The WHO predicts that infertility will be listed as one of the three major human diseases in the 21st century, second only to tumors and cardiovascular diseases.
Assisted reproductive technology is a method of treating infertility, including artificial insemination(AI) and in vitro fertilization-embryo transfer (IVF-ET). Among them, IVF-ET is the main technology currently used, which refers to the technology of taking out gametes from the human body, fertilizing them to form embryos under in vitro conditions, and transferring them into the uterine cavity for implantation and development of fetuses, known as test-tube babies. At present, IVF accounts for about 95% of the market share in assisted reproductive services in China and the US.
The Increasing Infertility Rate Drives the Demand for IVF
The infertility rate has risen from 2.5%-3% 20 years ago to about 15%, which is expected that this proportion will increase to 17% in 2020. Since producing offspring plays an important role in human society, assisted reproduction has become a rigid demand, in which price sensitivity is relatively low.
People often attribute infertility problems to women, but scientific data shows that 50% of infertility is caused by men, 30% by women, 10% by both men and women, and 10% by other factors, such as environmental issues.
Sperm abnormalities accounted for 57% of male problems, followed by sexual dysfunction, prostatitis, and spermatic vein removal.
Females are mainly caused by delayed childbearing age, endocrine disorders, and increased induced abortion caused by thin endometrium and irregular menstruation.
Childbearing Age Delayed
In 2017, the age of first marriage and first childbearing in China increased by 20% and 15% respectively compared with 1990, and showed a continuous upward trend. With the increase of age, the number and quality of female follicles decreased, and the probability of conception also decreased. The highest rate of conception for women aged 20 to 24 is 86%. As the age increases, the probability of conception becomes smaller and the decline is not small.
The Trend of Younger Crowds Is Obvious
There are about 40-60 million artificial abortions worldwide each year, that is, 26% of global pregnancies end in abortion. Since 2013, China has 13 million abortions registered each year, of which about 50% are women under 25.
Abortion produces combined inflammation or damage to the endometrium, leading to decreased fertility or infertility at all. 88.2% of patients with secondary infertility have a history of induced abortion, and the probability of infertility caused by 4 repeated abortions is as high as 92%.
The Liberalization of the Second Child Policy Has Brought Birth Orgasm and Is A Catalyst for IVF Technology
The full liberalization of the second child policy not only expands the newborn market, but also acts as a catalyst for the assisted reproduction industry and accelerates the fermentation of the industry. Starting in the 1980s, the annual birth population continued to decline, and it increased slightly after 2005, but it remained at the level of more than 16 million. The second child policy was officially implemented on January 1, 2016, when the number of births in China exceeded 17.86 million, and the fertility level increased to more than 1.7 times. The proportion of second births and above accounted for more than 45%. In 2017, the number of births of second children exceeded the number of births of first children, accounting for 51.2%. The implementation of the second child policy has effectively curbed the declining trend of the newborn population and provided a broad market for the application of IVF technology.
Driven by Both Volume and Price, The Assisted Reproductive Market Continues to Grow Rapidly with A Considerable Scale
From the perspective of stock, the stock of the infertile population in 2019 was about 50 million. Assuming that 20% of patients choose to use IVF surgery, the potential market demand is around 10 million. With the increase in the prevalence of infertility in China, the aging of the population, and the increase in the proportion of second births, concepts such as prenatal and postnatal care are deeply rooted in the hearts of the people. Technology upgrades have brought about an increase in the cure rate, and improved patient experience and public awareness. The penetration rate of reproductive services has maintained sustained and rapid growth, and market demand will further expand. It is reported that in 2017, the approved assisted reproductive institutions completed only about 300,000 IVF operations annually, and the incremental market scale is considerable.
Assisted Reproduction Industry Chain
In recent years, the assisted reproductive services in China have developed rapidly, in which a relatively complete industrial chain has been formed in the process. The upstream is mainly suppliers of assisted reproductive drugs, test reagents, and equipment; the midstream is an Internet platform for related services; and the downstream is assisted reproductive service institutions.
As the core qualification of assisted reproduction, the test-tube baby license has a high threshold and a large amount of gold, which requires higher qualifications for hospitals and doctors, and the number of license institutions is limited by planning. Among the 550 assisted reproductive institutions as of 2020, only 360 hospitals have obtained IVF licenses, and 34% of the reproductive centers still fail to meet IVF technical requirements, which can be seen that the industry is seriously in short supply.
Among the licensed assisted reproductive centers in China, public assisted reproductive centers dominate. The advantage of public assisted reproductive medical institutions is that the pregnancy rate is generally relatively high, and the fees are relatively low with 20,000 to 30,000 yuan per phase. However, the disadvantage is that the number of patients in the queue is large, waiting for at least half a year, which cannot be treated in time. In 2016, there were 409 assisted reproduction centers accounting for 91%, and there were 45 private assisted reproductive centers, accounting for only 2 of the top 10 institutions.
Currently, private assisted reproductive centers have just begun to develop, in which the trust of users has not yet accumulated. Therefore, many users still prefer public institutions that support the early stage of the assisted reproductive industry structure to enhance public awareness and trust. When the assisted reproductive market is severely in short supply, the domestic private assisted reproductive center can expand and enrich the industrial scale with the quality of treatment and reputation.
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