WeDoctor Beilian Assisted Reproductive Research Institute Releases Industry Report: A Trillion-Yuan Market Facing New Variables?

The assisted reproductive technology (ART) industry is a market with a scale of hundreds of billions of yuan. Recently, WeDoctor Beilian will jointly release an industry report on assisted reproduction with VCBeat Eggshell Research Institute, outlining the evolutionary logic and transformation trajectory of the industry's development. The report will primarily include, but not be limited to, the following dimensions:

Statistics indicate that infertility among couples in China is trending toward a younger demographic, with the incidence rate rising annually to 12.5%–15%, thereby driving continuous expansion of the assisted reproductive technology (ART) market. Data show that the number of patients exceeds 60 million, with female factors accounting for 50%, male factors for 40%, and combined couple factors for 10%. Assisted reproductive technology has become a critical approach for treating infertility in developed countries.

Meanwhile, in January 2019, the National Bureau of Statistics announced that the number of births in China for the full year of 2018 was 15.23 million, with a birth rate of 10.94 per thousand, representing a decrease of 2 million compared to 2017. A review of the data shows that in 2017, China’s annual number of births was 17.23 million, with a birth rate of 12.43 per thousand; in 2016, the number of births reached 17.86 million, with a birth rate of 12.95 per thousand. Following the implementation of the “universal two-child” policy, the number of newborns in China failed to show the anticipated growth for three consecutive years, indicating that the demographic dividend from second births has been fully exhausted.

Does the decline in newborns indicate that China has entered an era of low fertility? Amid changes in the current demographic situation and population structure, the maternal and infant industry will usher in a new development model.

There are multifaceted reasons why women of childbearing age or families in their prime reproductive years in modern society choose to forgo having children; however, these ultimately boil down to objective factors such as economic considerations, shifting mindsets, and infertility. Given current fertility rates and accounting for the full impact of the released demographic dividend from the "two-child policy," China's annual number of newborns is projected to fall below 10 million within the next decade. Although the number of newborns is declining, the improvement in demand quality driven by consumption upgrading will lead to polarization in the assisted reproductive technology (ART) market: the mid-to-high-end segment will remain robust, while the grassroots market will face increasingly intense competition.

Assisted reproduction is the abbreviation for human assisted reproductive technology (ART), which refers to techniques that employ medical interventions to help infertile couples achieve pregnancy. Based on the level of technological advancement, it is primarily categorized into: artificial insemination, oocyte/gamete transfer techniques, in vitro fertilization-embryo transfer (IVF-ET), and other derivative technologies, among which:

First-Generation In Vitro Fertilization (IVF): In Vitro Fertilization and Embryo Transfer (IVF-ET). IVF-ET is a technique in which oocytes and sperm are retrieved from couples suffering from infertility, fertilized and cultured into embryos in an in vitro system, and then transferred into the uterine cavity to achieve pregnancy. In 1978, Dr. Robert G. Edwards, a British scientist, completed the first successful in vitro fertilization (IVF) procedure by fertilizing an egg outside the human body, resulting in the birth of Louise Brown, the world’s first “test-tube baby.” This milestone marked the entry of human assisted reproductive technology into a new era.

China’s first test-tube baby, nurtured by the renowned Chinese obstetrician and gynecologist Professor Zhang Lizhu, was born at the Third Hospital of Beijing Medical University on March 10, 1988.

Second-Generation In Vitro Fertilization: Intracytoplasmic Sperm Injection (ICSI). Intracytoplasmic Sperm Injection (ICSI) technology was developed based on methods such as microdroplet in vitro fertilization, partial zona pellucida dissection, and subzonal insemination, which were employed to address fertilization failure caused by insufficient sperm count or functional abnormalities in males. In 1992, Dr. Palermo’s team in Belgium first applied ICSI, helping patients achieve clinical pregnancy.

This technology addresses the issue of conventional fertilization failure, improves the success rate of IVF, and represents a milestone in the treatment of male infertility. The techniques involved in the ICSI process, including controlled ovarian stimulation with medications, embryo culture, and embryo transfer, are the same as those used in IVF-ET. China’s first test-tube baby conceived through ICSI was born in 1996 at the Center for Reproductive Medicine, The First Affiliated Hospital of Sun Yat-sen University.

Third-Generation IVF: Preimplantation Genetic Testing (PGS/PGD). Preimplantation Genetic Screening (PGS) is used to detect chromosomal numerical and structural abnormalities in early embryos prior to implantation. It primarily assesses the structure and number of the 23 pairs of chromosomes in the embryo, identifying genetic material abnormalities through comparative analysis.

Preimplantation Genetic Diagnosis (PGD) is a method that involves analyzing genetic material from embryos to detect abnormalities, selecting healthy embryos for transfer, and preventing the transmission of genetic disorders.

