Core Insights - The beauty and medical aesthetics sectors are increasingly merging, with significant interest from both international giants and local startups, indicating a strong growth trend in this area [1][5][31] - L'Oréal is a leading player in this trend, having made substantial investments and strategic moves to integrate beauty and medical aesthetics [2][10][17] Group 1: Industry Trends - Since 2024, there has been an unusual enthusiasm among beauty companies to enter the medical aesthetics business, with both high-end and budget brands participating [1] - The merger of beauty and medical aesthetics is not a new concept, but it is gaining momentum, with companies like L'Oréal leading the charge [1][5] - The retail sales of cosmetics in China fell by 1.1% in 2024, while the total retail sales of consumer goods grew by 3.5%, highlighting the need for beauty brands to innovate and find new growth avenues [5] Group 2: Company Developments - In 2023, L'Oréal rebranded its active health cosmetics division to the skin science beauty division and launched its core brand, SkinCeuticals, in 2024 [2] - Estee Lauder's Clinique launched a series of medical device products, while Shiseido is set to introduce its first medical beauty brand in China [3] - Domestic brands like Shiseido and Up Beauty are also making strides in the medical aesthetics space, with new product launches and business developments [4] Group 3: Strategic Initiatives - L'Oréal's beauty tech transformation strategy, initiated in 2018, focuses on integrating technology into beauty and medical aesthetics, with significant investments in digital R&D [6][8] - The company has established a comprehensive network for integrating beauty and medical aesthetics, including investments in high-end medical beauty chains and partnerships with biotech firms [17][18] - L'Oréal's SkinCeuticals brand has seen a 9.8% year-on-year growth, reaching €7.03 billion in revenue, making it the fastest-growing segment of the group [10] Group 4: Market Dynamics - The merging of beauty and medical aesthetics allows brands to create a closed-loop product offering, enhancing customer loyalty and repeat purchases [22] - The shift towards medical aesthetics is seen as a necessary strategy to avoid intense competition in traditional beauty markets [19][20] - However, the differing operational models and regulatory requirements between beauty and medical aesthetics present new challenges for companies [24][30]

Core Viewpoint - Shiseido has launched its first medical beauty brand, RQPYOLOGY, marking its entry into the medical aesthetics market amid declining performance over recent years. The company aims to leverage the growing market potential, but faces competition from established players like L'Oréal and Estée Lauder [1][3]. Group 1: Brand Launch and Product Information - RQPYOLOGY is positioned as a high-end medical beauty brand that integrates skin care with medical aesthetics, targeting consumers seeking professional beauty results and premium experiences [3]. - The brand has successfully registered two products: RQPYOLOGY Brightening Essence and RQPYOLOGY Sunscreen, and plans to collaborate with medical clinics and hospitals in China for product development [3][4]. Group 2: Market Context and Strategic Moves - Shiseido's management has expressed intentions to enter the medical aesthetics market, supported by investments and collaborations, including partnerships with domestic medical technology firms and research institutions [4]. - The medical aesthetics market is projected to grow significantly, with estimates suggesting an increase from 99.3 billion yuan in 2017 to 638.2 billion yuan by 2030, indicating a high growth rate and potential for high-margin opportunities [7]. Group 3: Financial Performance and Challenges - Shiseido has faced declining sales, with net sales of 990.6 billion yen in 2024, a 1.8% increase, but a core operating profit decrease of 35 billion yen, and a net loss of 108 billion yen [5]. - The company has experienced a downward trend in performance over the past few years, with net sales dropping by 8.8% in 2023 and a significant decline in operating profit and net profit [5]. Group 4: Competitive Landscape - Major beauty brands like L'Oréal and Estée Lauder are also expanding into the medical aesthetics sector, indicating a trend among beauty companies to seek higher value and profit margins in this area [7][8]. - The medical aesthetics market requires a higher level of professionalism and involves medical-grade systems, presenting challenges for beauty companies that primarily operate in brand and channel management [9].