Previous attempts at low pricing were met with supply disruptions by manufacturers! So-young International launches ‘Puerility Needle’ at 2,999 yuan—can its low-price strategy break the deadlock in the medical aesthetics industry?

The medical beauty market has started a "price war."

On September 23, the internet medical beauty platform Xinyang (Nasdaq: SY, stock price $3.72, market value $369 million) officially launched the new generation of "Miracle Youth Injection 3.0," bringing the price of the youth injection down to 2999 yuan, setting a new historical low for the industry. Previously, the average market price of "youth injections" in mainland China was generally above 10,000 yuan.

Behind this significant price reduction is Xinyang's attempt to break the long-standing high-price "vicious cycle" in the medical beauty industry with a low-price strategy. By utilizing self-operated chain clinics and customized supply chains, it aims to shift the industry from a "seller's market" to "mass consumption."

In the view of Jinxing, the founder and CEO of Xinyang, a low-price strategy is also the key to breaking the dilemma in the medical beauty industry. He stated frankly, "If we want to completely eliminate black medical beauty in the Chinese market, we can only make the prices of compliant medical beauty accessible to consumers."

However, reporters from the "Daily Economic News" (hereinafter referred to as "Daily Economic reporters") noticed that at the time this strategy was launched, XinYong was facing performance pressure. In the second quarter of this year, the company's overall revenue decreased by 7% year-on-year, with a net loss of 36 million yuan, turning from profit to loss. XinYong's CFO Zhao Hui stated at the performance briefing that the main reason for the decline in performance was the decrease in the number of medical service providers on the subscription platform's information service.

Jin Xing, founder and CEO of So-young International. Photo source: Li Yutong, reporter from the Economic Observer Daily.

Can So-young International's offline chain business, which is still in the investment phase, shoulder the burden of post-transformation performance? Can its low-price strategy support its ambition to disrupt the industry landscape?

Low-price trials once led to supply cutoffs by manufacturers. Why is So-young International betting on 'Pueraria Mirifica'?

As a regenerative anti-aging medical aesthetic treatment, the core principle of Pueraria Mirifica lies in stimulating the body’s natural collagen regeneration to achieve firming and shaping effects.

In recent years, Pueraria Mirifica has become one of the fastest-growing segments in China’s medical aesthetics market. According to data disclosed by So-young International, the B-end market size for Pueraria Mirifica is projected to reach RMB 4.2 billion by 2025, up from just RMB 500 million when it entered the Chinese market in 2021, indicating rapid market expansion.

Besides market potential, So-young International’s decision to bet on Pueraria Mirifica also stems from its clear therapeutic principles and definitive results. In an interview with the media, including reporters from the Economic Observer Daily, Jin Xing noted: 'In our view, Pueraria Mirifica facials may represent an evergreen and increasingly significant segment.'

However, the launch of the 'Miracle Youth' series was not smooth sailing, as ongoing friction emerged between So-young International and upstream manufacturers.

Jin Xing revealed that versions 1.0 and 2.0 of 'Miracle Youth' utilized products from Pureyan and Saint-Bioma's Aiveilun, respectively. The manufacturers set price controls at RMB 16,800 per vial and RMB 18,800 per vial, whereas So-young International priced them at only RMB 4,999 per vial and RMB 5,999 per vial. Both attempts at low pricing triggered strong backlash from manufacturers, leading Pureyan and Saint-Bioma to issue letters demanding that So-young International stop supplying and remove related products.

To reduce supply chain dependency, So-young International ultimately partnered with Xihong Biotech to develop a customized version of 'Miracle Youth 3.0,' specifically tailored for facial treatments, bringing the price of Pueraria Mirifica down to RMB 2,999 per vial.

How can service quality be ensured under a low-price strategy? Jin Xing stated that So-young International achieves low pricing through economies of scale and low-margin strategies. 'We lower costs by reducing customer acquisition expenses and cutting costs unrelated to treatment.'

In the second quarter of this year, the gross profit margin of So-young International's chain clinics was 24.3%. However, Jin Xing stated that the general gross profit margin in the medical aesthetics industry exceeds 50%. So-young adopts a low gross profit margin strategy with the aim of driving the entire industry toward a positive cycle. "We hope to inspire the industry. Actually, the medical aesthetics industry does not necessarily have to be highly profitable or charge exorbitant prices to maintain a healthy business model."

An Analysis of the Industry's 'Vicious Cycle': How High Prices Push Consumers Toward Illegal Medical Aesthetics?

In Jin Xing's view, China's medical aesthetics industry is trapped in a 'vicious cycle'.

