According to statistics from Guangdong Securities, the domestic consumer healthcare market size corresponds to a trillion-level market. Among them, the market size of specialized medical fields such as ophthalmology, stomatology, and assisted reproduction can reach 382.62 billion yuan, and is expected to reach 605.88 billion yuan in 2025; the market size of the medical beauty field has reached 226.7 billion yuan, and is expected to reach 352.9 billion yuan in 2025.

In such a vast market, growth should be the first priority. However, after the epidemic, the expected consumption recovery and rebound have not arrived.

Since the third quarter of last year, the overall economic environment has continued to weaken, and the operating pressure of sub-industries such as medical services, consumer equipment, and medical beauty with consumer attributes has increased, and most of them have not met expectations.

This was particularly evident in the second quarter of this year, and the leading consumer healthcare companies collectively stalled.

Take the three major consumer healthcare products as an example. In the field of medical beauty, the leading company Aimeikang had revenue of 849 million yuan in the second quarter, a slight increase of 2.35% year-on-year, and a net profit of 593 million yuan, an increase of 8.03% year-on-year, which was a significant slowdown; Huaxi Bio continued to slump, with revenue of 1.45 billion yuan in the second quarter, a year-on-year decrease of 18.09%, and a net profit of 98 million yuan, a year-on-year decrease of 56.1%.

In the field of oral care, not only is there internal competition, but also the high-profit business consumables centralized procurement stick. The leading company Tongce Medical had revenue of 792 million yuan in the second quarter, a slight increase of 2.04% year-on-year, and a net profit of 137 million yuan, a slight increase of 0.85% year-on-year, and the growth was basically stagnant. Among them, the orthodontic business with strong consumer attributes fell by 4.7% year-on-year in the first half of the year.

The ophthalmology field also fell. The leading company Aier Eye Hospital had revenue of 535 million yuan in the second quarter, a slight increase of 2.25% year-on-year, and a non-net profit of 942 million yuan, a year-on-year decrease of 6.42%;

The performance decline of growth hormone and self-paid vaccines was even more obvious. In the second quarter, Changchun High-Tech's revenue increased slightly by 2%, and its net profit was 861 million yuan, a year-on-year decline of 33.94%; Anke Bio's revenue and net profit both declined.

Zhifei Bio, which has been making money for years with the 9-valent HPV vaccine, can no longer run. In the second quarter, its revenue was 6.863 billion yuan, a year-on-year decrease of 48.29%, and its net profit was 777 million yuan, a year-on-year decrease of 65.14%. Both revenue and profit have fallen sharply. Such performance has never happened even during the epidemic.

The domestic herpes zoster vaccine, which was running wild, also can no longer run. In the second quarter, Baike Bio's revenue was 348 million yuan, a year-on-year decrease of 8.44%, and its net profit was 77 million yuan, a year-on-year decrease of 17.16%. It has been listed for only more than a year. Compared with the high growth in the first quarter, such performance is obviously difficult to satisfy the market.

Even with its own more rigid medical attributes, consumer medical care has followed the trend of the consumer industry and entered winter in summer.

Under objective factors, the demand for consumer medical care is naturally suppressed. Take medical beauty as an example. One of the core logics of the medical beauty track being highly sought after was "addiction" and high repurchase. The high growth brought about by this, coupled with the high threshold of the industry and the product advantages of the top players, constituted the main logic for the market to be optimistic about medical beauty leaders such as Aimei.

However, under the trend of consumption downgrade, the overall situation has changed subtly.

First, the consumption power of women, who are known as the strongest consumer power, has also begun to shrink. In the first six months of this year, the overall cumulative growth of domestic social retail sales was 3.7% year-on-year, but cosmetics only grew by 1%.

Secondly, although medical beauty has rigid demand attributes, it is not a necessary consumption, and it is difficult to "stay out of trouble" without the external environment.

According to China's "2024 Insight Report on China's Medical Beauty Industry", service consumption is in the recovery stage in 2024, and the growth rate of China's medical beauty market is expected to reach about 10%; driven by the continuous improvement of medical beauty penetration and diversified quality medical beauty demand, China's medical beauty market is expected to maintain a rapid growth of 10% to 15% in the next few years.

Compared with the 2023 report, the growth rate has been reduced by 5%-10%. The expected growth rate of the industry has been lowered, and market expectations must be adjusted accordingly.

If we look at the entire market, Aimei has maintained a growth of more than 15% in the first half of the year. But compared with the growth of nearly 30% in the first quarter, the growth in the second quarter was only in the single digits. This gap caught the market off guard.

Looking further, the sectors with stronger optional consumption attributes in medical beauty have declined more severely. Huaxi Bio's revenue fell by 8.61% in the first half of the year, of which the functional skin care business, which accounted for half of its revenue, fell by 29.74% year-on-year.

Of course, in the field of medical beauty, the ebb and flow of demand are happening simultaneously. In the first half of the year, Jinbo Bio and Juzi Bio continued to maintain high growth, but their growth was more due to the popularity of recombinant collagen and the competition and substitution of hyaluronic acid.

