Frost & Sullivan releases 'Overview of the Sleep Digital Therapy Industry in China 2024'

In the 1990s, Cognitive Behavioral Therapy (CBT) was widely applied to the treatment of insomnia and integrated methods such as sleep restriction and stimulus control to form Insomnia Cognitive Behavioral Therapy with Internet (CBT-I). After entering the 21st century, with the development of new-generation information technologies such as the Internet, Internet of Things, and artificial intelligence, digital technology began to be widely applied in the field of healthcare. These technologies have provided new solutions for the treatment of insomnia, namely Digital Insomnia Cognitive Behavioral Therapy with Internet (dCBT-I).

In 2004, STRÖM and others conducted the first randomized controlled trial study of dCBT-I for patients with insomnia, confirming its effectiveness. Subsequently, a large number of dCBT-I platforms were developed for the treatment of insomnia, such as BetterNight Insomnia, CBT-I Coach, DREAM, Minddistrict, Night Owl, RESTORE, SHUTi, Sleepio, SleepRate, iREST. Among them, Somryst is the first commercial product derived from SHUTi that has been authorized by the US Food and Drug Administration for the treatment of chronic insomnia in adults.

In recent years, domestic approval has been granted in successionAndroid systemWe have developed a series of DCBT-I platforms for mobile applications, WeChat, etc., and their efficacy and safety have also been well verified. In addition, the effectiveness of the application Calm developed based on dMBTI has been confirmed.

According to the Social Psychology Research Center of the Institute of Sociology at the Chinese Academy of Social Sciences, in 2023, 63.7% of respondents went to bed between 10 p.m. and midnight, 71.2% got up between 6 a.m. and 8 a.m., and 48.2% could fall asleep within about half an hour; the average sleep duration per night was 7.37 hours, which is the same as in 2022.

Residents in 2023sleep indexIt is 62.61 points, a decrease of 5.16 points compared to 2022 and 2.17 points compared to 2021. At the same time, the change in the residents' sleep quality index is the largest, falling by 4.8 points compared to 2021 and 7.5 points compared to 2022.

With the continuous acceleration of social rhythm and pressure, sleep disorders are becoming increasingly prominent, with the number of diagnosed insomnia cases globally increasing year by year. From 2019 to 2023, the number of adult insomnia patients in China increased from 263 million to 290.214 million, with an annual compound growth rate of 2.5%, accounting for about one-fifth of the total population; it is estimated that by 2028, the number of adult insomnia patients in China will increase to 320 million. With people's increasing attention to sleep issues and the annual rise in the number of diagnosed insomnia cases in China, the demand for sleep digital therapy is showing a steady growth trend.

From 2021 to 2023, the market scale of China's sleep digital therapy industry increased from 0.2 billion yuan to 0.9 billion yuan, with an annual compound growth rate as high as 111.6%. It is expected that by 2028, the market will further grow to 3.46 billion yuan, with a compound annual growth rate of 109.7% from 2023 to 2028.

In the past few years, with the improvement of national health awareness, the upgrading of product manufacturing technology, national policy support, and the upgrade of consumer spending, China's sleep economy market has developed rapidly. Sleep hygiene education, relaxation training, and stimulus control therapy included in CBT-I were listed as Level 1 recommendations in the 2017 edition of the 'Guidelines for the Diagnosis and Treatment of Adult Insomnia in China', boosting the rapid development of the sleep digital therapy market. However, consumers at the end-user level still have a relatively weak awareness of purchasing software.

In the future, as patient acceptance continues to improve and business models shift towards a model where enterprises operate hospitals, healthcare institutions and hospitals may become the main adopters and providers of digital therapies. This will help enhance the overall safety and effectiveness of digital therapy products, further increase the application penetration rate of digital therapies, and drive rapid industry growth.

The sleep digital therapy industry chain consists of three main segments: upstream technology research and development and equipment manufacturing, midstream digital therapy platforms and software development and service operations, and downstream medical institution applications and patient services. The upstream is responsible for technological innovation and equipment production, the midstream focuses on platform construction, software development, and service promotion, while the downstream is responsible for applying digital therapy services to clinical practice, directly serving patients. These three segments work together to promote the coordinated development of the entire industry chain.

Software is the core carrier of digital therapeutics. Through software programs, digital diagnostic and treatment measures based on evidence-based medical evidence can be provided to patients, including psychological education, relaxation training, stimulus control therapy, sleep restriction therapy, cognitive therapy, etc., to help patients improve their sleep quality. Software and platform development are important forces driving technological innovation in sleep digital therapeutics. With continuous technological progress, new software platforms and treatment methods will emerge continuously, providing more options for patients with sleep disorders.

Chinese softwareThe operation of information technology service industries has been steadily improving. From 2014 to 2023, China's software business revenue increased from 3702.6 billion yuan to 12325.8 billion yuan, achieving 6235 billion yuan in revenue in the first half of 2024, showing a steady upward trend overall. Among them, the total profit of the software industry in the first half of 2024 was 734.7 billion yuan, a year-on-year increase of 15.7%; software business exports were 25.46 billion US dollars, a year-on-year increase of 0.6%, reversing the negative growth rate.

The stable development of upstream software services has promoted industry innovation and development, as well as remote medical care and health management, contributing to the progress and development of the entire industry.

