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Affluent Mainland Consumers Adopting Fresh Approach to Dental Care

Historically, mainland consumers have been far less fastidious when it comes to oral care than their contemporaries in the US or Europe, but that is now changing rapidly, opening up huge business opportunities in the burgeoning dental sector.

Photo: China’s most expensive toothpaste: Oral-B’s Rmb159 range.
China's most expensive toothpaste: Oral-B's Rmb159 range.
Photo: China’s most expensive toothpaste: Oral-B’s Rmb159 range.
China's most expensive toothpaste: Oral-B's Rmb159 range.

Back in January, the most expensive toothpaste product ever to be sold on the mainland was introduced by Oral-B, a subsidiary of Procter & Gamble (P&G), the global household goods giant. With a price tag of Rmb159, it cost between eight and 10 times as much as most of its competitor brands. While many wondered if such an expensive product would actually sell, P&G remained fully confident, clearly believing that the mainland's burgeoning oral care sector is ripe for such premium products.

Speaking just after the launch, Ouyang Qingqiu, President of P&G's Greater China Oral Care Division, said "Chinese consumers have been buying a huge amount of premium luxury, skincare and haircare products. When it comes to oral care, though, there appears to be a huge gap when compared with consumers in Western countries."

A Brighter Future for Teeth

The company's optimism is built, apparently, on in-depth research into the mainland oral care market. According to its findings, China's oral care product market currently ranks second in the world, with 2012 retail sales amounting to half of that of the US market. Tellingly, though, per capita oral care spending in China is only Rmb2.7 a year. This falls far short of the spending in the other major oral care product consumer markets around the world. In fact, it is a mere 13% of the per capita spending in the US and only 18% of that in Japan. Taking into consideration the size of China's population and the fact that its emerging middle-class is increasingly using oral hygiene products, it is clear that the market has huge potential for growth.

Photo: Specialist maternity toothbrushes: Now a must for pregnant women.
Specialist maternity toothbrushes: Now a must for pregnant women.
Photo: Specialist maternity toothbrushes: Now a must for pregnant women.
Specialist maternity toothbrushes: Now a must for pregnant women.

In similarly startling figures, China has only about 100 dentists for every one million people, a ratio far lower than that of the developed or even moderately developed countries in Europe and America, where the typical ratio is around 500-1,000 dentists per million. Even in Brazil there are 870 dentists for every one million people.

The statistics also show that the rate of tooth loss in middle-aged and elderly people is unusually high in China. The average number of remaining teeth for people in the 35-44 age group is 29.4 out of 32, with a dental restoration rate of only 11.6%. The average number of remaining teeth of people in the 65-74 age group is 20.97, with a dental restoration rate of only 42.6%. The penetration rate for the replacement missing teeth with high-end dental implants is even lower, with the figure almost negligible when compared to developed countries.

Currently, though, more and more mainland people are upgrading their level of consumption and also starting to pay increased attention to oral care. In general, people are more aware of the importance of oral health and have come to understand that poor dental hygiene has a direct impact on eating, drinking and their personal appearance, while also contributing to the prevalence of a number of diseases.

Photo: On the rise: Upmarket dental clinics.
On the rise: Upmarket dental clinics.
Photo: On the rise: Upmarket dental clinics.
On the rise: Upmarket dental clinics.

At present, mainlanders are willing to pay more to ensure their oral wellbeing, especially those who pursue affluent European and American lifestyles. This is particularly the case among those – such as pregnant women – who are susceptible to gum problems.

According to Ouyang, a clear sign of the rapid growth of the mainland oral care industry has been the surge in the number of dental clinics. Upon returning to Guangzhou after working at P&G's US headquarters for three years, he was struck by just how quickly the dental care industry had expanded.

In many first-tier mainland cities, high-end dental clinics are becoming as commonplace as coffee shops and convenience stores. Frequently, such a facility is now a feature of many of the more upmarket office blocks.

