Regulatory strikes hard at the chaos of medical beauty advertising! Nine situations, such as creating "appearance anxiety," are the focus

Medical beauty advertising to create "appearance anxiety" will be severely cracked down!

On the afternoon of November 2, the State Administration for Market Regulation officially issued the "Guidelines for the Enforcement of Medical Beauty Advertising", prompting the market supervision department to rectify all kinds of medical beauty advertising chaos in accordance with the law, focus on solving the problems of great harm and concentrated reactions of the masses, and focus on cracking down on 9 situations such as creating "appearance anxiety".

Industry insiders believe that the strengthening of regulatory measures since June will help improve the standardization of the industry and promote the rational consumption of beauty seekers, and companies and institutions in the industry that operate legally and compliantly will benefit, which is conducive to the increase in the market share of head institutions.

Nine scenarios will be targeted

According to the law enforcement guidelines, the nine key crackdowns include: the use of advertising endorsements for medical beauty to make recommendation certificates, advertising drugs that have not been approved or filed by the drug management department, and creating "appearance anxiety", improperly associating poor appearance with negative evaluation factors such as "low energy", "laziness" and "poverty", or improperly associating outstanding appearance with positive evaluation factors such as "high quality", "diligence" and "success".

For medical aesthetic advertisements involving "doctors" and "experts", the market supervision department should also pay attention to the illegal advertising behaviors of doctors or professionals endorsing medical advertisements, false advertising behaviors that falsely claim that medical professionals are suspected of illegally practicing medicine, and disguised publication of medical aesthetic advertisements that appear in reports on medical personnel about medical aesthetic institutions.

The State Administration for Market Regulation pointed out that in the process of supervising medical beauty advertisements, market supervision departments at all levels find that relevant illegal acts are suspected of crimes, and transfer them to the public security organs in accordance with relevant regulations. Market supervision departments at all levels should guide and urge online platforms to establish and complete internal review mechanisms, and intercept illegal medical beauty advertising and publicity information in the process of advertising and providing Internet information services. Where network platform operators fail to perform platform responsibilities in accordance with law, the market supervision departments are to strictly investigate and handle them in accordance with law.

Since the beginning of this year, the regulatory authorities have made a combined fist against the chaos of the medical beauty market.

On June 10, the National Health Commission and eight other departments jointly issued the "Special Rectification Work Plan for Cracking Down on Illegal Medical Beauty Services", and decided to jointly carry out special rectification work to crack down on illegal medical beauty services from June to December 2021, severely crack down on illegal medical beauty activities, and standardize medical beauty service information and medical advertising.

Since then, the State Food and Drug Administration and the National Health Commission have given tips and prohibitions to medical beauty chaos through notices or popular science articles. On July 30, the General Office of the National Health Commission issued a notice on prohibiting the "surgery of cutting off the lower leg nerve and breaking the thin leg". On August 11, the official website of the State Food and Drug Administration released the article "Scientific Understanding of "Brush Acid" Beauty", prompting the public to pay attention to the risk of "brush acid treatment".

On August 27, the State Administration for Market Regulation issued the Guidelines for the Enforcement of Medical Beauty Advertising (Draft for Solicitation of Comments). The General Office of the State Administration of Radio and Television issued a notice on the evening of September 27 saying that due to the recent discovery of some "beauty loan" advertisements to attract young people with low or even interestless interest, inducing advanced consumption and ultra-high consumption, suspected of false publicity, deception and misleading consumers, causing adverse effects, the State Administration of Radio, Film and Television decided that from now on, all radio and television and online audio-visual institutions and platforms will stop broadcasting "beauty loans" and similar advertisements.

Industry leaders will benefit

According to Frost & Sullivan (global growth consulting company), the size of China's medical beauty service market in 2020 was 154.9 billion yuan, and the compound annual growth rate of the market size in the past five years was 19.41%, far higher than the growth rate of the global market of 3.91%. In terms of penetration rate, the penetration rate of medical aesthetic projects in China in 2019 was 2.5%, accounting for only half of Japan and 1/5 of South Korea, with significant room for improvement. Frost & Sullivan predicts that from 2020 to 2030, China's medical aesthetic service market will maintain a compound annual growth rate of about 15.48%, and the scale will reach 653.5 billion yuan in 2030.

Judging from the latest disclosed three quarterly reports, the revenue of A-share medical beauty plate companies continued to grow, and the quality of profitability was improved.

According to the statistics of Haitong Securities, the revenue of the A-share medical beauty sector in the first three quarters of 2021 increased by 79.8% year-on-year, the gross profit margin fell by 1.3% to 80% year-on-year, the level of expense ratio of the plate dropped significantly, and the scale advantage was significant; the net profit attributable to the mother in the first three quarters increased by 87.3% year-on-year, and the net profit margin increased by 1.2% to 29.7% year-on-year.

For example, the net profit attributable to the mother of Aimeike in the first three quarters reached 709 million yuan, a sharp increase of 144.09% year-on-year; the net profit attributable to the mother in the third quarter increased by 98.01% year-on-year to 283 million yuan, an increase of 53.54% from the previous quarter. The net profit attributable to the mother in the first three quarters of Aoyuan Meigu reached 211 million yuan, an increase of 319.27% year-on-year; the net profit attributable to the mother in the third quarter increased by 66.17% year-on-year to 161 million yuan, an increase of more than 800% from the previous quarter. The net profit attributable to the mother of Langzi shares in the first three quarters was 158 million yuan, an increase of 216.07% year-on-year; the net profit attributable to the mother in the third quarter was 0.65 billion yuan, an increase of 22.37% year-on-year, an increase of 12.07% month-on-month.

In response to the sharp increase in performance, Langzi shares said that the strong growth of business revenue caused by the increase of medical aesthetic institutions is one of the important reasons. Aoyuan Meigu also said in the quarterly report that the sharp increase in net profit was due to the company's normal operation of the chemical fiber sector in the first three quarters and the new expansion of the medical beauty branch business.

Everbright Securities believes that the strengthening of regulatory measures since June will help improve the standardization of the industry and promote the rational consumption of beauty seekers, and companies and institutions in the industry that operate legally and compliantly will benefit, which will benefit the share of head institutions.

EDIT: Leaf Pine