By love-89.com In a recent conversation, we had the opportunity to chat with Lin Ping, a medical aesthetic consultant based in Daxing District, Beijing. She provided some fascinating insights into the thriving industry following China’s National Day holiday. Lin noted, “During the seven-day holiday, I was bombarded with nearly a hundred inquiries each day. Since October 1st, our appointment numbers have skyrocketed, and our team is finding it hard to keep pace.”
Typically, Lin’s clinic would manage just a handful of inquiries daily, with a slight increase on weekends. However, ever since the Mid-Autumn Festival, they’ve been booking near-capacity every day. As chatter around medical aesthetics surged on social media platforms like Xiaohongshu, users began sharing their “Holiday Beauty Plans,” while companies, especially Meituan, rolled out hefty discount initiatives like the “100 Billion Subsidy.”
Yet, the excitement isn’t universal. Before the holiday, Shanxi Jinbo Biotechnology publicly criticized Meituan for including their product, Weiimi, in a promotional campaign without proper authorization. They alleged that some vendors offering Weiimi’s water-based hyaluronic acid injection lacked the necessary certifications, despite the product’s unique status as the only type III medical device approved by the Chinese National Medical Products Administration.
Interestingly, Weiimi was being sold on Meituan at a significantly lower price than the market guide price. While it was listed for as low as 1,380 yuan per bottle—compared to a suggested retail price of 6,800 yuan—a merchant we spoke to confirmed their authorization to sell weiimi and assured us of the product’s authenticity through a QR code verification system.
When we raised the issue of the steep price differences, a representative from Jinbo told us, “We only provide a suggested retail price. Once the product reaches clinics, they determine their own sales strategies.” This statement highlights a growing tension within the industry as companies wrestle with pricing strategies that could threaten their profit margins.
Moreover, Jinbo’s conflict with Meituan isn’t an isolated case. Earlier this year, Jinbo accused another medical aesthetic platform, Xinyang Technology, of distorting market prices by advertising Weiimi below legitimate rates. While Jinbo denies enforcing price controls, the consistent drop in retail prices has sparked worries about the long-term viability of their profit margins.
As competition in the medical aesthetics field escalates, more companies are venturing in, with several focused on developing type III medical devices. For example, Jiangsu Chuangjian Medical Technology has recently announced its initial public offering (IPO) application, alongside a robust year-on-year revenue increase of 61%. This growth trend aligns with other players like Huaxi Bio and Jiangsu Wuzhong, which are also expanding their product offerings and research and development efforts.
However, this competitive environment poses challenges for established brands like Jinbo. With new products flooding the market, managing consumer pricing has become crucial. Recent financial disclosures from various companies show a growth slowdown compared to prior years. For instance, Huaxi Bio reported an 8.61% revenue decline in the first half of 2024 against the same period last year, signaling an end to its rapid growth phase.
While upstream manufacturers are feeling the weight of pricing pressures, mid-range medical aesthetic institutions and online platforms are also facing hurdles in attracting and retaining customers. This dynamic has triggered a price war, with group buying platforms inundated with offers for skin treatments starting at just 9.9 yuan.
However, the sustainability of this pricing approach is questionable. While platforms may benefit from absorbing marketing costs, many medical aesthetic institutions are finding it difficult to preserve healthy profit margins. “Offering low-cost group purchases can bring in more clients, but it also diminishes the average revenue per customer,” explained a practitioner from a Beijing clinic.
Financial data shows that while some companies like Huakan and Langzi boast gross margins of 42.67% and 59.78%, respectively, their net profit margins remain surprisingly low. This trend, coupled with increasing consumer skepticism regarding low-cost medical procedures and services, raises significant concerns about the effects of price-driven competition on quality and safety in the industry.
For many consumers in search of budget-friendly aesthetic options, the risks tied to low-cost services could ultimately translate into higher costs concerning safety and satisfaction.