In the field of consumption, there is such a chain of contempt for consumption power: women, children, old people, pets, and men. In the context of the prevalence of the "she economy", women's consumption potential has been fully tapped, and many tracks have become excellent nuggets, such as medical beauty.
As the leading vertical medical beauty Internet platform in China, Xinyang has occupied a full mind among female consumers. In 2019, Xinyang landed on the NASDAQ exchange and raised about 1$79.4 billion, a moment in the limelight. But now, the share price of Xinyang has increased from the issue price of 13$80 The stock fell to 1$13 shares, and even face the risk of delisting. The company's CEO, Jin Xing, once wanted to privatize Xinyang, but in the end it failed.
With the rise of Internet local life service providers such as Douyin and Meituan, vertical Internet platforms such as Xinyang have also fallen into traffic anxiety. In the face of the general trend of consumption downgrade, Xinyang's original single and fragile business model is even more impoverished and powerless.
In recent years, Xinyang has opened the road of self-help and laid out the upstream of the beauty industry chain, in order to reduce the risk of the company's decline through a new growth curve. In such an environment of internal and external difficulties, can Xinyang really break out of the encirclement?
01 Traffic anxiety and consumption downgrade
Xinyang's business can be divided into three major segments: information services and other businesses, booking services, and medical product sales and services.
Among them, information services and other businesses, as well as booking services, are mainly carried out through Xinyang's online platform, which is also the initial main business of Xinyang.
According to the latest financial report, as of the first three quarters of 2023, the revenue of information business and other services is about 79.5 billion yuan, accounting for 71% of total revenue79%；Revenue from the booking service business was approximately 0800 million yuan, accounting for 7 percent of total revenue30%。The combined revenue of the two businesses accounted for 79 percent of total revenue08%。
As the majority of Xinyang's revenue, the information business and reservation service business are extremely dependent on online traffic. Xinyang's business model can be summarized as "** community + e-commerce", that is, to attract traffic through high-quality content, improve the conversion rate of upstream B-end medical aesthetic institution customers, create a community to cultivate user stickiness, attract medical institutions and physicians to settle in for face-to-face consultation, and provide Internet appointment services for offline medical aesthetic institutions. The higher the traffic, the more Xinyang can earn with this business model.
In recent years, the flow rate of new oxygen has been declining. According to the financial report data, the MAU (average monthly active users) of Xinyang's mobile terminal has continued to decline since it reached a small peak of 10 million in Q2 2021. Entering 2023, the MAU of Xinyang mobile terminal in Q1, Q2, and Q3 will be 3.4 million, 3 million, and 3.1 million respectively, accounting for only about 30% of the small peak in Q2 in 2021.
"Now it is difficult for the Internet traffic economy to have new increments and enter the stock market competition. It is very difficult for vertical Internet platforms such as Xinyang to compete with larger Internet platforms for traffic. Due to the traffic advantage, many medical aesthetic institutions are more inclined to cooperate with local life or social Internet platforms such as Meituan and Douyin. This trend is not limited to the field of medical cosmetology, and now all the fields that large Internet platforms have the ability to cover, among which vertical Internet platforms will be squeezed. ”A TMT researcher said to Node Finance.
The house leak coincided with the overnight rain, and Xinyang, which gradually lost its competitiveness on the traffic side, is facing the general trend of consumption downgrade in the medical beauty industry, and the dividends of the "beauty economy" cannot be the same as in the past. Previously, the long slope and thick snow in the medical aesthetic industry were reflected in its high customer unit price and high consumption frequency. In the post-epidemic era, most medical aesthetic institutions have fallen into the involution of reducing both customer unit price and consumption frequency.
"Medical cosmetology is a non-rigid optional consumption, after the consumption downgrade, the consumption demand of high-end groups for medical cosmetology has changed little, but the demand for medical cosmetology of the more sensitive consumer groups is decreasing, and the latter accounts for a higher proportion, which forces many institutions to fight a first-class war, and at the same time have to reduce the cost of marketing delivery. This is also a blow to Xinyang. ”The researcher analyzed.
02 Fragile business model
The formation of the passive situation of new oxygen is not only affected by macro environmental factors, but also due to its poor position in the upstream and downstream of the industrial chain.
The medical aesthetic industry chain can be divided into three links: upstream, midstream and downstream. The upstream is mainly some raw materials and equipment manufacturers, usually these enterprises need to pass a certain medical qualification approval before they can produce and sell, with a high degree of concentration and relatively low competition, such as Aimeike, Bloomage Biotech, etc. The midstream is the first distributor and medical aesthetic service organization, with a relatively low entry threshold and mixed competition. The downstream is an Internet platform such as Xinyang, which needs to compete for traffic for C-end users.
In the entire industrial chain, the upstream competition pattern is the best, and the profitability is also the strongest. Statistics show that the gross profit margin of upstream products is roughly 50%-90%, and the net profit margin is roughly 20%-50%. The gross profit margin of midstream ** merchants is about 20%-35%, and the net profit margin is roughly 5%-15%. The gross profit margin of medical aesthetic institutions is roughly between 40% and 70%, and the net profit margin is about 10%.
