstream, and downstream sectors, which also makesThe Oral Care Sector Has Become One of the Most Challenging Areas in the Entire Medical and Health Industry。
How to Address the Pain Points in the Oral Care Industry?Sycamore Investment, known for its expertise in industrial development, has made extensive investments and built a strong presence across the entire dental industry chain. By fully coordinating multi-party resources from the upstream, midstream, and downstream sectors to achieve comprehensive integration, it ensures that all stakeholders across the industry chain benefit from a holistic perspective.This collaboration between Songbo Investment and JD Health adopts a whole-industry-chain perspective, tightly integrating Songbo Investment’s offline professional service capabilities with JD Health’s online digital capabilities. By empowering stakeholders across the upstream, midstream, and downstream segments, the partnership aims to establish a closed-loop online-to-offline (O2O) business ecosystem for the dental industry, thereby enhancing overall industry efficiency.
However, it is important to recognize that delving into the entire oral care industry chain is no simple feat for market entrants. ThatWhat Gives Shunwei Capital and JD Health Their Confidence?
First,Unlike other investment firms, Songbo Investment, as an investment and operational platform deeply rooted in the dental industry, not only provides financial support to high-quality enterprises in the dental sector but also actively participates directly in the market as part of its strategic choices., deeply engaging in the development of the dental discipline and industry, providing a long-term and stable development platform for talent and enterprises in the dental sector, and committed to addressing pain points across the entire upstream, midstream, and downstream industrial chain, with a particular focus on technological R&D, medical education, and information technology within the dental industry.
To elaborate, in# R&D in Science and Technology, Songbai Investment boasts leading management teams and R&D capabilities in invisible orthodontics, dental implants, bone regeneration, imaging, intraoral scanning, and restorative dentistry. Its portfolio includes controlling stakes in Angelalign, Purgo Biologics, and Neoss Implant Systems, as well as a minority investment in Carestream Dental. Strategic partners include Germany’s BEGO and South Korea’s Medit.
InMedical Education Sector, Songbai Holdings invests in and holds equity stakes in large-scale dental medical institutions and chain clinics, introduces global educational resources, establishes a fully equipped dental training and education center, and provides high-quality dental medical services to patients through its network of dental medical institutions distributed across China.
InInformation Technology Sector, Songbai has established its own information technology team to empower the vast network of dental distributors and healthcare service providers across China, thereby enhancing its service capabilities for both dentists and manufacturers. Through investments in Songbai Dental and Xinhua Guang Oral Care, Songbai is driving the informatization-driven industrial upgrade of the midstream dental sector.
Furthermore,As China's leading online healthcare platform, JD Health's core businesses include retail pharmacy operations and online healthcare services., committed to providing users with accessible, convenient, high-quality, and affordable healthcare products and services. Furthermore, JD HealthIt also features a nationwide distribution infrastructure network and an omnichannel layout integrating online and offline channels.. As of the first half of 2020, JD Health’s omnichannel network covered more than 200 cities, meeting users’ needs for acute medication by providing same-day delivery, next-day delivery, 30-minute delivery, and 7/24 rapid delivery services.
In other words, by leveraging Symbiosis Investment’s industrial resource advantages across the entire dental care value chain and combining them with JD Health’s omni-channel layout strengths in healthcare, both parties can deeply empower the dental industry through internet technology from multiple dimensions spanning the upstream, midstream, and downstream sectors. SuchThe benefits are twofold: on one hand, digital transformation has upgraded the previously cumbersome and traditional processes and segments of the oral care industry; on the other hand, with improved efficiency, dentists can devote more energy to extending essential oral healthcare services downward and grounding their practice firmly in medical science itself.
It is evident that, leveraging the profound expertise of Perennial Investment and JD Health in their respective fields, their collaboration—viewed from the perspective of the entire dental industry chain—is bound to generate synergistic value where 1+1>2.
Where Lies the Crux of Development in the Dental Industry?
From the supply side,A shortage of talent is the bottleneck constraining the development of the dental industry.It is important to recognize that training a competent dentist often takes more than a decade, resulting in a talent pipeline that cannot keep pace with market demand—this is the core reason for the current severe supply-demand imbalance. Since short-term training initiatives cannot “quench immediate thirst with distant water,” solutions must focus on enhancing dentists’ efficiency and expanding their service radius.
