Healthcare

Toothless nation

Zou Qifang conquers Chinese dental market

Big client of the Tooth Fairy

The British reputation for unkempt molars is a widespread one. Mike Myer’s made much of his buck-toothed gobful in the Austin Powers films, for instance. Apparently even the Mexicans refer to a wonky smile as a case of dientes ingles.

To keep British spirits up, we recommend a trip to the Chinese countryside. Even a short tour of a few cities would do the job. Dental standards are such that terrible teeth are often on display.

Dentistry is one profession probably not invented in China – more likely in the Indus Valley – but the Chinese have been practicing some form of it for 5,000 years. Early techniques included treating toothaches with arsenic, and extensive use of acupuncture.

Where did it all go wrong? Certainly, the spirit of innovation has deserted dental practitioners in more recent times. Problems with affordability has also meant that many patients have strayed far from the dentist’s chair.

But for those who covet the perfect Hollywood smile, help is at hand – courtesy of Zou Qifang, an MBA graduate from Wharton.

Zou was sent to China by Henry Wendt (the architect of the SmithKline Beecham merger in 1989). A tour of 10 cities convinced him that the demand was there for private upscale dental services. Zou subsequently persuaded Wendt and other investors to form Arrail Dental.

Arrail Dental opened its first clinic in Beijing in 1999. Eleven years on, the company now runs five clinics in Beijing, four in Shanghai and two in Shenzhen, served by 400 employees. The management team includes Wendt, Frederick Kyle (another former executive of SmithKline) and Payson Cha of HKR International, the company that built the Discovery Bay residential district in Hong Kong.

Zou’s bet was that the generation born under the one-child policy would want to spend more on their appearance, and for a much better service than that on offer at state facilities. While the vision looks sound, it has been a challenge finding dentists good enough to support the company’s expansion. “Private dental practice only emerged in China 10 to 12 years ago, so the standards aren’t completely satisfactory,” Zou told Lianhe Zaobao, a newspaper. He reckons it will take China another 65 years to reach a dentist to patient ratio of 1:5000, which is regarded as the norm in most developed countries.

Arrail has chosen to carry out campus recruitment in top medical schools around the country. Zou began by meeting each of the new employees and conveying the ‘people-focused, customer-oriented’ ethos that he wanted to encourage as part of his corporate culture. Once hired, these fresh grads joined a five-year management trainee programme.

At present, over two-thirds of the employees from the first wave of campus recruitment have opted to stay after completing the training, and they make up a third of Arrail’s payroll. With a more reliable team behind him, Zou says he is ready to carry out the next phase of expansion.

“Money isn’t a problem: talent is ultimately the key that determines a company’s growth,” he told the Economic Observer.

Money still matters, obviously. In May, venture capital companies KPCB China and Qiming Ventures injected a further $20 million into Arrail. With that investment, the company plans to expand to a network of 50 clinics in five years, with revenues exceeding Rmb500 million (compared with Rmb15 million last year). In addition, the company intends to build another brand that offers more affordable services, targeting younger consumers.

“The generation born in the eighties and nineties will become the core of the future middle class. That represents 400 million of the population and business that will keep coming,” Zou said.

Zou was once asked at a conference for a one-liner to describe his business. “We at Arrail create smiles,” he answered. Perhaps he can even cheer the British up, tooth-wise.


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