Inside China’s $37 billion cosmetic surgery industry

China performs more cosmetic enhancement procedures than any country in the world outside of the United States. It has become the most important emerging market for aesthetic medicine – and it’s still in its infancy.

The Chinese cosmetic surgery market, which barely existed 20 years ago, is now worth more than 256 billion yuan (US$36.71 billion), according to a report released last year by Chinese cosmetic surgery app Gengmei. The market has been growing at an annual compound growth rate of 30 percent in the past five years, (far exceeding the 3.9% of the United States, according to US consultancy Frost & Sullivan).

The beauty industry as a whole is increasing rapidly in China. According to Euromonitor, China is the second largest beauty market in the world, and is only getting bigger. The year on year growth rate in 2018 was 12.9%, three times the current largest market, the US. Some of China’s largest corporations, namely Alibaba and Tencent, are branching out to meet the growing demands and opportunities in this market and are investing heavily in beauty companies.

Investment bank JPMorgan predicts China is set to become the world’s biggest plastic surgery market, worth 400 billion yuan (US $62 billion) by 2023, even taking into account the effects of COVID-19.

China’s changing attitudes towards beauty and self-image, growing wealth and rising middle class, technological advancements, celebrity culture and growth of social media are thought to be the main contributors compounding this growth.

The PRC: Plastic Republic of China

Back in 2014, more than 7 million Chinese people had plastic surgery, according to the China Association of Plastics and Aesthetics. In 2017, data compiled by the Shanghai branch of Frost & Sullivan suggested the figure was closer to 16.3 million. Daxue Consulting China says over 20 million Chinese had plastic surgery in 2018 and most patients were in their 20s.

Most recently, the Gengmei report says a total of 25 million medical aesthetic procedures were performed in China in 2019, with 10 cities – including Beijing, Shanghai, Guangzhou city in Guangdong province, and Chengdu city in Sichuan province – topping the list.

Just over 30% percent of patients are from first-tier cities (boasting China’s most developed economies and infrastructure, namely Beijing, Shanghai, Guangzhou and Shenzen), while the figure for second-tier cities is 35 percent, growing 7 percentage points from the previous year.

The average age of customers is declining over the years to 24 years old. Over half of the patients are under age 28, with around 38% of customers aged 20 to 25 in 2019, according to the annual white paper released by SoYoung, a leading Chinese online platform for plastic surgery. The percentage of teenage patients who underwent cosmetic procedures doubled from 2018 to 2019 – plastic surgery has become a popular gift to teenagers after the national college entrance exam. To put that into perspective, cosmetic surgery patients under 30 years made up a mere 6% of the total in the US in that same year, according to the American Society of Plastic Surgeons.

Facial lipofilling, rhinoplasty and eyelid surgery (most notably double eyelid surgery) were the most popular facial plastic surgeries in China, with a combined market share of 70 percent, according to a statista.com report.

Interestingly, many of these young women are living in the country’s second and third tier cities, according to So-Young’s data.

Such is the faith in the growth potential of China’s medical aesthetics industry that Aesthetic Medical International Holdings, a Chinese plastic surgery practice, started trading on the Nasdaq Global Market in October 2019. The company’s revenue has been primarily driven by aesthetic treatments and services. According to Chinese news site xinhuanet.com, so far, it is the third-largest private aesthetic medical services provider in China in terms of revenue in 2018, registering US $110.9 million dollars. ‘China’s medical beauty industry has great growth potential. With a low penetration rate, its growth potential is very large,’ Zhou Pengwu, CEO of Aesthetic Medical, told xinhaunet.com at the time.

 Selfies, apps and K-pop

K-POP (essentially South Korean pop music by young idols) and Hallyu culture have had a significant impact on the types of surgeries that people want in China.

‘Hallyu is the term used to describe the Korean Wave, the surge in popularity for Korean culture that has been seen across Asia,’ explains Tony DeGennaro, co-founder of Dragon Social, a Chinese market intelligence agency. ‘A massive reason for the growth in the Chinese plastic surgery market is the increased influence of South Korea, where plastic surgery is a part of everyday life. Nose jobs and double eyelid surgeries are a very common surgery in South Korea which may be given as high school graduation presents.’

The surge in plastic surgery in China is also in part due to a series of apps like So-Young and GengMei, which allow potential patients to view before and after photos, book surgeries and even apply for credit to pay for them.

GengMei, which means “more beautiful” in Chinese, has 36 million users and lists almost 20,000 surgeons on its platform, according to a company spokesperson.

GengMei has an augmented reality feature that can analyse a face and give it a grade out of 100 based on criteria such as “liveliness, attractiveness and symmetry”. It then makes suggestions for cosmetic surgery improvements, such as eyelid surgery or filler treatment. According to Gengmei’s report, ‘elf face,’ ‘supermodel face,’ ‘catfish face,’ ‘manga face,’ ‘first-love face’ and ‘world-weary face’ have become popular options for young people seeking facial reconstruction. The app even gives users access to micro-loans through Alipay’s lending service Huabei to pay for the surgery.

