Align Technology: Leading the Invisible Orthodontics Revolution with Nearly $2 Billion in Annual Revenue

On March 21, Align Technology (NASDAQ: ALGN), a global leader in medical devices, announced the official opening of its Shanghai training center for “Align University.” This marks the second training center established by Align Technology in China, following the launch of its Chengdu training center in 2017. The establishment of Align Technology’s second training center in China underscores the company’s ongoing commitment to investing in clinical education.

As a dental device company with 21 years of establishment, over 6 million users (as of December 2018), annual revenue reaching nearly $2 billion in 2018, and ranked third globally, Align Technology has pioneered the new category of "invisible orthodontics." It possesses highly recognized brands in the field of orthodontics, global operational capabilities and scale, proprietary products, specialized technical expertise, and proven treatment outcomes. The company has been committed to leveraging digital workflows to fundamentally transform how dentists work and enhance patients' treatment experiences.

Throughout its development, Align Technology has spared no effort in product and technological innovation, expanding into international and regional markets, providing orthodontists with clinically evidenced solutions, and building brand equity and customer satisfaction. To date, more than 150,000 doctors worldwide have received training on the Invisalign system.

Of course, in the increasingly competitive clear aligner market, Align Technology has been engaged in head-to-head competition with traditional orthodontic companies and clear aligner startups for many years. The company has consistently pursued transformation, particularly in the Chinese market, where it has closely adapted to evolving consumer experiences and scenario-based demands in terms of both service satisfaction and channel expansion.

The Asia-Pacific region is one of Align Technology’s fastest-growing markets, with China—a country boasting a massive potential consumer base for orthodontic treatment—representing a critically important market. How is Align Technology implementing localization strategies in the Chinese market, and what are its technology and brand strategies? To answer these questions, VCBeat (WeChat ID: vcbeat) conducted an exclusive interview with Julie Tay, Senior Vice President and Managing Director of Align Technology’s Asia-Pacific region.

Julie Tay, Senior Vice President and Managing Director, Asia Pacific, Align Technology

Julie Tay currently serves as Senior Vice President and Managing Director for the Asia-Pacific region, overseeing the market strategy development and operational execution of Align Technology’s full portfolio of products and services across the Asia-Pacific. She joined Align Technology in March 2013. Ms. Tay brings over 20 years of extensive multinational management experience in the Asian region, spanning diverse sectors including consumer health, medical devices, and chemicals.

Digital technology is one of the most successful disruptive technologies in history. Whenever digital technology enters an industry, it drives transformation—thorough and complete transformation. Truly disruptive technologies not only reshape existing markets but also expand into new ones by offering greater flexibility.

In the specific context of the clear aligner orthodontics industry, there is an inherent logical inconsistency among the cost, accessibility, and quality of medical services. Resolving this "impossible triangle" of healthcare requires the introduction of new technological and model-based increments. Currently, many aspects of the orthodontics industry are undergoing a digital transformation, with a shift towards fully digital workflows. Align Technology has been a powerful driving force in this progression. Over the years, it has consistently led industry development by advancing product and technological innovation, as well as expanding manufacturing and treatment planning operations. Simultaneously, it has enhanced consumer awareness of Invisalign through more innovative marketing and engagement activities.

Within the industry, Align Technology boasts highly recognized brands in the field of orthodontics, global operational capabilities and scale, proprietary products, specialized technical expertise and treatment outcomes, as well as today’s advanced end-to-end digital workflow built upon its iTero intraoral scanners and Invisalign products.

“In addition to the aforementioned advantages, we are facilitating the transition of the orthodontic market from outdated analog technologies to fully digital solutions, a process accompanied by disruption and transformation. This will not only benefit us, but more importantly, it will greatly benefit physicians and patients alike,” said Julie Tay. She added that Align Technology will continue to expand its global footprint and strengthen its position as a leading innovator and pioneer in the clear aligner industry.

Data shows that there are currently 12 million orthodontic cases worldwide each year, which represents only a small fraction of the potential market size. Align Technology believes that 300 million people globally could achieve bright, healthy smiles through orthodontic treatment. Under the guidance of experienced clinicians, Invisalign clear aligners can be used to treat malocclusions of varying complexity.

