Some 466 million people worldwide suffer from disabling hearing loss, according to the World Health Organization, roughly 5% of the world population. The number is expected to grow to over 900 million by 2050. Around 70-100 million are in China. With fewer than a thousand trained audiologists for 1.3 billion people and an expensive, an imported business model for selling hearing devices has meant that getting help even in big cities is difficult.
Help could come from the US. A Chinese-backed US hearing aid company has successfully lobbied for a change to regulations which allows the company’s devices to be sold directly to the consumer along with self-testing kits. The hearing aids can be calibrated by the user or remotely by trained staff. This is already side-stepping the need to see an expensive series of audiologists to get help in the US.
Being able to tackle hearing issues independently could be something of a revolution worldwide for people suffering from disabling hearing loss. The company that has developed the self-testing and cheap device platform, iHear, is trialing the format in the US before targeting China and then Japan.
“We want to be everywhere, we want our hearing aids to be available in every city, every town, every corner in China,” Adnan Shennib, founder of iHear, told TechNode. Speaking about small towns and cities in China, he said “you won’t find a single person capable of doing hearing tests or fitting hearing aids. Our technology is the only online-based platform, that can train a nurse and remotely guide them and provide a service.”
Hearing loss in China
The traditional track towards getting a hearing aid in China is via a hospital referral or, more recently, with a little experimentation on Taobao. China has an even more severe shortage of audiologists than other countries. “[China] will never graduate enough to catch up with the UK or US,” said Shennib. “To put things in perspective, we have 20,000 qualified hearing professionals in the US, serving 300 million people and we still have a severe shortage. In China, there’s less than 1,000 trained, licensed audiologists.”
Prices, also, are high globally. “The average price of a hearing aid in the US is $2,400 per ear. Even in China, it’s $1,000 for a quality device. It’s the same manufacturers that control distribution. Six companies control about 95% of the market,” said Shennib. The company’s own devices retail at $300-400 each in the US and can be bought directly from the company without needing a prescription from an audiologist.
“We always feel a bigger market for the hearing aid will be in China,” Gang Qin, Partner at Yuanzhan Capital (远瞻资本, also known as Lighthouse Capital), which invested in iHear in 2014, told TechNode. “However, the US is definitely a pioneer in healthcare innovations. For example, if a product passes US FDA approval, the CFDA will accept and recognize part of the test results and shorten the application process.”
Big audiology multinationals are already well established in China. For example, Switzerland’s Sonova has a solid presence in Chinese hospitals as a way to capture customers at the diagnosis and treatment stages. It launched its Global Hearing Institute in Suzhou in May 2017 as part of its efforts to educate Chinese audiology clinicians. iHear, which initially launched via Indiegogo and secured a $2.5 million round C in 2014 led by Yuanzhan Capital, faces deep-pocketed competition.
Yuanzhan Capital identified the issue of expensive foreign products or taking chances online. “In general, the healthcare market is quite segmented and chaotic in China,” said Gang. “There is so much ‘noise’ in the market that consumers have a hard time making wise judgments on what to buy. In the end, consumers either choose high priced imported products or just the low price no-brand products.”
The current process for people with hearing loss is generally a long, expensive and off-putting series of appointments with audiologists, even for routine cases of loss. The iHear system works by someone who believes their hearing has deteriorated buying a testing kit online or from a drugstore. They plug it into their computer, put in the earphones provided and then test their own hearing. Test hardware has to be bought as one’s own devices and earphones are not calibrated for testing.
The company’s hearing aids come with four different presets. For 85% of those with hearing loss issues taking the test, the software will determine which of the four settings to choose. The remaining 15% of customers can then connect with iHear’s trained consultants by phone and online for a more complex consultation and remote calibration of their device, included in the price of the device.
In many markets, the current process for buying hearing aids is determined by legislation, the industry or both. After years of lobbying the President’s Council for Science and Innovation, iHear managed to persuade US lawmakers that consumers can be empowered to tackle their own hearing loss, just as people can address vision correction by getting glasses. “About 90% of people who need prescription glasses get them, 95-97% of those with hearing loss don’t [get hearing aids],” said Shennib.
US guinea pig
iHear has already got FDA approval for its testing and device system and is now shipping to pharmacy chain CVS to go on sale in early July. As Yuanzhan Capital’s Gang Qin pointed out, FDA approval helps with attaining approval from China’s authorities (CFDA), but there are further reasons for launching in the US.
“The hearing-impaired population is generally over the age of 60. Computer use of such age group is more proficient in the US than in China. Therefore, the US will serve better as a testing ground for direct-to-consumer online hearing solutions,” said Gang.
iHear expects CFDA by the end of 2018 and is itself registered in Shanghai as Ai Ting (爱听). Yuanzhan introduced iHear to the Chinese hearing equipment distributor Ai’er (爱耳时代). iHear is now seeking a $20 million series D for its China entry and is talking to Chinese tech companies that are becoming involved in health. The plan is to use the same telemedicine approach in China so that customers can test their own ears, with specialist help online or over the phone when needed.
The worldwide hearing aid market is forecast to grow by 5.51% a year from 2018 to 2022 according to a report by Technavio, and much of future growth is expected to come from China and India. After entering the China market, Japan, with its rapidly aging population is next for iHear.