China Aesthetic Medicine Market Outlook Report

The report

China Aesthetic Medicine Market Outlook Report was released by Deloitte China Life Sciences & Health Care (LSHC) Team and Meituan, examining the different aspects of China's aesthetic medicine industry, including consumer demand, value chains, marketing approaches, and financing sources. The report also reveals five prevailing trends that will drive industry development, with "light" aesthetic medicine becoming a strategic focus. Regulatory reform and reshuffling are set to reshape the market landscape by raising quality and practice standards, as the sector enters a mature phase of development.

Viewpoints / key findings

In China, underpinned by the steady growth of consumer disposable income, consumer acceptance of aesthetic medicine consumption has gradually been boosted under the dual influence of consumptionupgrading phenomenon and increased consumer awareness due to novel digital media marketing advancements. As the overall scale of aesthetic medicine market continues to expand, the government has constantly introduced policies to support the standardization of the aesthetic medicine industry. After experiencing the peak period of investment and equity financing, capital markets has further accelerated industry consolidation.


Main observations:

China's aesthetic medicine market growth rate is higher than that of the global market. Although the growth rate has slowed down lately, the relatively low market penetration still present enormous room for future growth in Chinese market.

From 2015 to 2019, the global aesthetic medicine market grew steadily, with a compound annual growth rate (CAGR) of around 8.2%. China market grew from RMB 64.8 billion in 2015 to RMB 176.9 billion in 2019 – an impressive 28.7% CAGR. The domestic market is poised to grow at a 15.2% CAGR between 2020 and 2023 (versus 7% globally), following a period of adjustment. In 2019, the market penetration rate in China is 3.6%, much lower than it is in Japan, the United States, and South Korea.

Aesthetic medicine segmental consumer groups are dispersed across different dimensions, by means of region, age, gender, consumption capacity, etc. Categories and products of consumption varies, of which non-surgical items are the most popular options due to their high consumer stickiness and strong consumer inertia to repurchase.

In general, the industry is more popular in southern cities compared to northern cities. Women aged 20-35 are the main driver of consumption, but mature female consumers have higher average spending levels. Increasing popularity of skin management and anti-aging management products such as hair removal, acne removal, photorejuvenation, picosecond lasers, thermage, etc.

With the gradual resumption of normal activities in the second quarter of 2020, the consumption enthusiasm has rebounded significantly. At the same time, the experience of COVID-19 outbreak also accelerated the process of digitalisation of the aesthetic medicine industry, and is expected to reshape the industrial chain.

Traditionally aesthetic medicine institutions have faced high customer acquisition cost, while customers have found decision-making difficult due to the opacity of information. The internet has, to a certain extent, solved these two problems. By including upstream suppliers into the online ecological system of aesthetic medicine, an integration the industrial chain can be achieved in the future.

Aesthetic medicine institutions are becoming more rational in the selection of access-to-market channels and delivery platforms, whilst increasing adopting high precision and more refined marketing methods to value-maximise the input-output effect. In general, growth in advertising spend were seen on all kinds of vertical aesthetic medicine apps, self-media and comprehensive integrated e-commerce platforms.

Historically, medical aesthetic institutions mainly used traditional advertisements and search engines to gain customers, this lead to crude matching. And the customer acquisition cost of Baidu's channel increases day by day, while the ROI drops year by year. On the other hand, due to their high-precision marketing, the ROI of medical cosmetic customer acquisition platforms (such as Meituan Aesthetic Medicine, So-Young, Tmall Aesthetic Medicine, etc.) is increasing year after year.

After the rapid development during the past few years, the middle and lower streams of the aesthetic medicine industrial chain have entered an integration period, and the strengths of the top industry players are gradually becoming clearer. 2019-2020 has seen several leading aesthetic medicine companies successfully achieving capital market listing across upstream, midstream and downstream value chain segments.

From 2016 to 2018, the aesthetic medicine industry witnessed a peak in investment and financing. According to (incomplete) statistics, in 2018, there were 19 financing events, raising RMB 2.2 billion. Impacted by increasing regulatory supervision and cooling capital markets, the amount of the financing capital raised fell to approximately RMB 250 million in total in 2019 – an 89% year-on-year decline. The past few years has seen their rapid development and the middle and lower ends of the aesthetic medicine industry chain (especially the downstream link) have become entrepreneurial hot spots.


Key emerging development trends:

Under the context of industry concentration, regulatory policy improvement as well as the remodelling of internet and new media channel platforms, we anticipate that Chinese aesthetic medicine industry will display the following key emerging development trends:

  • Industry reform and reshuffling will reshape the aesthetic medicine industry landscape pushing it to gravitate towards higher quality and practice standards. Large-scale nationwide shake-out of illegal aesthetic medicine businesses will pave way for critical industry transformation, eliminate fierce lowballing price competition, and re-generate market room for legitimate aesthetic medicine players to penetrate and tap into.
  • Most aesthetic medicine institutions will further develop through adopting standardized and reproducible store operation model. Most Chinese aesthetic medicine institutions will strategically develop towards light aesthetic medicine. Aesthetic medicine chain brand institutions will simplify their categories of light aesthetic medicine products, create standardized SKUs and service processes, and facilitate the expansion of chain stores and online marketing.
  • Other aesthetic medicine institutions will further develop through adopting high specialisation model. Some aesthetic medicine institutions will continue to concentrate on cutting-edge plastic surgery and high-end light aesthetic medicine categories, improving technology standards and forming the barriers to entry, to maintain a leading position in the industry and improve their profit margin.
  • Proliferation of innovative digitalisation tools will improve industry transparency and information quality for aesthetic medicine consumers. Aesthetic medicine institutions and suppliers are recommended to rapidly embrace digital innovations within its core marketing strategy and adapt swiftly to new ways to connect with end-market customers in order to achieve higher precision marketing and to remain "current" in the eyes of highly informed and increasingly rational consumers.
  • Sustained level of interests in M&A opportunities will continue in the aesthetic medicine industry with institutional investors of leading companies seeking to achieve capital market exits. It is expected that high market valuation multiples and relatively positive and robust post-listing secondary market performance will continue to stimulate interests in pre-IPO M&A activities as well as strategic acquisitions to create integration synergies and maximise shareholders' wealth in the aesthetic medicine industry.


The outlook for China's aesthetic medicine market remains positive. A host of factors such as increasingly rational consumers, diversified product offerings, a robust regulatory environment, more targeted marketing channels, and the increasing number of qualified doctors, will deliver more premium products and services, thereby enabling price differentiation. Growing demand for aesthetic medicine and general aspirations for well-being and beauty will become cornerstones of the market ecosystem's long-term development.

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