Driven by a shared consensus to strengthen the foundational infrastructure of the oral care industry, Shuangbai Investment and JD Health haveEmpowering Dentists Through Digitalizationthe approach, the plan includesBuilding an Integrated Online-to-Offline Digital and Intelligent B2B Supply Chain for Dental Care, providing one-stop services to dentists and medical institutions to enhance distribution and procurement efficiency;Facilitate upstream manufacturers, dentists, and dental institutions to jointly conduct online patient education and physician training, empowering physicians and healthcare institutions to complete the closed-loop of offline medical services;Expand patients' online access to high-quality physicians and medical institutions, making healthcare service information more transparent and accessible to enhance the convenience of seeking medical care; exploring new models for home-based oral health management and enabling multi-scenario doctor-patient communication.
According to the plan, both parties aim to expand the coverage of high-quality medical resources by digitally empowering dentists, thereby enabling residents to access more accessible, convenient, and affordable healthcare services. This is because dentists play an extremely critical role at every stage of the dental industry chain. BecauseOnly by dentists collaborating with upstream and downstream partners to jointly provide patient education can patients understand which services and medical institutions to choose, thereby truly promoting industry development.
Based on this,Continuing education for dentists has also been given significant importance.Through the collaboration platform established by Shubo Investment and JD Health, this partnership enables the integration of dispersed dental practitioners, fostering their continuous professional development through exchange and learning with peers and industry stakeholders.As the overall competence of dentists continues to improve, patients will enjoy increasingly better experiences, thereby fostering greater trust in dental healthcare services. This dynamic places the entire market in a virtuous cycle of sustained upward development.
According to the "2020 White Paper on Oral Healthcare" released by VCBeat, China's total population increased from 1.34 billion in 2010 to 1.39 billion in 2017. With this growth in the population base, the number of individuals requiring oral healthcare services rose to 694 million. Overall, approximately 50% of Chinese residents suffer from various oral diseases, keeping demand consistently high. However, due to varying degrees of disease severity, most patients have not paid sufficient attention to their conditions. A significant portion of the population still does not seek diagnosis or treatment for oral diseases due to various reasons.The oral healthcare consumer market still has significant room for growth.
During this process, the entire industry is also ushering in a significant window of opportunity brought by the digital wave. How to seize the first-mover advantage in the digitalization of the dental industry,Three Notable Trends Across the Upstream, Midstream, and Downstream of the Oral Care Industry。
First, at the upstream level, the continuous strengthening of digital infrastructure will bring new growth points to the dental industry.For instance, intraoral scanners are transforming the workflow of dentists. Currently, a significant number of dental laboratories and orthodontic manufacturers are substantially shifting their data sources from traditional physical bite impressions to digital models generated by intraoral scanning. This series of changes will spur a wave of transformative developments across the industry in the coming years, driven by the continuous improvement of digital infrastructure.
Second, in the midstream segment, digitalization will upgrade the dental distribution industry.First, service upgrades have been achieved by combining online procurement of consumables with offline after-sales training, a model that has been successfully validated to enhance efficiency and reduce costs for healthcare institutions in their procurement and usage processes. Second, management upgrades have unlocked greater personnel productivity. The emergence of industry builders, represented by Shuimu Investment, is accelerating the evolution of the entire dental distribution sector toward higher efficiency and an improved user experience.
Take Songbai Dental, a nationwide distributor under Songbai Investment, as an example. Its IT team has established a product database and digital sales tools that enable sales representatives to become proficient with the extensive range of dental equipment and consumables within just two to three months. Furthermore, by leveraging informatization, the company achieves integration of information, logistics, and capital flows throughout the distribution process, thereby driving operations with data and addressing numerous pain points in business management.
Third, at the downstream level, internet healthcare will introduce new model variables.In August this year, JD Health established an online dental care center. Currently, a certain number of dentists have registered on the platform to provide consultations to patients. As internet healthcare companies such as JD Health and AliHealth deepen their strategic layouts, they will offer downstream medical institutions and dentists more high-quality online platform options. By partnering with leading internet healthcare platforms, Shubai Investment will also explore diverse scenarios for doctor-patient communication, contributing to the popularization and accessibility of dental care as the industry scales up.
In summary, amidst the digital transformation of dentistry, leveraging digital technologies to empower dentists—thereby enhancing their work efficiency and improving patient access and service delivery—and facilitating ecosystem closure across the entire dental industry chain will present significant opportunities over the long term, particularly in addressing pain points such as the prolonged training cycle for dentists and the supply-demand imbalance in China.
It is important to note that, unlike other sectors, the dental industry—a niche within healthcare—is a “slow-growth” business. It requires meticulous cultivation by market entrants to eventually grow into “towering trees” over time.