Dental clinics are closing down in batches.

Have you recently seen staff from dental clinics setting up stalls at the entrances of shopping malls or wet markets?

They will put up a table and sit there to attract customers.

Dentistry used to be an extremely profitable industry, how did it end up in the situation of setting up street stalls?

Today we are going to talk about this topic.

01

The dental industry is indeed very profitable, especially before 2023.

First of all, the services provided by dental clinics can be roughly divided into two categories. The first category is low-unit-price basic services, such as teeth cleaning, tooth filling, and root canal treatment, with prices ranging from one or two hundred yuan to one or two thousand yuan.

The other category is high-unit-price, high-gross-margin services, such as orthodontics and dental implants. A full course of orthodontics costs at least 20,000 to 30,000 yuan. A single dental implant also costs about 20,000 yuan, including the implant embedded in the alveolar bone, the outer crown, and the medical service fee charged by the clinic. If you choose imported high-end brands, the price of a single dental implant can easily exceed 30,000 yuan.

According to common industry data, for a dental implant priced at 20,000 yuan, the gross profit of the clinic is between 12,000 yuan and 14,000 yuan.

For you, it is just a decayed tooth, but for the clinic, it is a gold tooth.

If you get several dental implants, the total cost will add up to the price of a BMW 5 Series.

In addition, compared with opening other types of hospitals, the threshold for opening a dental clinic is surprisingly low.

You only need to rent a storefront of several hundred square meters, buy several dental treatment chairs, and hire one or two dentists to start the business.

You don't need 100 or 200 million yuan, nor 80 or 90 million yuan, you only need 1 million yuan.

That's right, you can invest in a small dental clinic with about 1 million yuan. The investment for a medium or large dental hospital is only 10 to 20 million yuan.

Compared with other types of hospitals, this price is already extremely low.

At this price, you have nothing to lose, and you will not be fooled into paying an unreasonable amount.

In short, low investment and high return. There are few such business models in the entire medical industry, and only the medical aesthetics industry can compare with it. With a proper location and effective marketing, the initial investment can be recovered within one or two years.

02

Then capital smelled the opportunity and poured in, and the old story repeated itself.

From 2016 to 2021, more than 200 investment and financing events took place in the dental industry, with the total financing amount exceeding 300 billion yuan.

2021 was the peak year, with 66 financing events in the industry and a total financing amount of 122 billion yuan, which is equivalent to more than 30 million yuan of capital pouring into the industry every day.

As a result, the number of dental medical institutions across the country soared from more than 60,000 in 2015, and doubled within a few years.

According to reports from *China Entrepreneur*, there are at least 6,000 dental clinics in Beijing alone, and their density is almost as high as that of convenience stores. Chengdu is even known as the city with the highest density of dental clinics in mainland China. In the core business districts of many cities, nearly 10 dental clinics can be found within a 1-kilometer radius.

At that time, the topics often discussed in the industry were that some business owners used capital leverage to open dozens of chain clinics, packaged and sold them to a medical group, and then cashed out and left the market.

Selling assets, cashing out, making a fortune, and exiting the market. Everyone in the industry knows what that means.

Moreover, under the pressure of capital, all clinics targeted the two high-unit-price services of dental implants and orthodontics, taking them as cash cows, while basic services such as teeth cleaning and tooth filling were only used as drainage tools.

You will see teeth cleaning packages priced at only ten to twenty yuan on group-buying platforms. You enter the clinic for the low price, and soon a "consultant" will appear beside your dental chair, telling you firmly that a simple teeth cleaning is far from enough for your tooth problem.

This "consultant" may not be a doctor, but a salesperson wearing a white coat. His only task is to upgrade your service from a tens-of-yuan teeth cleaning to tens-of-thousands-yuan orthodontics or dental implants.

Although basic services such as tooth filling are the most common demands, these two high-charge services often account for 70% to 80% of the total revenue of the clinics.

It can be said that they not only made money easily, but even made huge profits without much effort.