In 1990, Alan Handyside in the United Kingdom successfully performed the world’s first preimplantation genetic diagnosis (PGD) resulting in the birth of a healthy infant. By employing fluorescence in situ hybridization (FISH), a genetic analysis technique, and leveraging the known sequence of the cystic fibrosis (CF) mutation gene, he identified embryos carrying the mutated sequence and selected those free of the mutation for implantation into the woman’s uterus. In 1999, China completed its first case of preimplantation genetic diagnosis using FISH technology at the First Affiliated Hospital of Sun Yat-sen University.

PGS enables the selection of chromosomally normal embryos for transfer, thereby preventing miscarriages and the birth of infants with congenital anomalies caused by chromosomal abnormalities, while improving success rates. It is suitable for older women with adequate ovarian reserve, as well as infertile couples experiencing recurrent implantation failure, recurrent miscarriage, or chromosomal abnormalities.

PGD can diagnose diseases caused by single-gene defects, such as hemophilia and thalassemia. It is suitable for couples who are concerned about carrying genetic disorders or passing on chromosomal abnormalities to their offspring.

Fourth-Generation IVF: Also known as ooplasmic transfer, this technique involves replacing the ooplasm of oocytes from women with ovarian dysfunction with healthy ooplasm from a donor female to enhance oocyte viability. The reconstructed oocytes are then fertilized in vitro with the husband’s sperm, and the resulting embryos are transferred into the patient’s uterus. As ooplasmic transfer does not involve chromosomal manipulation, it fully preserves the genetic characteristics of both partners.

Technically, in vitro fertilization (IVF) and embryo transfer technology has advanced to the third generation, which is mature and offers the highest pregnancy rates. The fourth generation of IVF is expected to significantly improve egg quality issues and currently represents the cutting-edge technology. The first generation is primarily used to address female infertility, while the second generation is mainly employed to tackle male infertility. The third generation of IVF is primarily utilized for optimal eugenics and healthy reproduction. Currently, the overall international pregnancy rate for IVF ranges between 40% and 60%.

China sees approximately 16 million newborns annually, with an infertility rate of 12.5%–15%, resulting in a large patient population.

VCBeat has learned that CITIC-Xiangya Hospital, the assisted reproductive technology (ART) center in China with the highest annual number of treatment cycles, performed 49,000 treatment cycles in 2018. The clinical pregnancy rate for fresh embryo transfers reached 63%, while the pregnancy rate for standardized patients reached 74%.

Compared with 2017, the hospital conducted 44,596 assisted reproductive technology (ART) cycles; despite this substantial volume, the average clinical pregnancy rate for in vitro fertilization (IVF) remained as high as 62.4% (January–November).

Furthermore, in 2017, the hospital performed 3,728 PGD/PGS cycles, conducted 9,485 genetic diagnostic tests, and carried out 54,215 chromosomal analyses, all reaching record highs. This once again demonstrates the hospital’s solid leading position and strong capabilities within the industry.

As China’s largest assisted reproductive technology (ART) institution, CITIC-Xiangya conducted over 41,000 ART treatment cycles in 2016. According to data published in the journal Nature, this figure is equivalent to one-quarter of the annual treatment volume across the entire United States. The number of preimplantation genetic tests increased by 277% within two years.

Driven by technological advancements, the assisted reproductive technology (ART) industry has developed a complete supply chain. The upstream segment primarily consists of fertility medications, medical devices, and consumables; the midstream segment comprises distributors at various levels and pharmaceutical wholesalers; and the downstream segment connects with patients through general hospitals and specialized maternal and child reproductive healthcare institutions.

In the assisted reproductive technology (ART) sector, the primary opportunities for pharmaceuticals, medical devices, and consumables lie in the domestic substitution of imported products. Opportunities for private capital include establishing, co-founding, or acquiring private ART medical institutions, as well as leveraging internet platforms to provide peripheral services to the ART industry. For instance, WeDoctor has applied its internet big data capabilities to AI development; its “Ruiyi AI” project, developed in collaboration with Zhejiang University, has set a benchmark demonstration within the industry.

Zhejiang University’s Ruiyi Artificial Intelligence Research Center will, in China’s artificial intelligenceScienceUnder the leadership of Professor Wu Zhaohui, the team focuses on researching key common technologies in medical artificial intelligence (AI) based on clinical big data, imaging, and genomics. It prioritizes building a medical AI service platform, fostering third-party medical AI service enterprises, establishing industry standards and norms, and developing a higher education system for medical AI.

New AI technologies in medicine will be deeply applied in clinical auxiliary diagnosis and treatment, precise doctor-patient matching, and personal autonomous health management. WeDoctor’s real-name authenticated user base has exceeded 165 million, connecting over 2,400 key hospitals across China and 260,000 experts. WeDoctor Internet Hospital has been deeply integrated into 12,000 primary healthcare institutions throughout the country. WeDoctor aims to become one of the many application scenarios for Ruiyi, popularizing Zhejiang University Ruiyi’s achievements across 1 million primary healthcare institutions in China, while also helping WeDoctor advance from a registration platform and internet hospital to the era of Medical AI 3.0.

The assisted reproductive technology (ART) market has garnered significant attention not only due to its substantial market potential but also because of its high gross profit margins. In vitro fertilization (IVF), the segment with the highest gross margin in the ART field, has an average cost of approximately RMB 50,000, which is considered a reasonable figure.

