Core Viewpoint - The medical beauty industry in China is experiencing significant investment activity, with a total of over 1.1 billion yuan raised in 30 financing rounds in 2024, indicating a robust market despite economic challenges [1][2]. Group 1: Industry Overview - The medical beauty industry can be divided into three core segments: upstream (raw materials and equipment suppliers), midstream (medical beauty institutions), and downstream (medical beauty platforms and end consumers) [2][3]. - Upstream companies like Aimeike and Jinbo Bio have high profit margins, with Aimeike's gross margin reaching 95% and net profit up to 50%, while midstream institutions often struggle with profitability [3][4]. Group 2: Upstream Dynamics - The upstream segment benefits from high entry barriers due to stringent regulatory requirements and long R&D cycles, with products like hyaluronic acid requiring 3-8 years for development and approval [9][11]. - The medical beauty market is characterized by a "gold rush" phenomenon, where suppliers of essential materials and equipment (the "shovel sellers") are the primary beneficiaries of the industry's growth [5][6]. Group 3: Midstream Challenges - Midstream medical beauty institutions face significant challenges, including high customer acquisition costs, which have risen to 3,000-5,000 yuan per customer, and a competitive environment that has led to low profitability [18][16]. - The lack of standardization and regulatory compliance among medical beauty institutions contributes to a fragmented market, with only 12% of institutions being legally compliant as of 2019 [14][16]. Group 4: Downstream Competition - The competition between platforms like Meituan and Xinyang has intensified, with Meituan leveraging its large user base to dominate the market, significantly impacting the profitability of downstream medical beauty institutions [20][21]. - Meituan's entry into the medical beauty sector has disrupted traditional profit-sharing models, forcing institutions to lower prices and accept lower margins [22][21].