today IDEM Singapore 2014 05 April

n In one swift move, Align Technology did not renew the distribution agreements with its dis- tributor in the Asia Pacific region last year. todayinternationalspokewithAlignTechnology’s vicepresidentoftheAsiaPacificregion,JulieTay, inSingaporeaboutthetransitionandthecompa- ny’sprospectsintheregionfortheyearstocome. todayinternational:Yourcompanychanged its distribution in the Asia Pacific region to a direct sales model last year. How has the transition turned out so far in terms of or- ganisationandfinances? Julie Tay: In the past, Japan and China were ouronlydirectsalesmarketsinAsia.InMay2013, we successfully completed the transition of our four largest indirect country markets, Australia, New Zealand, Hong Kong and Singapore, from ourAPACdistributorbacktodirectsalesandman- agementbyAlign.Thisgeographicaldistribution of countries probably represents the best global growth opportunities for Align Technology over the next three to five years. The transition has beensmoothandwehavecontinuedtoseestrong organicgrowthforInvisalignintheAPACregion. Fromtheresultsfromthelastquarterof2013,you can see that the total sales volume in Asia grew over 50 per cent annually. We now have a strong leadership team managing the business in each country. We now realise direct sales at our full Invi- salign average sales price (ASP), rather than the discounted ASP under the distribution agree- ment. This means that the roughly 5 per cent of worldwide revenue for which Asia Pacific accounts will become an even more meaningful contributortotoplinegrowth. Other APAC markets, like South Korea and the Philippines, are still operating un- der a distribution model. What makes these markets currently not suitable for direct sales, and do you have any plans to change todirectsalesthere? Align continues to assess different markets and to work closely with our partners to provide the best possible service to both patients and doctors. Sales in Asia contributed only 2 to 2.5 per cent of Align’s worldwide revenue in 2012. Was this the main reason for the change to yoursalesstructureinthatregion? This region presents a huge opportunity for Align. We want to provide doctors and patients with more options for a beautiful healthy smile. There are actually many doctors who wanted to offer Invisalign and are glad that we now have adirectpresenceinmanyAPACcountries. You reported strong growth in the Asia Pacific region in the last quarter of 2013. Is this solely a result of the transition or werethereotherdevelopmentsatplay? Our strong annual volume growth reflects continuedprogressandexecutionofourstrategic growthdriversacrossAsiaPacific.Astheregion came together, the APAC leadership team de- ployedkeystrategiesinspecificmarkets.Wealso investedheavilyinpeople,doctortrainingandpa- tientprogrammestodevelopthemarketsfurther. You are doing particularly well in China and Japan. Are these the most important marketsforInvisalignrightnow? The APAC region in general has been the fastest-growing region for us but within Asia ChinaandJapanarecurrentlythemostimportant marketsforInvisalign.Bothcountriessharesimi- larities,buttheyarealsoverydifferent.Whatwe see are the most complex cases, such as Class II, Class III, extraction, open bite, etc. That might be wherethesimilaritiesend. Despite a population of 120 million, there are a relatively small number of orthodontic practitioners in Japan: only an estimated 3,000 to 4,000. Practitioners there tend to be conser- vativeandwanttoseesufficientclinicalresults on Japanese patients, which because of the severity of the malocclusion can take up two to three years. All of these factors led to a slow start but, in the past two years, our business there has grown well above our overall rate. We have been successful in building up clinical confidence through a pro-active marketing ap- proach, which includes educating consumers about clear aligner therapy and the importance ofhavingabeautifulsmile. InChina,orthodonticsisprimarilyperformed in institutional settings. A rising middle-class is accumulating disposable income for these kinds of treatments and they appear to be more open to technology and modern approaches to the treatmentofmalocclusion.WebelievethatChina is the one market worldwide that has the poten- tialtobeaslargeastheUSoverthenexttenyears intermsoforthodontictreatment. Particularly in Asia, Western dental man- ufacturers have to face increased compe- tition from local providers offering similar productsatlowercosts(e.g.dentalimplants). Isthesituationinyourmarketcomparable? We believe we have a strong brand with which we are able differentiate ourselves from the competition in key areas. The science and technology behind our products, our ability to develop total solutions for malocclusion, such as the recent introduction of Invisalign G5 for deep bite, and our proprietary SmartTrack alig- ner material are significant barriers to others seekingtoenterthemarket. Invisalign Teen has gained a significant marketsharesinceitwasintroducedin2008. With demographic expansion in most Asian countries (a very young age distribution), whatprospectsdoesthisproducthavethere? The teen segment represents the largest por- tion of the orthodontic market and continues to be very important to Align. We believe the prospect is huge, especially in certain countries, and we intend to make Invisalign the product ofchoiceforleadingdoctors. You have worked in the health business before. What do you see as the particular challengesofthedentalmarket? The technology is moving so fast that doctors may not even realise it when it has arrived. In addition,increasingpatientdemandsandsophis- tication are going to change the doctor–patient relationship. What general prospects do you see for yourcompanyinAsiafortheyearstocome? We expect growth rates across the entire AsiaPacificregiontocontinueoutpacinggrowth in our international business. This is a very ex- citing time for Align and our prospects in this regionareverypositive.Wearetheclearleader in a huge underpenetrated market with a high level of clinical skill in Australia, New Zealand and Hong Kong, for example. Increasing con- sumer sophistication in China and hence de- mand for Invisalign, large untapped segments inJapananddevelopingmarketssuchasSouth- East Asia all offer a strong growth trajectory for Alignacrosstheregion. Thankyouverymuchfortheinterview. The Straumann® Dental Implant System is a worldwide leading solu- tion for general practitioners and specialists. Our commitment to re- search ensures high quality backed by independent science. Producing innovations that improve patient care has made us a trusted business partner in over 70 countries. www.straumann.com The Straumann® Dental Implant System is a worldwide leading solu- tion for general practitioners and specialists. Our commitment to re- A sense of trust. More than an implant. AD newsIDEM Singapore 2014—5 April Outpacing growth in our international business AninterviewwithJulieTay,Vice-PresidentAsiaPacificatAlignTechnology TDI0714_05_Tay 31.03.14 13:51 Seite 1