Deloitte Consulting and Allergan Aesthetics

In recent years, the medical aesthetic market in China has developed rapidly, and competition is fierce. Along with the accelerated reshaping of the segment, compliance and regulations to the industry are repeatedly brought to the public's attention. At the same time, pandemic outbreaks also bring uncertainty to the industry. In view of the complex marketplace and fierce competition, how upstream manufacturers and medical aesthetic service providers precisely understand the core needs of medical aesthetic users and build trust while meeting the regulatory requirements will be the key to winning the market in the next round.

Allergan Aesthetics partnered with Deloitte Consulting to conduct in-depth researches and multi-angle interviews with medical aesthetic institutions in 23 cities, more than 400 customers, and multiple core professionals. Based on the interviews, the two parties combined their long-term research and insights of the industry to present "China: Medical Aesthetic Industry Outlook 2022". The report consists of Status quo of China medical aesthetic industry, Medical aesthetic institution features and user portrait, and City portrait. Through these three perspectives, the report analyzes the China medical aesthetic market and customer demographics development trend and explores the construction of a benign ecosystem as well as the strategies for sustainable development of the industry.  

“China: Medical Aesthetic Industry Outlook 2022” report is officially released today.

Below are excerpts from the report

I. Status quo of China medical aesthetic industry

Owing to an uptick in the overall consumption capacity, consumer awareness around medical aesthetic is accelerating in China, with the development of innovative technologies fueling the market. The core issues that the China medical aesthetic market will face in the next development cycle will be around how to deal with constraints, including the massive shortage of professional talent, and the urgent need to improve the industry standardization level.

This white paper provides an overview of the China medical aesthetic industry’s history, a preliminary discussion on the key factors hindering the industry's penetration while refining the core drivers, and finally, a multi-dimensional glimpse of the current status quo and upcoming trends in the China medical aesthetic industry:

• China medical aesthetic market maintains a relatively high growth rate

After approximately 90 years of development, China medical aesthetic industry is booming, with impressive results achieved under the joint efforts of medical aesthetic practitioners. Looking back at the past five years, the growth rate of the China medical aesthetic market has continued to lead the global growth rate. Although the growth rate this year will be limited due to the impact of the pandemic, we believe that the demand of Chinese consumers is still sufficient and will be gradually released as the epidemic eases, and is expected to maintain a growth rate of more than 10% in the future.

• China medical aesthetic industry development: Major drivers and challenges

Sufficient increasing room for penetration rate, continuously improving Chinese consumption level, and iterated and innovating medical aesthetic products and technologies are the main drivers for the China medical aesthetic industry development.

Shortage of professional practitioners, incomplete and unregulated professional training system, and inadequate market and service compliance are the major challenges. However, we have seen more medical institutions embracing supervision and proactively promoting a more regulated environment during our investigation.

• Compliance enhancement as the core

Legislative and law enforcement authorities are shifting from passive response to active governance when handling upstream manufacturers, downstream medical aesthetic institutions, and promotion platforms. In addition to cracking down on illegal operations, they are working towards establishing sound standards and systems to fill the regulatory gap.

II. Institution features and consumer portrait

As the beauty economy soars, medical aesthetic institutions and upstream companies within the industry are focusing on insights into the trends and characteristics of consumer behaviors to accurately identify target customers and determine their goals. In our research, we found that China medical aesthetic consumers have the following characteristics:

1. Medical aesthetic consumers cover all age groups. In the mature consumers, “Gen Z” accounts for over half. Mature consumers value high quality and have personalized demand. They spend an increasingly large proportion of their income on medical aesthetic.
2. Male consumers increase rapidly. They actively seek medical aesthetic solutions and gradually unlocking their consumption potential. This may usher in a new lucrative segment.
3. In the China medical aesthetic market, most consumers are from the first tier and new first tier cities. There remains vast room for growth in the lower-tier city market, but such market features low medical aesthetic penetration rate, insufficient professional talent, acquaintance society, and price sensitivity. Medical aesthetic brands and institutions need to deeply cultivate such market to improve and realize its potential.
4. With evolving aesthetic awareness and advancing aesthetic medical technology, non-surgical medical aesthetic is increasingly favored by consumers. Different age groups have sharply different attitudes towards new products and services. Most consumers are not willing to try new things, and of those willing to try the new, most are young people.
5. Currently, medical aesthetic consumers are more rational when making consumption decisions. They value brands and professional services, and can fully assess treatments and institutions with various sources.
6. The consumers surveyed stated that they would be more trustful and confident about medical aesthetic if a professional consulting session could be provided.

Growing demand has created a fragmented market. Currently, the China medical aesthetic players are very diverse, with private institutions keeping the dominant position while the public hospitals secure less than 20% of the medical aesthetic market, indicating a great development potential under the guidance of the new trend.

The blooming of medical aesthetic institutions will inevitably lead to fierce competition. Growing demand, regulation, and technological innovation will be the main influencing factors for medical aesthetic institution development. Undersetting their own positioning and advantages, the medical aesthetic institutions should also consider customer demand, improve efficiency, and fine management to breakthrough customer acquisition and retention difficulties. This report analyzes institutions’ core customers, product layout, daily operation and innovative models to formulate comprehensive future development strategies for medical aesthetic institutions.

III. City portrait

Different geographic locations, customs, cultures, and political orientations have medical aesthetic consumers and institutions with unique characteristics across regions. Allergan Aesthetics' business consulting team summarized the characteristics of nine cities by city level and maturity of medical aesthetic market, based on survey and interviews with consumers and institutions in Beijing, Shanghai, Hangzhou, Chengdu, Guangzhou, Shenzhen, Xi'an, Zhuhai and Quanzhou.

For more city portraits, please refer to the full report.

Throughout China medical aesthetics industry, diversification of consumers, fierce competition in products and market, the impact of the pandemic, and regulatory constrains are all driving the reform and innovation of the medical aesthetic industry.  We believe that “China: Medical Aesthetic Industry Outlook 2022” can bring new inspiration to the industry professionals and help all to better grasp the development opportunities of the medical aesthetic industry.