"Beautiful" industrial chain expansion of medical equipment supplies is the main profit point

Release date: 2016-06-20

With the rise of “net red economy” and “yan value economy”, China's medical and beauty market broke through 500 billion yuan in 2015 and will maintain double-digit growth rate. Many parties expect that China's medical and beauty industry will reach 1 trillion yuan in output value by 2020, surpassing Brazil to become the world's second largest market. However, there are heavy equipment consumables, light service technology, and small market confusion.

The rapid increase in the number of beauty people is due to the superposition of personal needs and social needs. According to DEV statistics, the proportion of corporate employees, civil servants and businessmen in the beauty crowd in 2015 is as high as 70%. The high value often means the convenience of work and mate selection. Choose the advantage.

However, in the beautiful industrial chain, the main profits of Chinese enterprises are still concentrated in the upstream links such as equipment consumables. Due to the lack of market supervision and the gap between quality and technology, the terminal services market has a small scattered pattern.

Breaking through 500 billion: is expected to become the world's second largest market

“In 2015, China’s medical and aesthetic income reached 500 billion yuan, accounting for 20% of the global market of more than 3 trillion yuan.” On April 26, Bohai Biotechnology (hereinafter referred to as “Bohai Biotechnology”) executive director and general manager Wu Jianying told reporters of the 21st Century Business Herald that the medical and beauty industry is entering a period of rapid growth as people's incomes begin to pursue quality of life.

China Cosmetics and Plastics Association even predicts that by 2019, the medical and beauty industry will reach 1 trillion yuan, which is expected to surpass Brazil and become the world's second largest market. During this period, according to Huatai Securities (16.340, -0.47, -2.80%), the compound growth rate from 2015 to 2020 was between 12.3% and 39.1%.

The above market value calculation comes from comparison with the plastic benchmarking country Korea. In 2014, the total output value of Korean medical and beauty was 63.4 billion US dollars, accounting for 4.6% of GDP, and the number of beauty treatments for thousands of people was 19.49. The population of China was 26 times that of South Korea. The number of beauty treatments for thousands of people was only 4.6 times. .

Practitioners have also achieved rapid growth. Jiang Hua, vice president of the Association of Beauty and Plastic Surgeons of the Chinese Medical Doctor Association, said, “At present, the number of medical practitioners has grown from 200 to 400,000 to 500,000.”

The increase in the number of beauty cosmets in China is due to the superposition of individual needs and social needs: for professionals, high value brings convenience to work and increases the priority of choice. According to DEV statistics, the proportion of corporate employees, civil servants and businessmen in the beauty crowd in 2015 was as high as 70%. In terms of social demand, due to the prevalence of the Internet, interpersonal communication is becoming more and more virtualized, fast-food, socializing, and the phenomenon of “leftover women” is prominent. It is easier to produce a "good for yourself" mentality.

In addition to the increase in market and the increase in the number of people, Wu Jianying's set of data reveals another segment of the future development of medical beauty. From 2014 to 2018, the global growth rate of total medical beauty revenue was 8%, of which the growth rate of surgical projects was 5%, and the growth rate of non-surgical items was 12%.

He explained: "Medical beauty is a comprehensive concept, including diet, rehabilitation and micro-shaping, plastic surgery (surgery), etc. At present, due to the safety of micro-shaping, the operation is less difficult than surgery, and the customer acceptance is higher, so it is better than other segments. The growth rate is faster."

This trend is consistent with the global market. In developed countries, the proportion of non-surgical beauty is significantly higher than that of surgery and beauty, generally more than 80%.

However, in developing countries represented by China, the proportion of micro-shaping is much smaller than that of surgery and beauty, which is about twice as low as that of the international. According to Wu Jun, executive director of JPMorgan's investment banking department, in 2015, China's medical and beauty market accounted for 34% of the total market size. He expects this number to reach 46% in 2019, and from the total number of treatments, the proportion of minimally invasive It will grow from 67% in 2015 to 75% in 2019.

Wu Jun believes that “after the continuous introduction of foreign advanced technology and materials, simple, safe and painless medical beauty methods will gradually flow into China, which will drive more people to join the beauty army.”

Micro-shaping will also extend the age span of the beauty population.

“Micro-shaping has high-frequency, high-priced, customer-adhesive and other consumer attributes. At present, the age distribution of Chinese medical and beauty customers is still limited to 25 to 35 years old. In the future, people over 35 years old will become the main force of medical and beauty consumption, and bring huge Industry space. This is also in line with the development of mature markets such as Europe, America, Korea and Taiwan." Wu Jun said.

“beautiful” industry chain: equipment consumables are still the main profit point

Unlike the medical industry with high barriers, strong professionalism, and difficult access to external capital, consumers in the medical and aesthetic industries have strong consumer desires and do not involve medical insurance. There is no need to compete for internal resources of public hospitals, and the channels are relatively loose and diverse. The marketization of medical beauty is relatively high.

In this “beautiful” industrial chain that continues to attract gold, venture capital and industrial capital have a strong willingness to enter, and continue to promote the transformation and shaping of the internal structure.

