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INSIGHTS / THE BIG PICTURE

Promising market, but China’s DTC genetic testing startups have to first overcome a few hurdles

China · Apr 19, 2019 · By Wang Xiao'e and Hua Nan

Genetic information is being used for everything from predicting health risks to personalizing exercise and dietary regimes. China represents a huge potential market for direct-to-consumer (DTC) genetic testing

In 2017, more than 15 million US consumers had their DNA analyzed through direct-to-consumer (DTC) genetic testing. The number was about 300,000 in China, a market penetration rate of only 0.03%.

Over 200 genetic testing startups have sprung up in China the past few years, including 23mofang, WeGene and Somur. And VC firms are chomping at the bit to get in on the action. In 2016, 95% of Chinese genomic startups received more than RMB 10 million in financing each.

However, in order to exploit fully the potential of the market, these startups have some significant obstacles to surmount.

For the majority of Chinese consumers, DTC genetic testing is still a technological novelty. Since the results are not accepted by hospitals for use in diagnosis and treatment, many consumers just get tested for fun. “[Many of] our customers are interested in their ethnic roots,” said 23mofang founder and CEO Zhou Kun.

The high cost of genetic testing in China had previously represented a huge barrier to adoption. Since startups began building their own test centers in mid-2017, the cost of DTC genetic tests has decreased significantly.

US$30 to trace your DNA

Edited by Wendy Lovinger

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