However, as a line from a popular internet meme puts it: At the peak of the tide, there are unlimited beautiful sceneries, unlimited temptations, and also unlimited risks. After several years of easy profits, the whole industry bubble suddenly collapsed.

03

In 2022, the State Council of China decided to include dental implants in the scope of centralized procurement. In January 2023, the centralized procurement for the "dental implant system" officially opened for bidding, with nearly 18,000 medical institutions across the country participating, 39 enterprises selected, and the average selected price of implants was suppressed to more than 900 yuan.

Before the centralized procurement, the procurement price of imported implants was generally between 2,000 and 6,000 yuan, and the price of domestic implants was also between 1,000 and 2,000 yuan.

After this policy was implemented, the price was directly cut by more than half.

In addition to the price of hardware, this centralized procurement also affected another charging item for dental implants, the "medical service fee".

The new policy stipulates that the full-process service fee for a single dental implant in tertiary public hospitals should be reduced to 4,500 yuan. Before that, the average price exceeded 6,000 yuan, and in some cities it exceeded 9,000 yuan.

Although this regulation is aimed at public hospitals, private clinics that want to get customers have no choice but to cut their prices accordingly.

With both the hardware price and the service fee reduced, the price of a single dental implant has dropped from 20,000 to 30,000 yuan directly to 4,000 to 7,000 yuan.

This is good news for patients, but for those clinics that have bet all their assets on the dental implant business, it is a disaster.

The revenue of clinics has been cut by more than half, but the rent and salaries remain the same as before.

As a result, their profits have completely collapsed, and the golden age of the dental industry has come to an end.

04

In fact, the collapse of profits is only half of the story, and the other half is related to the change in customer acquisition cost.

In the past, dental clinics mainly acquired customers online, through the highly relied search engine bidding, various social media platforms and review platforms. According to estimates, the online customer acquisition cost per customer is about 1,000 to 2,000 yuan, or even higher.

This was not a problem in the era of huge profits, since the cost would eventually be passed on to customers. But after the centralized procurement policy, this business model no longer works.

If I only charge a few thousand yuan for a dental implant, and then spend another 1,000 to 2,000 yuan to acquire a customer, I will lose all the money directly.

Not to mention that the cost of online traffic itself is getting higher and higher.

Because all dental clinics are investing money in online marketing at the same time, the cost of traffic keeps rising while the conversion rate keeps decreasing. In the past, the input-output ratio on search engines could reach 20:1, but now it is already a blessing to achieve a ratio of 5:1.

Isn't this my old friend "involution"?

As a result, the clinics are caught in a dilemma: spending money on traffic means losing money on every order, while not spending money on traffic means they cannot get any orders at all.

With no other options, they have to cut online marketing budgets and turn back to offline channels.

This is the reason why you see them setting up stalls on the street.

The cost of setting up a stall is nothing more than a table, a roll-up banner, and one or two employees. They don't even need to hire extra staff, since there are few customers in the clinic, they can let the front desk staff and nurses take turns to run the stall, and they can even buy groceries on their way home after work.

If they can attract 2 customers a day, the total cost is not even a fraction of the online customer acquisition cost.

05

Of course, I'm talking about the scenario where they can attract customers, but the problem is that setting up stalls does not necessarily bring in customers.

In fact, setting up street stalls is more of a helpless move after the industry bubble burst.

In 2024 after the centralized procurement policy was implemented, 13,000 to 15,000 private dental institutions across the country closed down, with an average closure rate of more than 10%. In some cities with fierce competition, the closure rate reached 30%.

These closed institutions include not only small clinics, but also well-known chain brands.

For example, Forus Dental, which once called itself "the giant in the domestic orthodontic field", had stores in more than ten cities across the country. But in early 2025, its investor withdrew capital and fled, all its stores closed one after another, leaving thousands of patients losing both their money and the dental treatment they paid for.

Another example is Huanyue Dental in Chengdu, one of the largest dental chains in southwest China, which went bankrupt and entered liquidation directly in March 2025. Even B&B Dental, which is backed by the insurance giant Taikang, is continuously closing its stores and has withdrawn from many cities.