To use Invisalign clear aligners, doctors are required to undergo training in the Invisalign system. To date, more than 150,000 dentists worldwide have received this training. The digital workflow is set to revolutionize both how dentists practice and patients’ dental care experience.

Within Align Technology’s orthodontic system, the intraoral scanner represents an advanced technology in dental digitalization. It replaces physical dental impressions, enabling online treatment planning and patient-dentist collaboration, while ensuring the accuracy of dentition restoration and the fit of aligners. The iTero Element scanner utilizes patented intraoral imaging technology, providing a versatile tool for modern restorative and orthodontic treatments. It is unmatched by other products in terms of accuracy, image quality, clinical application, and visualization. With the iTero intraoral scanner, clinicians can visualize simulated outcomes during the course of Invisalign treatment.

Align Technology firmly believes that innovation is the foundation of competitive advantage and a key driver of business growth and market adoption. “We will continue to advance R&D innovation, while harnessing the power of software, biometrics, machine learning, and 3D printing, to ensure that our products and services help our doctors and their patients achieve the smiles they have always dreamed of.”

Certainly, for Align Technology, facing competition in the orthodontics industry is also a norm. According to incomplete statistics from VCBeat, there are currently about 30 companies in the United States alone that are preparing to enter or have already entered the invisible orthodontics field, including giants such as Henry Schein, 3M, Straumann, Dentsply Sirona, and startups like Ortho Clear, Smile Direct Club, Candid, etc. The Chinese market also has outstanding companies such as Angelalign, Smartee Dental Technology, and Henghui Technology. For a giant like Align Technology, how can it ensure an advantageous position in the competition and maintain differentiation?

In an interview, Julie Tay stated that she understands doctors may try other aligner products, noting that head-to-head competition with both traditional orthodontic companies and clear aligner startups has been ongoing for many years. “Faced with numerous competitors, we have built effective competitive barriers through continuous innovation, including many new patents and trade secrets. These barriers include our more than 21 years of proven success, as well as our broad recognition and brand awareness among both consumers and professionals.”

From a purely technical standpoint, will more disruptive technological products emerge in the field of clear aligner orthodontics? Julie Tay stated, “Certain manufacturers may attempt to enter the production sector for clear aligners, but we believe that the technology behind their current products is merely at the level we achieved over a decade ago—specifically, prior to Invisalign’s launch of the G3, G4, G5, G6, and G7 treatment protocols, as well as the SmartTrack aligner material. These innovations represent significant differentiating factors for Invisalign aligners. SmartTrack material serves as one of the best examples; it is our company’s proprietary material. We believe this distinction is also evident to clinicians.”

Align Technology’s goal is to continue expanding our market leadership by bringing new innovative products and technologies to market, including best-in-class consumer and user experiences, to enhance market preference for Invisalign treatment. “Our innovation and technology enable us to help customers achieve end-to-end digital workflows, setting Align Technology apart from competitors in terms of treatment outcomes, efficiency, and patient experience.”

In 1997, founders Zia Chishti and Kelsey Wirth conceived the idea of using clear plastic aligners for orthodontic treatment. They subsequently raised several million dollars in startup capital and established Align Technology. In 1998, Invisalign received FDA approval.

Align Technology has maintained sustained development and expansion over the years, driven by several key factors. A retrospective review reveals that the positive growth of Invisalign clear aligners is attributable not to a single cause, but to the combined results of strategic investments in the following areas:

1. Product and technological innovation, including the Invisalign G Series products and our patented SmartTrack aligner material;

2. Expand into international and regional markets, with a particular focus on the Chinese market;

3. Provided orthodontists with clinically evidence-based solutions, expanding market share in the field of adolescent orthodontics;

4. With a strong brand and high consumer satisfaction, it provides solutions for clinical applications in the orthodontics market by collaborating with general dentists.

In 1999, Align Technology pioneered the Invisalign product line, creating the clear aligner market. By 2001, the company had already manufactured one million unique sets of clear aligners. Align Technology combined digital treatment planning with mass customization, employing forming engineering based on biomechanical principles, thereby sparking a revolution in the orthodontic industry.

