In Q1 2021 SDC opened its first two SmileShop locations in Mexico City - marking the company’s entry in LATAM as it pursues the massive market opportunity outside its home territory.
Fast forward six months, France becomes the third country in EU (and #14 country worldwide) where SDC is trying to make in-roads and establish its DTC model. This aggressive growth strategy execution comes at the expense of high cash burnout rates. SDC is already present in Germany and Spain where their brand building initiatives have failed to generate the expected returns, and SDC is now looking at relaunching the brand in both countries. In other words, the company’s marketing expenses as well as SG&A expenses were significantly higher – both sequentially and YoY(+24%).
In terms of the retail partnership, SDC’s oral care products are being rolled out at Walmart and Shoppers Drug Mart locations across Canada. At the same time, the company is re-inventing its business model by building its network of care providers.
How has the Pandemic impacted demand generation at SDC?
1. Pre-COVID: 90 percent of SDC business demand was generated by Smile shops.
2. Post-COVID: 60 percent from impression kits and remaining 40 percent coming from Smile shops. This of course had an impact on business as it meant that several Smile Shops had to be shut down due to reduced utilization rates, while margins were negatively affected by higher impression-kits costs (increasing the cost of revenues).
However, looking at the bigger picture, it may not be SDC’s tele-dentistry model that may disrupt the industry. The reason being that SDC is still a young company with an evolving business model. Indeed, what’s really interesting is the company’s quest to rediscover itself as it slowly transforms into care partnered (doctor-directed) model, and leverages heavily on its innovative payment model SmilePay, which continues to be among SDC unique value proposition.
To find out more about SmilePay statistics and other relevant information, please refer to our Research Report here (available for registered members only).
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