In recent years, Huahan Plastics, Lidu Plastics, Limeikang and other medical and beauty companies have been listed on the New Third Board; medical and beauty applications such as new oxygen, Yuemei, more beautiful, beautiful artifacts, and Meiluola have all received financing.

Wu Jianying said that in the construction of the entire industrial chain of medical beauty, there are many links in which capital can be easily involved. “Upstream enterprises develop products according to the needs of medical institutions; manufacturers improve products and provide value-added services; in addition, in circulation areas and channels, medical institutions In the link, there are ways for capital to enter."

However, the main profit of China's medical and beauty market is still concentrated on the product consumables, not on the server side.

Among them, the equipment mainly includes laser beauty instrument, liposuction machine, orthopedics, etc.; consumables mainly include wound care, hemostasis, beauty filler, botulinum toxin, collagen and so on. The first camp companies include Bohai Biological and Huaxi Biotechnology.

Taking Bohai Biological as an example, its main business covers four major sections: orthopedics, plastic surgery and wound care, ophthalmology, anti-adhesion and hemostasis. In 2015, revenue was 664 million yuan, a year-on-year increase of 28.7%; net profit attributable to shareholders of the parent company was 273 million yuan, a year-on-year increase of 49%.

Specific to the segment, the revenue of orthopedic products was 284 million yuan, a year-on-year increase of 19.9%, accounting for more than 40% of total revenue; the income from plastic surgery and wound care, ophthalmology, anti-adhesion and hemostasis were 122 million yuan respectively. It was 0.72 billion yuan and 179 million yuan, a year-on-year increase of 115.3%, 8.1% and 15.3% respectively.

According to the report of the Southern Pharmaceutical Economic Research Institute under the State Food and Drug Administration, the market share of ophthalmic viscoelastics, anti-adhesion products and osteoarticular injection products produced by Bohai Biotech in 2014 was 41.8%, 48% and 31.7%, both It is the first place for Chinese manufacturers.

At the same time, after acquiring a 38% stake in Henan Universe last year, Bohai Bio has expanded its ophthalmic business in four major therapeutic areas. Wu Jianying said: "This year, we will still consider investing in ophthalmology and other fields through investment and mergers and acquisitions. Product reserves, raw materials, management capabilities and performance support us to further share the benefits of the medical and beauty industry in the growth process."

In the consumer service side, China's normative and technical level is different from that of developed countries such as South Korea, with low-to-medium consumption as the mainstay. The phenomenon of diversion of middle and high-end customers is very obvious, and local high-end beauty salons are caught in low profits.

Market pattern: small scattered under the big market

The chaos is a lot of people's impression of the medical beauty industry, and the Chinese market presents a small scattered pattern under the big market.

Wu Jun said that China's medical and beauty industry is highly fragmented, and there are more than 10,000 medical and beauty institutions registered by the health department. Among them, there are few medical and beauty institutions that can account for 5% of the market share. On the other hand, the competition is relatively concentrated, and the medical institutions are operated. There are about 4,400 US institutions; and the distribution of doctor resources is unbalanced. There are 4,000-5,000 certified doctors in the country, and private small and medium-sized medical institutions with a proportion of more than 60% have only about 35% of the doctor's resources and market share in the country.

One of the reasons for the small disorder is that the supervision is still immature. The market is full of 100,000 beauty institutions, accounting for only 1/10 of the legal approval, and most of the enterprises use substandard or even counterfeit products. Taking hyaluronic acid as an example, CFDA Approved is still less than 30% used in circulation.

This has caused the phenomenon of “marketing is greater than service” in beauty institutions. According to the statistics of many listed companies, the average marketing cost of enterprises currently accounts for 40%-50% of total profits, while profits are relatively low.

In addition, the safety accident is also a big expense for beauty agencies. Wu Jianying said: "The bigger investment in the medical and aesthetic industry is how to avoid risks. If there is any adverse reaction, this part of the investment is mandatory."

In Wu Jianying's view, from a regulatory point of view, it is necessary to avoid creating a vacuum zone; from the consumer's point of view, due to the strong willingness to pay at will, once the industry is not in place, it will cause major damage and blow to the industry. For example, the health care products industry in Europe and the United States is very mature and the market is very large, but the Chinese health care products market has almost become a liar. In the absence of supervision, the health care products industry lags far behind Europe and the United States.

The Internet marketing channel that has emerged in recent years is also a double-edged sword.

Internet+ has spawned a large number of medical beauty platforms, such as Yuemei, New Oxygen, Beautiful Artifacts, and more beautiful mobile applications, trying to create a small and beautiful user experience. These platforms have a high degree of specialization, clear market positioning, and strong user impact. According to the calculation of 36æ°ª, the average repurchase rate of customers on each platform is generally maintained at around 70%, and the average unit price is 5000-6000 yuan. At the same time, the Internet has also significantly lowered the industry threshold.

But it also brings a lot of problems. “Emerging industry has many ideas and many methods, but it is not standardized. It is very difficult to improve customer adhesion through low prices. The choice of customers is complex and diverse, and the establishment of high-end brands cannot be based on price wars.” Wu Jianying believes that low-price competition is not desirable. An industry without profit is unlikely to thrive.

Source: 21st Century Business Herald

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