In contrast, the profitability of Xinyang is not only weaker than that of the upstream, but also the profitability is declining year by year. From 2019 to 2022, the gross profit margin of Xinyang was63% and 6873%, but the net profit margin is only38%、-2.22% and -525%。As of the first three quarters of 2023, Xinyang's gross profit margin slipped to 6328%, net profit margin rebounded slightly to 061%。
"Different from the upstream to B-end raw materials and equipment companies, new oxygen and medical aesthetic institutions are directly to the C-end link. In order to acquire C-end users, marketing expenses are indispensable. As an Internet company, labor cost is also an important cost expense. Although Xinyang's gross profit margin is high, these two costs have seriously eroded Xinyang's profits. ”The above-mentioned researcher analyzed the node finance.
According to the financial report, from 2019 to 2022, the marketing expense rate of Xinyang will be82% and 3753% with general and administrative expense rates of .90% and 2069%。
At the same time, because of the low downstream threshold of the medical aesthetic industry and the rampant false advertising, Xinyang has been caught in such disputes many times. For example, Xinyang also recommended the advertising space of medical cosmetology institutions through bidding ranking, and put problematic medical cosmetology institutions on the list, and had to urgently remove them from the shelves after the medical cosmetology institutions were suspected of medical disputes.
With the increasing frequency of chaos in the medical cosmetology industry, the state has gradually strengthened the corresponding supervision and management. In August 2021, eight ministries and commissions demanded a severe crackdown on the illegal conduct of medical cosmetology-related activities. In November of the same year, the Law Enforcement Guidelines for Medical Cosmetology Advertisements were released, which stated that advertisers must obtain a medical institution practice license in accordance with the law before publishing or entrusting the publication of medical cosmetology advertisements. This is also a big blow to Xinyang, whose business model is more dependent on upstream advertising business.
03 Capital layout in the upstream of the industrial chain
Conscious of the poor position of the industrial chain, Xinyang chose to lay out the upstream of the medical aesthetic industry chain on the way to break the situation.
According to Frost & Sullivan data, in 2020, the proportion of non-surgical services in China will reach 755%, and this figure is expected to reach 88% in 2025. The frequent explosion of light medical beauty fields such as electric skin beauty, instrument anti-aging, and injection beauty has also allowed Xinyang to target photorejuvenation, a light medical beauty project that has been popular with consumers in recent years.
In 2021, Xinyang will spend 79.1 billion yuan acquired Wuhan Qizhi Laser 8449% of the shares, completing its first move in the upstream layout. It is reported that Qizhi Laser is mainly engaged in the research and development, production, sales and development of lasers and other optoelectronic medical and beauty equipment, with technical strength ranking among the top three in the industry, and has more than 70 medical registration certificates.
Not only that, Xinyang has also launched its own light medical cosmetology service platform Xinyang Preferential, the first upstream medical cosmetology products, and the products will be purchased directly to the store, shortening the intermediate chain and improving profit margins. Xinyang's exclusive** medical aesthetic products include South Korea's Dongbang Medical's hyaluronic acid product Erasti, Xihong Pharmaceutical's Skin Booster and Youthful Injection.
The ambition for the upstream of the industrial chain is also reflected in the direct cooperation with related medical groups to develop medical aesthetic products. In November 2023, Xinyang signed a contract with Beijing Aotaikang Pharmaceutical Technology Development***, announcing that the two parties have reached a strategic cooperation on the research and development of two related categories. In December of the same year, the hyaluronic acid factory jointly built by Xinyang and Dongbang Medical of South Korea was officially established in Jiaxing, with an estimated annual output of 750,000 hyaluronic acid injections.
At present, the most potential in the second growth curve of Xinyang is the merger and acquisition project of Qizhi Laser. In October last year, Qizhi Laser submitted an application for IPO to the Beijing Stock Exchange, planning to raise 31.2 billion yuan. If it is successfully listed, Xinyang may "recreate" a new oxygen in the A-share market, so as to get rid of the long-term downturn in the US stock market.
According to the prospectus, from 2020 to the first half of 2023, the revenue of Qizhi Laser will be about 1800 million yuan, 2400 million yuan, 2500 million yuan and 0$6.3 billion; The net profit attributable to the parent company was 02.9 billion yuan, 03.6 billion yuan, 04 billion and 01.1 billion yuan, gross profit margin reached6% and 599%。
However, because about 30% of Qizhi Laser's business is product ** business, the gross profit margin of this business in 2022 is only 349%。This also makes the overall gross profit margin level of Qizhi Laser lower than that of its peers. The low R&D rate of Qizhi Laser, the market has a lot of doubts about the "technology" component of Qizhi Laser. In addition, Qizhi Laser has had many failed sprint IPOs before, and whether the company can successfully go public for new oxygen transfusion has to put a question mark.
The success of Xinyang actually depends on the dividends of the mobile Internet in the previous stage and the rise of the beauty economy. It seized the tuyere and grasped the changes in consumer trends, but it had no way to build a completely competitive moat of its own, neither could it win in the more fierce traffic competition, nor did it have a certain R&D strength to obtain more profit space. Through acquisition and investment cooperation, it has become the best choice for Xinyang to lay out in the direction of more upstream industries. Whether Xinyang can really achieve nirvana rebirth through the second growth curve still needs time to answer.
Wen Yi Lamp.