If you check the financial statements of these closed cases, you will find a highly consistent feature: all of them rely heavily on the high-profit dental implant business to maintain operation. Once the centralized procurement policy was implemented, their entire business collapsed.

However, I believe that the future of the dental industry is still optimistic.

According to statistics, more than 700 million people in China have various oral health problems.

The 4th National Epidemiological Survey of Oral Health shows that the caries prevalence rate of 5-year-old children is as high as 71.9%, but the treatment rate is only 4.1%; among adults aged 35 to 44, the detection rate of dental calculus exceeds 96%, but very few of them have received formal treatment.

Many people have not yet formed the habit of seeing a dentist, and they often choose to endure the toothache first, dragging on the treatment for years.

At present, the per capita dental consumption in China is only 3.5% of that in the United States and 6.7% of that in Japan.

There is still huge growth potential in this industry. In 2021, the market size of China's dental medical industry was 1.45 trillion yuan, and last year this figure has exceeded 3.3 trillion yuan. It is expected to reach 4 trillion yuan or even higher in the next few years.

Although the centralized procurement policy has reduced part of the profits in the short term, it has released huge market demand in the long run.

Many people are not willing to spend 20,000 to 30,000 yuan on a single dental implant, but when the price drops to 4,000 to 5,000 yuan, the number of people choosing to get dental implants increases significantly, and the relevant data can support this point.

Zhenghai Medical, a leading institution in the industry, saw its dental implant volume increase by 47% in 2023. After the centralized procurement policy was implemented, the number of patients receiving dental implant treatment at the Affiliated Stomatological Hospital of Kunming Medical University increased by 117% month-on-month.

The drop in price has indeed stimulated more market demand.

This is probably the final form of China's dental industry: deep penetration into communities, focusing on basic services, and long-term patient maintenance, which is the normal logic of the dental business.

Setting up street stalls may not be as cool as online marketing, but at least it shows that many institutions are trying their best to survive.

References:

2025 China Dental Medical Industry Market Research Report, Shuoyuan Consulting

In-depth Development of Mid-to-high End Dental Medical Services, Steady National Expansion, West China Securities Research Report

When You Spend the Money of a Car on Dental Treatment, Do Dental Clinics Really Make Huge Profits? *China Entrepreneur Magazine*

After the Centralized Procurement of Dental Implants, Why Has "Extracting More and Implanting More" Become an Open Secret in the Industry? *Yicai*

Tracking the Implementation of Dental Implant Centralized Procurement: The Price of Some Products in Beijing Has Dropped by About Half, *Xinhua News Agency*

Revelation 2025: Analysis of Investment, Financing, Merger and Restructuring in China's Dental Medical Industry, Prospective Industry Research Institute

Nearly 3 Billion Yuan Invested in Half a Year, SoftBank and New Hope Have Bet on the Track, Is the Dental Chain Industry Entering an Acceleration Period? *VCbeat*

Why is the Dental Medical Industry Worth Investing? Trillion-yuan Market, 300 Million Annual Diagnosis Visits, Imbalance Between Supply and Demand, 369 Medical Color Network

How Did Private Dental Institutions in China Step by Step Go to Closure? 369 Medical Color Network

The Profit Chain of Invisible Braces: Ex-factory Price 5,000 to 6,000 Yuan, Final Price 30,000 to 40,000 Yuan, Who Will Be the Intermediary Pushed Out? *Healthcare Pioneer*

Are Dental Clinics No Longer a Profitable Business? Jianwen Consulting

After 10 Years of Continuous Involution, Can Dental Clinics Achieve Breakthrough by Relying on Early Orthodontics for Children? *Dental Clinic Insight*

Dentists in Clinics Earn More Than Senior P7 Employees in Large Tech Companies, *Yuanchuan Research Institute*

This article is from the WeChat public account "IC Laboratory" (ID: InsightPlusClub), author: IC Laboratory, published with authorization from 36Kr.