How Gengmei Plans to Connect Users and Industry Stakeholders in 2017 Following Its RMB 345 Million Series C Funding

The medical aesthetics industry boasts highly promising growth prospects. In 2016, the market size of China’s medical aesthetics sector reached RMB 796.3 billion, with an annual growth rate nearing 20%, and it was projected to surpass the trillion-yuan mark by 2019. China’s medical cosmetics industry emerged in the 1980s and has since developed a complete industrial chain. The upstream segment comprises manufacturers of medical devices and materials/consumables. In the midstream, alongside the dermatology or cosmetic departments of public hospitals, private cosmetic hospitals and beauty salons have risen to prominence. Meanwhile, downstream medical aesthetics apps are experiencing a period of robust growth, increasingly becoming favored targets for capital investment.

In 2016, Gengmei completed a C-round financing of RMB 345 million, the largest single funding round in the history of China’s medical aesthetics industry. By leveraging internet-based solutions to effectively address the pain points of consumers, physicians, and medical aesthetics institutions, Gengmei aims to integrate multiple segments across the upstream and downstream of the medical industry chain. Combining this with robust internet traffic resources, the company seeks to further capture a significant share of the broad health consumption market. What new strategic initiatives and changes has Gengmei implemented over the past year?

Data Growth and Industry Recognition

As of December 2016, Gengmei had established long-term partnerships with over 6,000 medical institutions and hospitals worldwide, hosted more than 10,000 professional physicians, amassed over 18 million platform users, and featured nearly 2.6 million verified live-streamed cosmetic surgery cases.

On the 2016 Analysys Qianfan APP Annual Rankings, Gengmei ranked first in the medical aesthetics sector. According to third-party data from TalkingData, the Gengmei APP consistently remained among the top three beauty industry apps in 2016, standing as the only medical aesthetics platform within this top tier, with coverage and activity rates far exceeding those of comparable platforms. At the end of 2016, Gengmei APP received the “Most Watched Enterprise of the Year Award” from VCBeat.

Newly Launched Services and Features

Features: In August 2016, Gengmei pioneered the launch of insurance services among numerous medical aesthetics platforms. In October 2016, Gengmei introduced consumer finance services, including installment payments and Bai Tiao. In January 2017, the Gengmei app launched its live-streaming feature.

Services: In August 2016, Gengmei announced its Series C financing of RMB 345 million and officially launched the “Top 100 Physician IP” initiative. Subsequently, Gengmei held the Young Physicians Competition and the 3rd Gengmei Top Physicians Awards.

Breakthroughs in Partner Organizations

In 2016, the Gengmei app partnered with more than 20 brands in the consumer upgrade sector, including Jumei Youpin, Jiayuan.com, Baihe Network, Ping An Good Doctor, Xiaozhu Short-Term Rentals, Enjoy, Ziroom, Boohee, FitTime, Blued, Wandou Gongzhu, Heyjucie, and Lilishuo. These collaborations spanned areas such as consumer healthcare, dating and marriage, housing, beauty, food, and fitness and weight loss. In early 2017, Gengmei entered into a strategic partnership with 58 Daojia, providing consumer healthcare services such as dental care and minimally invasive cosmetic procedures.

For Gengmei and even the entire medical aesthetics industry, a major event in 2016 that left a deep impression on outside observers was Gengmei’s Series C financing round. Not only was the funding scale substantial, but it also attracted a diverse group of investors with varied backgrounds, including Tencent, CHJ Jewellery, Suning Universal, China Securities Co., Ltd., Fosun Pharma, and Legend Capital. Together with existing shareholders such as Matrix Partners China, Sequoia Capital China, and VIVO Capital, this meant that virtually all mainstream investors in China’s primary and secondary capital markets who were interested in the internet-enabled medical aesthetics sector had become stakeholders in Gengmei.

Their past business and investment activities have penetrated various segments of China’s medical aesthetics market, including offline clinics, online channels, R&D of devices and consumables, supply chain, and financial services. However, these efforts have been relatively fragmented and operated in silos. As a platform, Gengmei can integrate these high-quality resources to deliver more valuable, consolidated services to the entire industry.

Following the completion of its Series C financing, Gengmei has not only launched medical aesthetics financial services such as installment payment plans and insurance but will also intensify its efforts on the industry side by unveiling the “100 Physician IP Initiative.” This initiative aims to provide comprehensive support—including through an online hospital platform, funding, and resources—to help outstanding plastic surgeons build their personal brands, thereby enabling Chinese consumers to more easily find qualified plastic surgeons. Such initiatives are underpinned by a robust financial foundation.

Furthermore, Gengmei also plans to accelerate its expansion in the medical aesthetics market through mergers and acquisitions. “The internet-based medical aesthetics market is about to enter a phase of consolidation,” predicted Liu Di, founder of Gengmei, noting that larger companies have already validated their business models, leaving limited opportunities for smaller firms and startups.