Meanwhile, a major turning point in the development of Align Technology was the launch of the iTero intraoral scanner following its acquisition of Cadent in 2011, which also facilitated the advancement of Invisalign treatment and laid the foundation for establishing an end-to-end digital workflow.

Cadent is a leading provider of 3D digital dental scanning solutions and the manufacturer of the iTero™ and OrthoCAD® iOC™ scanners. The acquisition of Cadent has positioned Align Technology as a leader in the dental and medical device sectors with strong growth potential. Intraoral scanning is a critical component in establishing new digital technologies and workflows in dentistry, including CAD/CAM (computer-aided design/computer-aided manufacturing).

As of last December, Align Technology had helped treat more than 6 million patients worldwide through its Invisalign system, and advanced digital dentistry via its iTero intraoral scanners—eliminating physical impressions, enabling digital treatment planning, and unlocking the full potential of all types of orthodontic treatments.

The Invisalign system, grounded in orthodontic principles and biomechanical design, has been clinically proven to help dental professionals achieve desired clinical outcomes. Today, Invisalign clear aligners are the world’s leading clear orthodontic system. Align Technology has spared no effort in advancing innovative technologies, and Julie Tay highlighted the following advantages:

1. The exclusive multi-layer SmartTrack material is clinically proven to optimize tooth movement;

2. Over an eight-year period, Align Technology invested millions of dollars, tested more than 260 materials, and leveraged extensive expertise in biomechanics and materials science to develop the SmartTrack aligner material;

3. SmartTrack material is exclusively developed for the Invisalign system, providing an excellent mechanical system that facilitates the safe movement of teeth in the desired direction;

4. The combination of SmartTrack material, SmartForce features, and SmartStage technology can effectively control the direction of tooth movement;

5. Aligners made from SmartTrack material offer a better fit, greater comfort, and easier insertion and removal.

Beyond its technological expertise, Align Technology’s Invisalign aligner production line is also a globally advanced mass-customization manufacturing system. By producing highly precise custom aligners, Align Technology has become one of the world’s leading adopters of 3D printing technology. To date, we have produced over 437 million sets of custom aligners, with an average daily output of 332,000 sets.

To drive the growth of its orthodontics business and build a brand that enhances awareness of orthodontic treatment, Align Technology invests more than $200 million annually in technological innovation and consumer marketing.

Growth Has Been Accompanied by Controversy. Last Year, Rumors Abounded About the Expiration of the Legacy EX30 Patent. How Was This Addressed? Regarding Patents/Intellectual Property and Technical Expertise, Julie Tay Told Reporters: “We Hold More Than 900 Patents Worldwide, Covering a Broad Range of Technologies and Business Processes. While Some Manufacturers May Be Attempting to Produce Clear Aligners, We Believe Their Technology Merely Reflects the Level We Achieved Over a Decade Ago. The Invisalign Treatment System Is Supported by Hundreds of Valid Patents. We Are Confident That, Building on This Foundation, We Can Develop Highly Differentiated Products and Stand Out Across All Relevant Fields.”

Many innovative achievements presented in Align Technology’s subsequent updated patents have been integrated into the Invisalign system. Leveraging these innovations, the Invisalign system can now treat orthodontic cases that are more difficult and complex than ever before. Some of these innovations facilitate the management of evolving dentitions across patients of various age groups, including younger patients. Among them, the G-Series innovations enhance control over tooth movement using clear aligners, including precise control of both crowns and roots in certain complex tooth movement scenarios.

“We will continue to drive R&D innovation, while harnessing the power of software, biometrics, machine learning, and 3D printing, to ensure that our products and services help our doctors and their patients achieve their dream smiles.” Align Technology firmly believes that innovation is the foundation of competitive advantage and a key driver of business growth and market adoption.

In addition, Align Technology’s contract with SmileDirectClub has also been highly controversial. Regarding this direct-to-consumer (DTC) orthodontic model, Julie Tay offered her insights, noting that one must first understand how to define “at-home” or “DTC.”