Furthermore, assisted reproductive technology (ART) services entail relatively low costs, with gross profit margins exceeding 90% and net profit margins surpassing 50%. This sector demonstrates robust growth and strong profitability, making it highly attractive amid the current environment of tightening profits across pharmaceutical companies.

However, the assisted reproductive technology (ART) industry has a relatively short development history and is highly medical in nature, with significant technical barriers. As a result, the industry chain remains largely closed-loop. Even the currently popular “Internet + ART Medical Consortium” model requires benchmark hospitals to serve as the foundation for implementation.

According to incomplete statistics from the European Society of Human Reproduction and Embryology, more than 8 million IVF cycles were performed worldwide in 2018. Among these, approximately 1.5 million cycles were contributed by 451 hospitals in mainland China that held reproductive medicine licenses issued by health commissions at various levels.

With consumption upgrading, patients with certain financial capabilities are willing to choose overseas medical treatment, which has given rise to popular assisted reproductive technology destinations such as the United States, Singapore, Thailand, Russia, Japan, and Hong Kong, China.

Compared with domestic tertiary hospitals, the net profit margin for surgeries in U.S. hospitals is approximately 40%, due to the relatively higher costs of physicians and medical staff.

For patients seeking IVF treatment abroad, in addition to considering technical expertise, physician-designed protocols, and laboratory standards, primary factors include the availability of services such as sex selection, genetic testing, surrogacy, and egg donation under local regulations, as well as differences in hospital environments and service quality. Certain regions have more open policies, such as Southern California in the United States and parts of Russia. PGS technology has been approved for use in the United States, the United Kingdom, Australia, China, Malaysia, and Thailand.

To address diminished female fertility caused by oocyte aging and advanced maternal age, Japan’s in vitro fertilization (IVF) technology has rapidly emerged and continues to innovate. According to statistics from the Japanese IVF Society, there are currently over 600 IVF treatment facilities nationwide in Japan, ranking first in the world. Consequently, an increasing number of women of advanced reproductive age are opting to undergo IVF treatment in Japan.

In contrast, Thailand’s policies are more liberal, with less stringent requirements for third-generation IVF. To achieve eugenic outcomes, patients are permitted to directly opt for third-generation in vitro fertilization technology, thereby saving time costs.

Domestic policies remain tight in the short term; overseas IVF services carry low risk and are easy to standardize, but will face increasing competition in the future.

With the continuous advancement and iteration of assisted reproductive technology (ART), the eligible patient population has expanded, treatment success rates have improved, and the number of in vitro fertilization (IVF) cycles has increased. Driven by these favorable factors, societal demand for ART is expected to continue rising, further expanding the potential market size.

Currently, the approval of new licenses for assisted reproductive technology (ART) is influenced by national policies, which has, to some extent, slowed the entry of unlicensed companies into the ART sector while still preserving certain opportunities.

As of the end of 2016, there were 451 approved and operational reproductive centers across China. Excluding those established by public hospitals, 41 reproductive centers were either affiliated with private hospitals or funded by private capital. The uneven quality within the industry presents potential merger and acquisition opportunities for the company in the future.

In short, the current development of public-sector-dominated assisted reproductive technology (ART) institutions fails to meet the growing market demand. With increasingly frequent collaborations between private ART hospitals and capital investors, downstream channels in the industry are gradually opening up, presenting private ART institutions with significant opportunities for robust growth.

Despite the striking data, the proportion of infertile families in China is rising. Patients often view in vitro fertilization (IVF) as a last-resort solution, facing significant psychological stress and high treatment costs. Furthermore, IVF treatments are predominantly concentrated within the public hospital system, characterized by prolonged treatment cycles and a lack of premium VIP services. Additionally, there is a wide variety of potential complications associated with IVF procedures, along with a high incidence rate.

Meanwhile, due to significant individual variations, the success rate of embryo transfer is relatively low, and the live birth rate is even lower. There is a need to develop insurance-specific products to mitigate patients’ medical risks. These unresolved issues await solutions from emerging enterprises.

No single treatment, whether involving pills or scalpels, can resolve all medical issues. Meticulous and thorough communication regarding the patient’s condition, detailed and comprehensive treatment planning, compassionate humanistic care, and a high level of trust between physicians and patients are all essential prerequisites for achieving satisfactory therapeutic outcomes. This is particularly true for assisted reproductive technology (ART) treatments, which involve prolonged cycles and multiple stages, each of which significantly influences the overall success rate.

Therefore, in recent years, institutions that have focused on creating a comfortable medical experience by offering services such as high-end comfort care, international genetic testing, scientific mind-body wellness, exclusive reproductive health management, VIP-accompanied global consultations, and customized reproductive insurance have achieved significant growth.

The above merely presents the dimensions of the report, offering a glimpse into the evolving landscape of the assisted reproductive technology (ART) industry. The full report and detailed data will be released after the Lunar New Year holiday. All data and analysis are subject to the final report. Stay tuned.