Challenging the Status Quo
The global clear aligner industry has witnessed a series of new emerging tech companies entering the space in recent years. So, what’s common among all of these new tech entrants? The answer is rather obvious - almost all of these breakthrough innovations are intended to reduce the duration of the treatment time, without compromising the quality of the clinical outcome. Not just that, these innovative technologies also succeed in improving the treatment attractiveness and reducing the barriers to entry, especially for Gen Z consumers.
Interestingly enough, many of these brands or SaaS-based ventures have either been acquired, or alternatively leading aligner manufacturer(s) continue to be an equity investor or strategic partner in the former – realizing the strong business synergies:
An example of such technologies is the mechanical stimulation systems category, which is led by brands like AcceleDent and Propel Orthodontics, the latter of which was acquired by XRAY for USD 130 million in an all-cash transaction.
Paris-based tele dentistry startup, Dental Monitoring™ invited equity investments from global implant leader Straumann Group, yet the SaaS business with its portfolio of proprietary AI based tech continues to work with leading competitor clear aligner brands globally.
Can ClearX disrupt the global clear aligner category?
insightsZ believes that another brand that may potentially disrupt the global clear aligner category is K Line Europe’s ClearX. The Germany-based clear aligner brand claims to have the least carbon footprint - improving the brand’s attractiveness especially among millennial and Gen Z consumer demographic, both of which contribute as the largest customer segment for clear aligner treatment therapy.
insightsZ predicts that over the next 5 years, the global clear aligner category would ride the wave of process innovation. That is, we estimate the unit price of clear aligners to decline, the total volume to increase in the range of 20-25% CAGR over the next 60 months and the unit economics to become less profitable during the same period.
insightsZ summarizes how the global clear aligner category continues to undergo transformation:
The global clear aligner industry is still in its early stage and demonstrates a relatively high market share stability, even though we continue to witness many new players entering the category. This obviously translates into improved patient access, yet coupled with margin compression and ASP decline. Next 5 years, we project the category to undergo consolidation and brands operating with negative incomes slipping into obsolescence. The overall combined output of the global clear aligner industry will continue on the uphill trend.
Global clear aligner brands are increasingly making claims about how fewer trays are needed to achieve the same clinical outcome, as with another competitor brand. Refinement rates and aligner breakage frequencies continue to decline with improvements in polymer technology, as leading brands continue to battle it out for IP and licensing in the space.
In the last 5 years, leading clear aligner brands have responded by reducing the waiting period till aligners can be shipped to the dental office, enabling patients to start with their treatment journey earlier. FY 17 average time between order placement and clear aligner delivery was as long as 3-4 weeks. However, it has slipped to 8-10 days for leading US clear aligner brands in FY 22. Leading DSOs have even responded by integrating backwards – enabling patients to get started with aligner therapy in as little as 3-4 days.
insightsZ deep dives into the patient journey to identify which factors can be leveraged to realize quick-wins, concerning length of the treatment journey. After tele dentistry and mechanical stimulation systems, we predict that any endeavors at improving the patient engagement and motivation will drive the biggest impact on the quality-based metrics & KPIs of the overall clear aligner treatment journey.
Improving Patient Engagement: A value proposition for Millennials and Gen Z
We have covered in one of our recent articles about how Germany-based ClearX focusses on the same set of clear aligner trays to be reprocessed and used for further corrections – effectively reducing the total number of trays required to achieve the same treatment outcome, while also reducing the environmental footprint. In other words, the same set of aligner trays can be worn for +3 weeks as the trays occupy subsequent shapes and forms – greatly reducing the plastic burden of clear aligner treatments.
ClearX Booster device has a similar brand promise wherein it makes the treatment journey more personal with an IKEA-DIY effect, and yet ‘delights’ the consumer with the feel-good effect of sustainability. The IKEA effect is defined as increased valuation that people have for self-assembled products compared to objectively similar products which they did not assemble or make.
In terms of clear aligner treatments, the booster device is clearly a representation of the IKEA effect. But even more importantly, the patient delight multiplies post completion of a treatment journey, and the achievement of clinical outcome. This obviously drives higher patient engagement, better compliance and more brand loyalty as patients acquire the role of brand ambassador – only further extending their role as do-it-yourselfers who were actively involved in designing their treatment therapy.
Gen Z cares about sustainability more than anyone else – and is starting to make others feel the same
Source: World Economic Forum
Millennials and Gen Z collectively demonstrate highest concern for the planet by choosing brands that identify sustainability as one of their core values. In fact, up to 75 percent of GenZ prefer to buy sustainably rather than to go for brand names, according to a survey conducted by First Insight and the Baker Retailing Center at the Wharton School of the University of Pennsylvania.
ClearX’s brand promise of minimum ecological footprint and IKEA effect uniquely positions it, with the potential to become the preferred brand with millennials and Gen Z consumers.