1. DIY Orthodontics: Without physician involvement, consumers fabricate their own aligners at home; Align Technology does not support this model;

2. DTC Orthodontics (similar to the SDC model): No physical examination is conducted on patients, and the company transacts directly with them; this is not the model adopted by Align Technology;

3. DDTC Orthodontics: This refers to the traditional model, where patients receive treatment based on physical examinations and transact directly with doctors. The supplier (i.e., Align Technology) sells clear aligners to doctors rather than directly to patients.

“Align Technology is deeply concerned about the risks associated with DIY treatment, where consumers undergo self-treatment without physician involvement. As innovative institutions bring clear aligners to the mass market, and given the growth of the at-home model, we are educating the public on the benefits of orthodontic treatment while continuing to help patients using Invisalign products regain healthy, beautiful smiles,” said Julie Tay, noting that Align Technology adopts a dentist-office-based model.

Align Technology is actively expanding channels for orthodontic treatment while introducing Invisalign to more potential users, which lies at the core of its philosophy. Over the past 21 years, clear aligner technology has made significant strides. Looking ahead to the next 21 years, “we will lead the development of orthodontic treatment and the digital healthcare industry by advancing oral medical devices, delivering exceptional digital treatment design capabilities, and developing next-generation intraoral scanners.”

In terms of revenue scale, Align Technology’s global revenue exceeded $1 billion in 2016, reached $1.3 billion in 2017, and approached $2 billion in 2018. This strong performance track record and operational excellence are built upon 21 years of professional expertise, continuous technological innovation, more than 900 patents, and a user base of 6 million individuals who have undergone Invisalign treatment.

For Align Technology, China is the second-largest market after the United States. Since the Invisalign system was launched in China in 2011, its business in the country has nearly doubled every year. Currently, China is Align Technology’s fastest-growing market, with an annual growth rate of approximately 70%. With the rise of the middle class and increased public awareness of oral health, the Chinese market presents significant opportunities. Align Technology will continue to train dentists and educate consumers about the benefits of orthodontic treatment and Invisalign solutions.

Julie Tay revealed a figure to reporters: “When we opened our first office in Shanghai in 2011, we had only 13 employees. Since then, we have made substantial investments in the training and development of our China team. Today, we operate seven offices across China, with two training centers in Chengdu and Shanghai, as well as a manufacturing facility, and our workforce has grown to over 1,200 employees.”

In June 2017, Align Technology opened its Chengdu Treatment Planning and Training Center to provide treatment planning services for orthodontists in China. The China Treatment Planning Center also serves as a key training hub, enabling Align Technology to deliver professional education to clinicians in the region and showcase the company’s latest products and technological innovations.

After nearly two years, on March 21, 2019, the Align University Shanghai Training Center, equipped with state-of-the-art facilities, underscored the company’s ongoing commitment to clinical education and its strong support for Chinese physicians. As Align Technology’s primary training institution, the Align University Shanghai Training Center will serve as a hub for physician education and training, while also showcasing the company’s innovative products and technological advancements in orthodontic treatment and digital dentistry.

It has been learned that the Shanghai Training Center is equipped with advanced technological devices, including iTero intraoral scanners and state-of-the-art simulation head models. The center features three dedicated training rooms: a multi-functional training room, a ClinCheck simulation studio, and a hands-on practice room for iTero intraoral scanning and simulation head model exercises. In addition, "Align University" will offer training courses and clinical education programs, along with demonstrations of the tools and processes required for clinicians to adopt innovative technologies and treatment options in their clinical practice.

Why Establish a Local Treatment Planning and Talent Training Center in China? On one hand, the China Treatment Planning Center will provide treatment planning services for Chinese orthodontists, a service previously delivered by the Treatment Planning Technology Center located in San José, Costa Rica. Furthermore, the Treatment Planning Center will serve as a key training hub, through which Align Technology will offer training to Chinese dentists at its Chengdu facility and showcase the company’s latest products and technological innovations.