High upstream production costs force institutions to raise prices in order to cover these costs; consumers, deterred by high prices, turn to illegal medical aesthetics services or seek treatment overseas. This ultimately leads to declining industry trust and rising customer acquisition costs, forcing businesses to pass cost pressures onto pricing, which is borne by consumers.

Jin Xing pointed out that the fundamental reason for the widespread and prolonged existence of illegal medical aesthetics in China lies in excessively high prices within the industry. "Compliant products are too expensive, forcing many consumers to resort to illegal medical aesthetics."

To drive the industry into a virtuous cycle, economies of scale across the entire industry are required. Jin Xing stated that as medical aesthetics prices decrease, penetration rates will rise, the consumer base will expand, treatment volumes and product usage will increase, production costs will decline, terminal prices will fall further, and more consumers will be attracted, thereby creating a virtuous cycle.

Currently, the demographic of medical aesthetics consumers and their consumption habits are undergoing significant changes.

Jin Xing revealed that at present, high-end consumers account for 10% of the medical aesthetics market, contributing half of total sales revenue, while the other half is contributed by working women and middle-class women, who make up 90% of the market. This latter segment is also the fastest-growing market.

According to the "2025 Medical Aesthetics Industry White Paper" jointly published by Roland Berger and Meituan Medical Aesthetics, China's medical aesthetics consumer group exhibits a trend of being "youth-led with middle-aged and older groups following closely." The market is transitioning from rapid growth to high-quality development. "Light medical aesthetics," characterized by minimally invasive procedures, quick recovery, and natural results, will become the core driver of industry growth, significantly lowering the threshold for consumer trials. Its share is expected to increase from 50% in 2020 to 64% by 2030.

As observed by reporters from每日经济新闻 (nbd.com.cn), since the beginning of this year, many major internet companies have been increasing their investments in medical aesthetics. On July 14, the first offline medical aesthetics clinic operated by JD Health opened in Yizhuang, Beijing, followed by a second store in Guomao. Meanwhile, Meituan continues to deepen its platform business, with prices for many medical aesthetics projects becoming more transparent and further reduced.

The entry of more large platforms will undoubtedly spark a new round of market competition. In Jin Xing's view, consumers are faced with the iteration between traditional medical aesthetics and new lightweight chains. 'In fact, we welcome more peers to join in and help develop and expand the new format of medical aesthetics chains.'

Offline Business Becomes New Engine Amid So-young International’s Strategic Transition Pains

In November 2024, So-young International announced the launch of its new lightweight medical aesthetics chain brand, 'So-young Youth Clinic.' As of September this year, 37 stores have opened, with 15 more under preparation. The number of stores is expected to exceed 50 by the end of the year, covering 16 cities.

The chain clinic business lived up to expectations and became a new growth engine for So-young International. In the second quarter of this year, revenue from offline operations surged 426.1% year-on-year to RMB 144 million, surpassing online operations for the first time to become the company’s largest revenue source.

However, such aggressive transformation also brought significant challenges. Due to the accelerated contraction of its traditional platform information services business, So-young International’s total revenue for Q2 fell 7% year-on-year to RMB 379 million, resulting in a net loss of RMB 36 million. Jin Xing once admitted during an interview: 'The old business is shrinking while the new one grows, which is reflected in the financial report and marks the toughest phase currently.'

According to Jin Xing, some leading business groups on the platform have completely withdrawn cooperation due to So-young International's decision to open self-operated clinics. However, regarding the necessity of transformation, Jin Xing remains resolute: 'Although the new business impacts the old one, only the new business can ensure greater survival and development opportunities for the company in the future.'

During this interview, Jin Xing also mentioned that the chain business is still incurring losses overall due to the need to bear mid- and back-office costs. However, store-level profitability has been achieved on a monthly basis, and overall profitability is expected to improve as scale expands.

Notably, it is evident from the rapid iteration of products like dermal fillers that So-young International remains relatively passive when facing upstream supply chain challenges while venturing into the chain clinic brand sector.

To take control, So-young International has already begun strategic deployments in the supply chain. On one hand, it secures key equipment and product resources through acquisitions and agency agreements. On the other hand, when asked whether the company plans to develop its own branded medical aesthetic products, Jin Xing explicitly stated: 'Yes, for internal use, and we will also sell to other institutions.'

So-young International is essentially engaged in an 'ecosystem battle.' By reducing prices, opening stores, and laying out the supply chain, So-young International is attempting to explore a sustainable and mass-market path for China’s medical aesthetics industry. Nevertheless, this transition remains fraught with challenges, and So-young International will continue to face dual pressures from the supply chain and costs until it fully builds up its competitiveness.

Source: NBD (National Business Daily)

Author: Li Yutong, reporter of The Paper | Wei Wenyi, editor of The Paper

35K Views