By Frank-Christian Raffel
The Chinese dental market continues to be the fastest growing and strategically most important market in the world, with particular challenges for international companies.
Ahead of IDS in Cologne in February 2025, MRL Advisors published a white paper incl. results of the survey of dental product suppliers from Germany, Austria and Switzerland conducted with their representatives in China.
In summary, the outlook for companies operating in the Chinese market is very positive. The highly dynamic growth is considered to be sustainable, as it is primarily the result of:
– Sensibility: The growing awareness in China of the importance of dental health.
– Need to catch up: The level of care for Chinese patients is still well below that of other countries such as South Korea.
– Demographics: The increasing proportion of older people in the population will further increase the demand for dental services.
However, the high price pressure caused by public procurement practices (“volume-based procurement”, VBP) as well as the ever-improving local suppliers pose particular challenges for international providers.
“The classic model, consisting of simply exporting products from Europe to China via a local distributor, is under pressure”
“Starting with marketing and brand positioning, companies need to implement greater localization of the value creation stages,” says Frank-Christian Raffel, Managing Director of MRL Advisors GmbH.
Much more important than in the past is the establishment of the manufacturer’s brand among doctors, but also among patients in China. One of the most important cornerstones is the transfer of real knowledge, which is subsumed under “Education” in China.
“Based on business logic alone, a distributor will not be able to make the necessary investments in branding,” says Raffel. “In addition to the company’s own subsidiary, which seems too costly for some companies, new corporate forms should be considered for China. Optionally also with local partners, but under the control of the core company”.
MRL Advisors’ databases show that more than 60% of dental suppliers from Germany, Austria and Switzerland operating in China work through distributors and only a third have their own subsidiary.
Further insights can be found in the complete white paper from MRL Advisors, which we will be happy to send you on request.