“As our business grows in China and across Asia, we must ensure that we provide doctors in this region with the products and services they need to deliver treatment plans and comprehensive care to Chinese consumers. Sharing the same time zone and language environment, along with our geographic proximity to consumers, enables our orthodontists to offer more customized solutions and technical support. For instance, the establishment of a localized design center helps mitigate the prolonged communication times between Chinese clinicians and Align Technology technicians caused by language translation barriers. Align Technology’s technicians based in Chengdu communicate directly in Chinese, eliminating the need for translation. Furthermore, operating within the same time zone enhances work efficiency.” Julie Tay believes this underscores Align Technology’s commitment to long-term development and investment in the Asia-Pacific region.

Not only that, but on November 9, 2017, the Ziyang Municipal Government and Align Technology officially signed an investment agreement. Align Technology will invest $140 million to build a manufacturing facility in Ziyang for the production of Invisalign clear aligners and iTero intraoral scanners. This move demonstrates Align Technology’s continued global growth and expansion, as well as its commitment to expanding operations in various countries to better serve dental professionals and their patients.

Align Technology is committed to providing the highest-quality products and continuously meeting customers’ service needs. To achieve these goals, we must be closer to our customers, operating in the same time zones and speaking the same languages as they do.

Of course, it is undeniable that there are significant differences between Chinese and Western people in terms of oral hygiene habits and attitudes toward oral health. In terms of public awareness of the importance of oral health, as well as the quantity and quality of dental care providers, China lags behind many developing countries. However, the Fourth National Oral Health Epidemiological Survey conducted by the National Health Commission shows that over the past decade, the rise of the middle class and consumption upgrading have significantly enhanced oral health awareness among Chinese people, especially children and the elderly.

Under the guidance of experienced doctors, Invisalign clear aligners can be used to treat dental malocclusions of varying complexity. It is believed that in the near future, having straight teeth and a confident smile will be an easily attainable dream for hundreds of millions of people.

In terms of user base, on December 19, 2018, Align Technology announced that the global number of users of the Invisalign system had exceeded 6 million, including 1.5 million adolescent users (Q4 2018 data). A teenager from China became the 6-millionth user, marking a significant milestone that reflects the growing adoption of Invisalign treatment plans among both adults and adolescents. This achievement underscores the increasing demand for Invisalign clear aligners in international markets, particularly in China.

Amid the broader backdrop of consumption upgrades and the growing convergence of online and offline channels, Align Technology is continuously launching new products and expanding its distribution channels. Beyond refining its technology, the company is also introducing new business model variables to lock in a larger consumer base and deliver more precise services.

For the adolescent demographic, in 2017, we launched Invisalign aligners with mandibular advancement functionality in China. Invisalign aligners with mandibular advancement are the first orthodontic solution designed for growing adolescent patients with Class II malocclusion. This solution integrates the advantages of clear aligner systems, enabling correction of dental alignment while promoting forward positioning of the mandible. Invisalign aligners with mandibular advancement have been used to treat over 15,000 adolescent patients worldwide, with China representing the largest market globally.

Since 2001, more than 1.5 million adolescent patients aged 19 or younger worldwide have undergone treatment with Invisalign clear aligners. Invisalign is a highly recognized brand in the field of orthodontics and is widely popular among teenagers in the United States. Globally, there are 12 million orthodontic cases annually, of which 8 million are suitable for Invisalign treatment. Approximately 75% of these patients are adolescents. As the fastest-growing user segment in the orthodontic market, adolescents indicate significant future growth potential.

Furthermore, in terms of localized channel expansion, in September 2018, Align Technology and Alibaba Health announced the joint establishment of a new online platform to promote oral health education and enhance the O2O experience.

The platform will provide information on oral health, expert videos, and an interactive Q&A experience. In addition to educating users about healthy oral habits, such as the importance of regular dental check-ups, the platform will offer consumers a convenient channel to book digital 3D oral screening services with qualified dentists registered within the Ali Health system. This will deliver a rich O2O (Online-to-Offline) experience, allowing consumers to schedule appointments online at their convenience and visit their chosen dentist’s clinic at a location of their preference.

Regarding future development in the Chinese market, Julie Tay firmly believes that digital workflows will fundamentally transform how dentists work and patients experience treatment. As Chinese dentists increasingly recognize the advantages of end-to-end digitalization and implement more highly digitized treatment strategies, the Chinese dental market holds immense potential yet to be tapped.