Over the past 20 years, research related to sleep has developed rapidly, and the clinical implementation of sleep-related issues has improved. According to data from the China Clinical Trial Registration Center, since 2020, a total of 384 clinical trials related to sleep and insomnia have been conducted using non-drug treatments, including digital therapy, cognitive behavioral therapy, sound and light stimulation, and exercise. Among these, the number of non-drug sleep problem clinical trials increased from 41 in 2020 to 97 in 2023, with an annual compound growth rate of 33.2%. As of September 19, 2024, 84 trials have been conducted, showing an overall upward trend.

The cost of digital therapy trials is much lower than that of traditional drugs, driving further development of the industry. Firstly, digital therapies start directly from clinical problems and hardly involve preclinical research related to animal experiments, saving a significant amount of development costs and time. Secondly, from hypothesis formulation, experimental design, to the trial process and follow-up analysis, every step is based on data analysis and statistics, eliminating the need for dose testing, pharmacokinetics, and toxicological analysis in traditional drug clinical trials, which can further reduce costs.

In the new era of information bombardment and rapid development of short videos, consumers' channels for obtaining information have also diversified. 40.8% of Chinese consumers learn about sleep products through comprehensive e-commerce platforms, followed by short video platforms and content-sharing platforms, with 38.4% and 36.3% of consumers respectively.

In terms of purchasing channels, nearly half (47.3%) of consumers purchase sleep aids through comprehensive e-commerce platforms. Comprehensive e-commerce platforms remain the main channels for promoting and selling sleep aids, while other platforms are gradually being penetrated.

With the continuous progress of technology and the increasing demand for healthy sleep, more and more enterprises are turning their attention to the field of sleep digital therapy and launching a series of innovative products.

In 2020, as the world's first prescription digital therapy (PDT) for chronic insomnia patients, the application software Somryst developed by Pear Therapeutics received FDA authorization. It can provide behavioral intervention therapy to individuals aged 22 and above with chronic insomnia to improve symptoms of sleeplessness. The approval of this product has attracted many manufacturers to enter the sleep digital therapy market. Representative Chinese companies include: Zheng'an Technology, Mumin Medical, and SuiMian Technology. Among them, Zheng'an Technology's Ruomian AI Therapist replaces doctors for online diagnosis, using chatbot dialogue to provide 42 sleep adjustments, evaluate, monitor, and adjust treatment plans for users, applying CBT-I for treatment; Mumin Sleepower innovatively introduced music therapy, which has a natural and good effect on users' emotional management, enabling them to enter a better sleep state.

In the future, with the further implementation of medical logic and the improvement of product interactivity and compliance, the industry will be further upgraded and iterated.

In modern society, with a fast pace of life and high work intensity, sleep problems are prominent due to various factors such as work and life pressures, mobile phone interference, and excessive information. Consumers' demand for various sleep aids and products that improve sleep quality has increased, bringing business opportunities to the sleep economy industry.

In recent years, China has seen a continuous increase in the number of patents in the field of sleep-related products. The scientific, quality-oriented, and intelligent upgrading of products has brought consumers a more comfortable usage experience. Since 2016, there has been a significant new trend in the number of 'sleep' related patents in China, especially in 2020 and 2021, with 2,734 and 2,867 patents respectively. These patents cover a wide range of fields, including but not limited to advanced sleep monitoring systems, intelligent sleep aid devices, as well as more user-friendly and fully functional bedding products such as pillows and mattresses. This series of innovations has not only promoted the prosperous development of the sleep economy market but also brought unprecedented comfort and health protection to consumers, driving the development of the sleep industry.

Digital therapy for sleep disorders is a solution to sleep problems based on the theories of psychology and mental illness, grounded in the underlying logic of CBT-I therapy. It utilizes cutting-edge technologies such as information and digital technology, wearable devices, and app-based solutions.

Based on the business and post-launch promotion of products by major sleep digital therapy companies at home and abroad, the current business models of sleep digital therapy companies mainly include four types: medical cooperation model, corporate (organization) group payment model, membership-based payment and peripheral product development model, and smart hardware entry model.

• Medical cooperation model: It can quickly reach the patient population, improve product acceptance by leveraging doctors' professionalism and trust, and feedback from hospitals and doctors helps with continuous optimization and improvement of the product;

• Enterprise (organization) group payment model: It can concentrate resources to serve large customers, improve product usage and satisfaction. Moreover, the stability and long-term nature of group customers help form a stable source of income;

• Subscription-based payment model: It can build user loyalty and form a stable membership base. The development of related products can increase product added value and user purchasing intentions.

• Intelligent hardware entry model: It can intuitively display users' sleep status, improve user experience and satisfaction, and the sale of hardware devices can also bring a stable source of income to digital therapy products.

Somryst, developed by Pear Therapeutics, is the first prescription digital therapy (PDT) approved by the FDA for the treatment of chronic insomnia. Its commercial loop starts with therapeutic tools, undergoes clinical testing, obtains medical device registration, is then sold to healthcare institutions, and receives payment from medical insurance or commercial insurance. However, in the short term, digital therapies in China are still biased towards the self-funded market, and further development of medical insurance coverage remains necessary.