It is evident that, following its development and strategic layout in 2016, Gengmei has moved closer to its goals. Liu Di, founder of Gengmei, expressed his vision for the future: “Gengmei aims to be more than just a combination of Dianping and Taobao for the medical aesthetics industry. We aspire to become the Alibaba of medical aesthetics and even the broader consumer healthcare sector, serving as the essential infrastructure—like water, electricity, and gas—for the industry. By connecting all stakeholders, including consumers, doctors, clinics, pharmaceutical manufacturers, and financial institutions, we aim to make the industry’s services and operations more efficient, safe, and orderly.”

7 New Trends

Medical aesthetics possesses the dual attributes of healthcare and consumerism. Coupled with extreme information asymmetry in the plastic surgery industry, the policy allowing physicians to practice at multiple locations, and the drive toward consumption upgrades, the key variable in the medical aesthetics market lies in how internet-based sharing can better connect beauty seekers with physicians. For Gengmei, opportunities arise from the influx of new resources brought by numerous outstanding investors, while the primary challenge stems from how to more effectively leverage and revitalize existing resources.

1. Physician IP will become a mainstream industry concept, further highlighting the brand value of physicians, while companies specializing in physician brand management are rapidly increasing.

2. While a large-scale wave of physician entrepreneurship remains an aspirational goal, physicians are rapidly strengthening their capabilities in operations, marketing, sales, and other key areas.

3. The business model of the Putian-affiliated medical groups is fading out, and healthcare institution operators will be tested on their ability to execute refined operations.

4. Offline institutions are gradually reducing their investment proportions in Baidu and other traditional channels, while actively exploring new customer acquisition channels.

5. A wave of boutique clinics led by a new generation of medical aesthetic practitioners born in the 1980s will emerge, but they will face challenges related to high replicability.

6. Capital markets remain interested in the medical aesthetics sector, but they seek targets with strong profitability and scalability.

7. Clinic transactions saw robust demand and supply; 2017 marked a year of transition between new and established capital in the medical aesthetics industry.

Aesthetic Medicine Celebrity Doctor IP Program

In response to these major trends, Gengmei has adapted by launching an initiative to cultivate over 100 “Key Opinion Leader (KOL) Physicians in Medical Aesthetics” through three core pillars: foundational support, customer operations, and brand management. “Physician IP” refers to a personal brand built around physicians who possess exceptional professional expertise and personal charisma, capable of attracting users long-term through their technical skills, case outcomes, and service attitude, thereby generating secondary word-of-mouth promotion and ultimately realizing multi-dimensional commercial value for themselves, their affiliated institutions, and the hosting platform.

In the medical aesthetics industry, high-quality physician resources have consistently been in short supply. A key challenge in improving the current state of the industry is helping physicians integrate their technical expertise, reputation, service quality, and personal charisma into a differentiated personal brand that earns user trust. In fact, Gengmei has been steadily advancing its efforts to build “physician IPs.” At its inception, Liu Di led the team in inviting experts from the top 30 plastic surgery departments at public tertiary hospitals across China to join the Gengmei platform, ensuring the authority and safety of its physician resources. Over the past three years, leveraging its robust new media matrix and specialized medical aesthetics community, Gengmei has assisted numerous outstanding physicians in publishing their own popular science columns, thereby garnering the trust of tens of millions of consumers.

In early 2016, Gengmei launched the “Gengmei Elite Doctor Team” initiative to shatter the stereotypical image of doctors as rigid and uninteresting. It aimed to cultivate a youthful and fashionable brand identity for top plastic surgeons from leading Grade-A tertiary hospitals, thereby helping younger consumers better appreciate these seasoned specialists’ expertise and philosophy. To achieve this goal, Gengmei provides participating physicians with a comprehensive service matrix encompassing branding, e-commerce, appointment scheduling, facilities, after-sales support, traffic acquisition, financial services, and manufacturer partnerships. Gengmei collectively refers to these offerings as the “Air Hospital.” Benchmarking against a traditional brick-and-mortar hospital, the “Air Hospital” model allows physicians to focus solely on performing surgeries using their technical skills, while all other operational and managerial tasks are handled by Gengmei through its integrated online and offline resources.

Gengmei will also launch a series of IP-supporting initiatives centered around the “Airborne Hospital,” including an industry database, ambulatory surgery centers, business assistants, cloud customer service, full-cycle user management, precise user matching, manufacturer partnerships, customized physician branding, and a Medical Aesthetics Academy. Clearly, recognizing physicians as the core and top priority of the medical aesthetics industry, Gengmei has spared no effort in serving them, with 2016 marking a year of solid foundation-building.