Tencent-backed So-Young, founded in 2013, is a cosmetic surgery community and social networking app that connects clinics with patients. It has 2.47 million monthly active users and nearly 6,000 surgeons listed, according to a So-Young spokesperson. It made its debut on Nasdaq in 2019 after its $179 million initial public offering.

‘In China, it is very difficult to find reliable information on clinics, especially in smaller cities,’ DeGennaro told CNN.com in 2020. ‘People no longer trust the search results returned by (search engine) Baidu, following several medical scandals involving the platform, so these new apps have taken over as unofficial directories of surgeons.’

But it’s hard to pinpoint social media as the only reason Chinese consumers have fuelled the cosmetic surgery boom.

‘While shifting beauty standards can be explained by social media, it should also be noted that changes in the perceptions of cosmetic surgery also have an impact on the increase in demand for Chinese plastic surgery,’ says DeGennaro.

Indeed, as HSBC analyst Zhijie Zhao has said, ‘The pursuit of physical beauty had become big business in China.’

Your face is your rice bowl

‘Consider the following Chinese proverb: “Your face is your rice bowl.” It shows how important being beautiful is and how deep the roots of this attitude go,” London and Shanghai-based aesthetic practitioner Dr Souphiyeh Samizadeh told That’s Shanghai magazine. She has been living between China and the UK for almost four years, acting as a visiting associate professor, while taking stock of the Chinese plastic surgery market and contributing to studies on modern beauty ideals.

In China, beauty is deemed as an advantage in the competitive mid-level workplace. As competition in the job market grows, recent graduates are opting for cosmetic surgeries to improve their chances of making a good first impression on their resumes (job applicants are often required to submit a photograph with their application) and in interviews.

Medical device companies: challenges & opportunities

Going hand in hand with the skyrocketing cosmetic enhancement industry is China’s aesthetic device market.

The Chinese medical aesthetics market is estimated to grow significantly to 500 billion yuan (USD 70 billion) by 2022. However, with ill-defined regulations, the prevalence of illegal procedures, fake and smuggled products and a shortage of qualified professionals, the market holds as many challenges as it does opportunities, according to reports from PharmaBoardroom.

In its push to foster its reputation in this emergent field, the city of Chengdu, the capital of southwestern China’s Sichuan province, has enlisted Allergan, a global leader in medical aesthetics, as a strategic partner.

Allergan has already invested heavily in a number of initiatives there, including a global consumer experience centre, an R&D-focused innovation centre, and a brand awareness drive for both consumers and potential future employees.

Indeed, China and emerging Asian markets in general represent a huge opportunity for medical device companies. Fosun, a Chinese international conglomerate and pharmaceutical company, acquired Israeli aesthetic technologic device company Medical Nova in late 2018. Back in 2013, it bought Alma Lasers for US$240 million.

Opportunities for Australian surgeons

According to The Beijing News, there are over 500 genuine plastic surgery hospitals in Beijing, but the number of “black clinics” is over 1,500, and some doctors claim that around 60 to 70 percent of their patients come to them to fix their botched operations from elsewhere.

‘Lack of trust in Chinese hospitals and even private hospitals means that many Chinese consumers travel out of the country to undergo procedures, however the domestic market has seen tremendous growth in recent years,’ says DeGennaro.

In recent years, China has leapfrogged New Zealand to become the number-one country for travellers to Australia and the largest market for total spend. In 2019, Australia saw nearly 1.5 million short-term arrivals from China, according to the Australian Trade and Investment Commission (Austrade).

Chinese tourists spent $12.4 billion while in Australia in 2019. China has a population of 1.38 billion people, meaning that less than 1% of their population visited Australia in 2019.

The pace of change has been dramatic: 10 years ago, the annual total of Chinese travellers in Australia was just 353,000. Chinese arrivals have grown by over one million or at a compound growth rate of 15% a year since 2009, says Austrade.

The convergence of higher numbers of Chinese travellers to Australia with an increased interest in cosmetic surgery, presents huge growth opportunities for cosmetic practitioners in Australia. A 2016 report by VISA and Oxford Economics predicts that the medical travel market will reach US $3 trillion by 2025, with China poised to overtake the US in healthcare travel spending due to the stronger demand for higher quality of care. And, according to a 2018 report by the China Tourism Academy, more than two million Chinese travel annually for health tourism, and they predict numbers will grow quickly.

‘In the next few years, the Chinese plastic surgery market is expected to boom even more than it already is. This is going to increase the intense competition between both international and domestic hospitals and surgeries, who are courting the increasing amount of mainlanders who wish to change their looks,’ DeGennaro concludes. AMP