China’s clear aligner treatment services market is highly concentrated, with the top two brands (Invisalign and Angelalign) accounting for an aggregate market share of +82 percent, both in terms of case shipments as well as dollar value.
On the other hand, STMN’s strategic partner ZhengLi Aligners is still battling it out to capture a sizeable foothold of the market (Straumann’s flagship brand Clear Correct still awaits green light from Chinese FDA). It’s important to remember that the regulatory approval is a prerequisite to commercial availability in Mainland China. Clear Correct brand continues to be operational in other major APAC markets including Japan, Korea, Australia and few more countries. While on one hand STMN’s commercial initiatives of entering into strategic agreements with Carestream for their intraoral scanner (as OEM) distribution in Chinese market – allowed the company to leverage on its strong market positioning and loyal userbase in the dental implants space, however the Swiss giant is yet to witness any significant success in the clear aligner space.
Meanwhile, Angelalign Technology continues to execute on its aggressive customer acquisition strategy – increasing the number of dental professionals served by +36 percent YoY. This growth comes not only from getting a bigger chunk of the overall orthodontic treatments performed, but also competing closely against Invisalign to gain a larger market share foothold.
However, higher customer acquisition rates should not be mistaken for higher marketing costs – contrastingly, the company’s net profit margins continue to improve, reaching benchmarking levels in the category. One of the KPIs that successfully enables high margin growth is Angelalign’s ability to maintain its ASP (average selling prices) per unit of aligners. In other words, as more entrants are expected to jump on the clear aligner segment train in the country, the ability to maintain ASP and NPD (new product development) will be critical factors - deciding a company’s ability to fight off the competition in the category.
While Angelalign Technology continues to focus relentlessly on new dental care providers acquisition, they have also taken steps to insulate themselves against the market risks by deploying the following commercial mechanisms, including:
The existing distributor’s relationship is that of seller - buyer and not principal - agent. Up to 13 percent of total company’s revenue can be attributed to the company’s Top #5 distributors.
The company requires full-payout upfront from its customers - despite manufacturing and delivering clear aligners in batches. There are no refunds offered for patients who drop-off treatment during the prescribed period.
In FY 2020, the R&D expenses of the company were recorded at USD 14.5 M. While in terms of % of revenue, this translated into 11.4% - leading the industry benchmark. But on the other hand, the total R&D dollar-spend was significantly lower than that of Invisalign. This may impact the company’s product development pipeline rather negatively. With only 125 strong R&D workforce and more than +100 patents, Angelalign Technology is trying to build a strong IP portfolio. These IP assets along with strong brand value will allow the company to create barriers to entry for new entrants in the space.
To find out more about Angelalign Technology’s growth story, key financials and other relevant updates, please download our Research Report here. Please note that this feature is only available to registered site members.