Has the Aesthetic Medicine Market Seen the End of Its Fierce Growth?

By Ada Wang

In recent years， the consumer medical industry represented by aesthetic medicine has become one of the new growth points of consumption.

According to the 2022 White Paper on the Aesthetic Medicine Industry （hereinafter referred to as the White Paper） jointly released by the SoYoung Data Research Institute and the SoYoung Institute of Beauty Commerce， the growth rate of Chinas aesthetic medicine market significantly slowed in 2022. Besides the impact from the pandemic， the aesthetic medicine market has also seen many changes， with consumers traditionally partaking in the industry maturing and growing up. Declining prices made aesthetic medicine become ordinary product services instead of luxury procedures. The industry focus has shifted from over-marketing to compliance， and the era of extensive growth for the aesthetic medicine market may have come to an end.

Significant changes in the aesthetic medicine industry

“At present， there has been no annual report about the aesthetic medicine industr y issued by authoritative research institutes， but from monitoring the e-commerce data， last year both the whole-internet GMV （gross merchandise volume） and number of orders of the aesthetic medicine decreased， the first decline for the industry in the past two decades.

In 2022 Chinas aesthetic medicine market saw a contraction and its first negative growth in 20 years， so in the year 2022 the industry really felt the bite of poor growth，” Jin Xing， Chairman and CEO of SoYoung Group， said. Jin also mentioned that in 2022， Chinas aesthetic medicine market was affected the pandemic and many other factors， and the industry has undergone significant changes.

The year 2022 is also a difficult year for the financing of Chinas aesthetic medicine industry. The number and amount of financing in the primary venture capital market have declined significantly. According to notes of the aesthetic medicine industry， there were 35 investment and financing events in the industry in 2021， with a total financing amount of about RMB 18.934 billion. By comparison， the financing amount in the first three quarters of 2022 was only RMB 1.104 billion.

On top of that， according to the White Paper， the difficulties and costs of acquiring clients will only increase for aesthetic medicine institutions， which are at the center of the industry. Some of the institutions will find it difficult to make ends meet and investors of the primary venture capital market feel less confident about companies involved in the aesthetic medicine industry. In 2022， there were only three investment and financing events involving aesthetic medicine institutions.

As the White Paper pointed out， during the pandemic the per customer price of aesthetic medicine consumption has been rising， but surgery and optoelectronics consumption has seen a decline of the per customer transaction amount for years. As chain stores become popular and technology further improves， the per customer transaction of aesthetic medicine consumption will only decrease further year by year. The development of the industry will offer more price discounts for consumers. When it comes the transaction amount per customer， the photoelectric programme is the lowest， much lower than other programs in the aesthetic medicine market.

Regarding the structure of Chinas aesthetic medicine market， the White Paper also pointed out that the market has shifted its focus from surgical services with high decisionmaking costs to non-surgical services with high frequency but low costs.The non-surgical platform aesthetic medicine services have taken an overwhelmingly large share of the market. In 2022， transaction data showed that non-surgical medicine projects accounted for 84% of the total transactions.

In fact， the online transaction volume of non-surgical programs has been growing for the past five years， up by 22% compared to 2017. At the same time， according to a survey done by SoYoung Data Research Institute during January to February 2022， whether it is a small and medium-sized aesthetic medicine institution with a floor space of less than 2，000 square meters， or a large chain aesthetic medicine institution with a floor space of more than 10，000 square meters， the non-surgical programs contributed more sales revenue than that of the surgical programs.

At the same time， the light aesthetic medicine market has grown against the trend， and the proportion of online orders on the SoYoung platform has reached 84%. The GMV of the anti-aging category， the injection molding category and the regeneration category of the light aesthetic medicine industry have grown by 56.2%， 113% and 28 times respectively in the past 3 years. As consumer demands become increasingly diversified， the industry produced many new growth points， especially the light aesthetic medicine sector. This will lead to the redistribution of the whole industry.

It is worth mentioning that in recent years， with the rapid development of the aesthetic medicine industry， some operators sought out false publicity on honorary qualifications， product efficacy and plastic surgery effect， in order to seek illegitimate benefits. Such illegal acts have caused widespread concern.

According to industry analysis， Chinas aesthetic medicine market has a broad prospect， but due to the unstable foundation and uneven structure， market chaos and customer complaints are often seen in the industry. To better regulate the development of the industry， China has kept carrying out special actions against illegal aesthetic medicine in recent years. As consumers tend to become more rational and more regulations are introduced， Chinas aesthetic medicine industry is expected to enter a new phase of standardized development.

Seven major development trends

Due to the effects as a result of multiple factors such as strict regulation， technological progress and the exit of investors， Chinas aesthetic medicine industry has undergone tremendous changes in recent years. The White Paper points out that with the changes in the structure of Chinas aesthetic medicine market， the industry will present seven major trends in the next decade：

The first is the big chain. As the industrial focus has concentrated on both non-surgical medical product technology and also equipment technology， aesthetic medicine institutions are less dependent on doctors. The whole industry is embracing the big chain.

The second is large capital. As talent structure will not be a limiting factor and the threshold of joining the chain store of aesthetic medicine institutions is lowered， Chinas aesthetic medicine industry will attract billions or even trillions of RMB worth of investments.

The third is big brand. In the era of big capital， only the aesthetic medicine brands with high value and better quality can transform consumer loyalty into consumption behavior.

The fourth is better compliance. With the growing maturity of the aesthetic medicine brand and more comprehensive and strict supervision of the industry， the era of full quantity marketing of the aesthetic medicine industry will come to an end.

The fifth is inclusive benefit. In the era of great compliance， overpricing in the marketing process by using the natural asymmetry of information of aesthetic medicine will be suppressed. Meanwhile， with the popularity of chain stores and progress from technology， the per customer price of the aesthetic medicine consumption has been decreasing year by year. An era of large benefits will materialize.

The sixth is mature consumers. As the aesthetic medicine industry sees the trend of large chain， big capital， large brand， better compliance and more inclusive benefits， the penetration rate of the industry will keep growing. The study found that people aged between 35 and 45 constitute the bulk of consumers of the aesthetic medicine industry.

The seventh is the dual technologies， dual brands and four driving engines. As regulations become more strict， the space for over-marketing by information asymmetry has become increasingly small. Doctor technology， product and equipment technology， doctor brand and institutional brand jointly constitute the four dimensions that consumers consider when making consumption decisions.

Jiang Hua， President of the Chinese Society of Aesthetic and Plastic Doctor of Chinese Medical Doctor Association， said that we are optimistic about industrial development in the long run， because of Chinas huge market and large population. The recent surge in cosmetic and plastic surgery may be caused by the release of demands accumulated during the pandemic. It is unclear what will happen with the trend of the aesthetic medicine industry in the short term， as it will depend on the economy. However， no matter which phase of development the country is in， the aesthetic medicine industry will not develop without doctors. So it is critical to enhance the training of professional plastic surgeons.

“The capability of the internet is most important in the aesthetic medicine industry， as it is able to solve the issue of information asymmetry， quickly reach consumers and improve overall decision-making efficiency. The real feeling of consumers comes from the treatment and services provided by offline institutions and online service cannot solve the contract performance offline. There is also the issue of supply chain. How to ensure the best products are used by institutions. These issues shall be better solved in the industrial chain.” Jin Xing said that the future will be an era of increased efficiency and higher speed for the aesthetic medicine industry， and it is imperative to work towards the goal through the means of the industrial internet.