The ever-progressing digitalisation, changing regulations and a tendency towards mergers are currently shaping the dental industry. At the International Dental Show (IDS) in Cologne, Dental Tribune Online met with Jeff Wong, Strategic Analyst Manager at international medical market research and consulting firm iData, to talk about how—major and emerging—competitors have reacted to these trends.
Dental Tribune Online: Digitalisation is one of the main trends that is changing the industry. Other than that, what developments are dominating the dental market?
Jeff Wong: Yes, digitalisation is still the up-and-coming trend and everybody is trying to get into that market now. On the product side, I would say it is 3-D printing and intra-oral scanning. Three or four years ago, there was only a handful of competitors in both of those areas. This year at IDS, almost everybody is presenting some new product in these fields—knowing how fast these markets develop, everybody wants to participate.
What consequences will this have for the market in general?
Especially in these two areas, where the level of imitation is high, with so many competitors, it will definitely start diluting the market shares among the existing companies. However, if these participants start focusing on specific regions or niche audiences, I think there will still be a great deal of benefit.
What about the recent merger trend—is that something we will see more of in the future?
From what we have seen in other industries, we definitely predict that the trend will continue. Of course, there will always be a couple of smaller companies that will end up becoming fairly large themselves and remain independent. However, we expect that many of the successful emerging companies will be acquired at some point. One advantage that the larger competitors have is the amount of resources they have. They can always stay ahead of the curve. If they see somebody come to the market with something unique, they have the resources to quickly develop a product of their own.
What role do the emerging markets play? What regions will become more significant in the future?
Regarding digital dentistry, I would say much of the development is linked to implantology and prosthodontics. The key countries where those areas are big as well are Brazil and Italy. Even though the penetration of digital dentistry might be relatively higher in those areas compared with others, I would say they have the greatest opportunities for growth.
What are the main trends in implantology?
In terms of implants, dozens of new companies are popping up every year, but many are also either acquired or close down. There are definitely certain regions that are experiencing a great deal of growth, for example many Asian countries. At the same time, traditional markets such as Italy, Brazil and the US are doing very well. These markets are well penetrated at this point, so in terms of market growth it will definitely slow down. However, there is still substantial growth opportunity for the lower-priced competitors, while the traditional premium brands will see considerable competition from other markets.
Do you think this will lead to those companies buying local competitors? Or what will their strategy to succeed be?
I think the strategy of most of the larger key competitors will be continuing acquisition. However, the strategy of some of the larger regional companies, for example in Brazil, is to continue going and to expand their global presence instead of being acquired.
In addition, many of the current key participants—with the regional regulations changing from country to country—are being forced to acquire new companies in order to be able to operate in the region.
So, you are saying that larger companies are looking for smaller businesses to acquire in order to bring new technology to market?
Not only on the technology side, but also to compete on the pricing level as well.
In the current political climate, the Chairman of the Association of the German Dental Industry has issued a warning about protectionism and trade barriers. What are companies doing in this regard?
At this stage, I think, companies are mainly waiting to see what will happen. Nevertheless, in light of what is happening in other industries regarding the whole Brexit issue—for example, European Union chiefs have warned airlines, including easyJet and Ryanair, to relocate their headquarters to the EU if they wish to continue their routes within continental Europe after the Brexit—if that can happen in the airline industry, who is to say it cannot happen in the dental industry. Again, for example in Mexico, which has a major dental tourism industry, if that is going to be affected in terms of procedural volumes, it is definitely going to affect the dental manufacturers as well.
Thank you very much for the interview.