image credit: Bamboo Works
Key Takeaways:
Xiaokuo Technology has filed for a Hong Kong IPO, reporting its revenue rose 82.5% last year, with a gross margin of 72.5% for its core basic oral care segment
The company's super-charged marketing strategy using online KOLs has made it China's fastest-growing oral care products seller less than a decade after its founding
When 30-something Yin Kuo said in a recent interview that he wanted to build his oral care company into the "Procter & Gamble of China," it seemed like a stretch for a firm that only got into the business in 2018 with its Canban brand and didn't start selling toothpaste until 2022. But Yin's Shenzhen Xiaokuo Technology Co. Ltd., backed by powerful investors, took a big step in that direction last week with its application for a Hong Kong IPO, revealing some foamy growth over the last three years.
The company's Canban brand competes in China with P&G's (PG.US) Crest and Colgate-Palmolive's (CL.US) Colgate brands, as well as market leader Yunnan Baiyao (000538.SZ), a traditional Chinese medicine company founded in 1902, with 25% of the market.
Despite its late start, Canban held 9.2% of China's toothpaste market last year, and was the only brand in the top five to boast triple-digit annual growth, at an impressive 231.7%, for offline retail sales of its toothpaste between 2023 and 2025, according to its listing document. The company is part of a massive Chinese toothpaste market that grew at an average rate of 3.7% over the last five years to reach 56.6 billion yuan ($8.23 billion) in 2025.
The toothpaste market's relative maturity doesn't seem like very fertile ground for a newcomer, especially in the context of weak growth for more specialized oral companies like Huge Dental, a maker of dental materials, which also applied for a Hong Kong listing this year. Recently listed dental services companies like Meihao Medical (1947.HK), Arrail (6639.HK) and Dazhong Dental (2651.HIK) have also done poorly, down significantly from their IPO prices, reflecting consumer reluctance to spend on the pricier dental treatments they provide.
Toothpaste is clearly in a different category, ...