Sophistication and Segmentation

As the mainland oral care market is showing signs of maturing, consumers are also becoming more sophisticated and segmented in term of their expectations. According to data from AC Nielsen, the global market research company, the highest sales growth of toothpaste (30.8%) is in the Rmb15+ per 100g sector. The company's research also shows that, of the 37 new toothpaste products launched in China in 2013, the average price per kg was 86% higher than that of the new products launched in previous years, a clear indication of the move toward higher-end products.

Over recent years, the number of brands targetting the high-end market has been increasing. The first-mover here was Yunnan Baiyao, a domestic brand launched in 2005 at a price point twice that of a number of well-known international brands. Under the catchline: "Preventing and treating bleeding gums" and supported by local store-based marketing activity, the product made a huge impact on the market.

Photo: Children’s oral care products.
Children's oral care products.
Photo: Children’s oral care products.
Children's oral care products.

Other brands followed suit, moving into the high-end market one after another. In 2011, Pien Tze Huang launched a deep-cleansing toothpaste using a special formula that it claimed "gives full play to the unique efficacies of Pien Tze Huang for detoxification, reducing bruising, anti-inflammation and pain relief". At the same time, Jingxiutang, a subsidiary of Guangzhou Pharmaceutical Holdings launched a toothpaste based on the principles of traditional Chinese medicine. Later, Samchine Pharmaceutical, part of the Harbin Pharmaceutical Group, launched a Coptis Chinensis toothpaste, while Lesening Xunkang launched a toothpaste especially for sensitive teeth.

In recent years, in line with this expanding oral care market, electric toothbrushes with a price tag of more than Rmb1,000 and toothpaste priced at in excess of Rmb100 per tube have all sold well across the mainland. Similarly, high-class dental clinics and related high-end medical insurance companies have also thrived.

Another phenomenon highlighting the increasing maturity of the market is the way in which a number of industry players are now responding to consumer demand for segmentation. Pregnant women, children and the elderly have long been considered the three primary groups requiring extra dental care, with each group having different needs.

Traditionally, many in China have attached considerable importance to prenatal and postnatal care. As such, it is not surprising prenatal and postnatal oral care have received particular attention over recent years. In line with this, a number of brands have introduced specialist maternity toothbrushes.

The new generation of mainland parents attach great importance to the oral care of their offspring from the moment they are born. This has resulted in enormous demand for a whole range of related products, including babies' gauze pads for gums, silicone toothbrushes, children's toothbrushes, toothpaste and dental floss. In order to meet these specific demands, several industry players have introduced market and product segmentation. This has seen a number of brands start to classify their toothbrushes into three categories – six months and above, 18 months-five-years old and six-12 years old. These align with a number of key stages – first teeth growing, primary teeth growing and teeth transition.

There are now also dental appliances designed especially for the elderly and those with particular medical requirements.

Demand Driven by Social Pressure

Photo: Socially-driven dental care: Breath freshening sprays.
Socially-driven dental care: Breath freshening sprays.
Photo: Socially-driven dental care: Breath freshening sprays.
Socially-driven dental care: Breath freshening sprays.

The overall demand for oral care is being spurred not only by health concerns but also by social pressures. Chinese consumers are increasingly aware that healthy teeth give a good impression in both social settings and in the workplace.

This new awareness has triggered changes in the dental care routines of many mainlanders. In the case of Wang Ying, a mainland office worker employed by an overseas company, she uses a wide range of oral care products, including imported toothpastes, an electric toothbrush, a tongue scraper, dental floss, mouthwash and breath fresheners. For her, oral care is a habit she developed while studying in the US. The importance that Americans attach to oral care was once almost unimaginable to most Chinese. The changing awareness, though, has seen whitening and orthodontic treatment become the fastest growing dental services on the mainland.

Oral care products for use in social scenarios are also selling well. In particular, sales of such products as Kobayashi's BreathCare chewing gum, Ora2's breath freshening spray, and Propolinse's propolis mouthwash are said to be brisk in both supermarkets and on e-commerce platforms.

Ren Yuan, Special Correspondent, Beijing

Content provided by Picture: HKTDC Research
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