Compared with medical beauty, the ebb and flow of demand in the oral field came earlier.

Since 2023, the oral service market has entered an era of low growth. This is not difficult to understand. When the economic environment is not good, the willingness to consume dentistry will be delayed, and the premium people are willing to pay will also decrease.

After all, dental care is not cheap anywhere. Most dental problems will not significantly affect the normal life of patients. In this environment, the entire dental track has been affected.

The growth rate of oral cavity mainly comes from orthodontics and implants. Since orthodontics has stronger consumer attributes, it faces greater pressure in the economic cycle and the decline is more obvious. This can also be seen from the semi-annual report of Tongce Medical. Although implants have certain rigid demand attributes, they are also facing stagnation in market share due to the impact of centralized procurement.

On the surface, Angelalign achieved counter-cyclical growth, with revenue of 861 million yuan in the first half of the year, a year-on-year increase of nearly 40%, setting a new high in the past two years. But in fact, domestic revenue in the first half of the year only increased by 10%, and most of the growth came from overseas business.

In contrast, the ophthalmology market was relatively least affected. Although the consumer business of ophthalmology hospitals began to show signs of fatigue last year, the eye disease business is still stable. Because of its rigid treatment needs, the cataract business has made up for the decline in the growth rate of refractive and optometry business to a certain extent, and some elderly patients delayed by the external environment have concentrated on medical treatment.

But this "rebound" is short-lived. In the first half of this year, Aier Eye Hospital, Pure Eye Hospital, Huaxia Eye Hospital and others fell collectively.

Overall, although there are also differentiations, most consumer medical leaders are sinking deeper and deeper in the quagmire of weak demand.

However, while the performance of various consumer medical companies is stalling, mergers and acquisitions are quietly accelerating.

Mergers and acquisitions are the core path for Aier Eye Hospital to become bigger and stronger. Since the beginning of this year, not only Aier Eye Hospital, but also many consumer medical companies including stomatology, traditional Chinese medicine, medical beauty, and physical examinations have made acquisitions. According to publicly available data, 15 mergers and acquisitions in consumer medical services involve more than 230 medical and beauty institutions.

Among them, Aier Eye Hospital is still the main force in mergers and acquisitions. In May, it announced that it planned to acquire part of the equity of 52 medical institutions including Chongqing Eye and Optometry and Zhoukou Aier, with a total transaction amount of 1.344 billion yuan; in June, Clínica Baviera, the European branch of Aier Eye Hospital, announced the acquisition of 100% of the equity of the British Optimax Group, which owns 19 medical institutions in the UK; in July, it planned to acquire part of the equity of 35 hospitals including Humen Aier and Yuncheng Aier, with a transaction amount of 898 million yuan.

Even Tongce Medical, which has always been cautious about mergers and acquisitions and external expansion, has changed its mind. In a letter to shareholders in the 2023 annual report, the company's chairman Lu Jianming said that the development model of burning money and piling up people is no longer appropriate. Tongce's future external expansion will change from relying solely on self-construction to acquisitions, mergers and franchising.

In March, Tongce Medical announced that it had completed the acquisition and capital increase of Loudi Stomatological Hospital, with a total transaction amount of 32.48 million yuan, involving a total of 8 hospitals and outpatient clinics under Loudi Stomatology. The strategic transformation has been implemented, and the subsequent results remain to be seen.

The activeness of consumer healthcare mergers and acquisitions is closely related to many factors. On the one hand, with the changes in the economic cycle and the investment and financing environment, not only consumer healthcare, but also the entire healthcare sector has ushered in a period of integration.

On the other hand, although residents' consumption is suppressed to a certain extent by the objective environment, residents' health awareness has increased and corresponding expenditures will also increase. The overall development potential of consumer healthcare is still very large.

As an industry that can grow to a scale of 2 trillion to 3 trillion yuan within three years, there will be opportunities. Consumer healthcare is in line with the general logic of consumption upgrading and industrial upgrading in the Chinese market. With the continuous recovery and rebound of the economy, consumer confidence will recover sooner or later.

By then, all tracks of consumer healthcare will reap positive effects. Of course, in the long run, it will be difficult for the entire consumer healthcare market to replicate the high growth miracle of the past 10 years.

In this process, developing in-depth fields is inevitable for industrial upgrading. The extensive development model no longer meets the needs of the times. Every billion-level market is worth doing in depth, not to mention the tens of billions or even hundreds of billions of markets.

This not only requires companies to adjust their growth expectations for consumer healthcare, but more importantly, to complete the transformation from the original extensive emerging market model that is highly dependent on marketing to a mature market model that relies on repurchase and is managed in a refined manner.

As the Game of Thrones said, chaos is not a deep pit, but a ladder. There is no destiny, only choice. In an era where new changes are constantly emerging, the key lies in how companies can determine themselves.

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