As a bridge between doctors and patients, Liu Di shared an anecdote about how Gengmei initially attracted doctors and hospitals to join its platform: “In 2013, Gengmei entered the market with a novel approach to media content. At that time, Gengmei’s self-operated Weibo and WeChat accounts, along with its high-viewership video programs, attracted many early adopters. Leveraging this professionally oriented positioning, Gengmei gained strong support from leading experts in the industry at prestigious hospitals such as Ba Dachu Plastic Surgery Hospital, Shanghai Ninth People’s Hospital, Nanfang Hospital of Guangzhou, and Xijing Hospital. Given the significant influence and appeal of top-tier medical resources, other hospitals and doctors subsequently joined the platform.” After years of steady accumulation and breakthroughs in 2016, the number of doctors on the Gengmei platform exceeded 10,000.

In traditional plastic and cosmetic surgery, patients were primarily drawn to hospitals by consultants and Baidu’s pay-per-click advertisements, leaving their choice of surgeon largely to chance. The “internetization” and standardization of the entire aesthetic medicine process enable users to more efficiently find qualified surgeons suited to their needs, ensuring safer and more reassuring procedures. This has been the core mission that Gengmei has been driving forward in recent years.

In response, Gengmei first conducts on-site inspections of hospitals and physicians one by one to verify their qualifications, strictly ensuring that all institutions listed on the platform are legally compliant. Platform physicians must hold the Physician Qualification Certificate, the Physician Practicing Certificate, and the Principal Attending Physician Qualification Certificate for Medical Aesthetics. Furthermore, in the event of disputes between users and hospitals, users can contact Gengmei immediately for mediation. For patients who have experienced unsuccessful cosmetic procedures, Gengmei provides advance compensation services and legal support.

In addition to establishing dedicated risk control and customer service teams, Gengmei has launched accident insurance that now covers over 90% of medical aesthetic procedures. The platform has also introduced VIP services for single-procedure treatments, whereby users who activate VIP status receive “Outcome Insurance.” If users are dissatisfied with their surgical results and meet the eligibility criteria, they can receive insurance compensation to cover revision costs. To accommodate budget-conscious young users, Gengmei has rolled out installment payment plans for medical aesthetic services, allowing users to enhance their appearance first and pay later.

Positive Interaction Among the Platform, Consumers, and Doctors

Gengmei boasts a strong community attribute. The diaries posted by users are user-generated content (UGC) that combines social and commercial value. Through this UGC, consumers can evaluate and identify high-quality hospitals and physicians. Physicians attract patient flow through UGC at a lower cost compared to traditional marketing channels, while also placing greater emphasis on the quality of their surgical procedures. The platform, consumers, and physicians each derive distinct benefits, forming a mature and virtuous cycle.

In the future, Gengmei will place greater emphasis on in-depth communication and interaction between aesthetic seekers and doctors. In 2016, Gengmei launched its live-streaming feature, which is accessible to all users, primarily targeting aesthetic seekers and physicians. Aesthetic seekers can broadcast their consultation processes, surgical procedures, as well as share their post-operative recovery progress and experiences. Plastic surgeons can conduct live sessions to answer questions about medical aesthetics knowledge. As each doctor has their own areas of expertise, they can host live streams on various topics, thereby better disseminating knowledge about medical aesthetics to aesthetic seekers.

During this process, aesthetic seekers can acquire more medical aesthetics information through live streams hosted by influencers and physicians, thereby making informed consumption decisions; meanwhile, physicians can leverage live streaming—a format that facilitates deep interaction with users—to build their personal brands, seize the initiative in the wave of internet-based medical aesthetics marketing, and gain a competitive edge.

Liu Di stated, “The Gengmei platform embodies both authority and impartiality. Its authority stems from having the largest and most active network of cooperating public Grade 3A hospitals and physicians. Its impartiality lies in the authenticity of its case studies and the preservation of users’ genuine reviews. Unless they violate laws or community guidelines, we never delete any posts, even those containing negative reviews of specific doctors. We aim to enable users to make safe medical aesthetic consumption decisions based on authentic word-of-mouth, making Gengmei’s posts the most impartial.”

Integration of B2B and B2C Businesses

A robust user base and strong community attributes deliver tangible benefits to both aesthetic seekers and providers. For aesthetic seekers, the platform facilitates the identification of suitable, high-quality plastic surgeons. When considering a specific procedure, most users browse individual doctors’ case portfolios and reviews on the Gengmei platform. They ultimately select a doctor or hospital that best fits their needs, boasting favorable reputation, impressive case outcomes (which reflect technical proficiency, aesthetic sensibility, and service quality), and appropriate pricing, and then privately message to schedule an appointment.

For merchants, Gengmei provides a comprehensive service matrix for onboarded physicians, encompassing branding, e-commerce, appointment scheduling, venue services, after-sales support, traffic acquisition, financial services, and manufacturer partnerships, to better facilitate their entrepreneurial ventures.

Leveraging the extensive industry background and resources of its shareholders, Gengmei is more ambitious in its ToB operations and asset allocation, and will explore a wider range of business models in the ToB sector. In the healthcare field, becoming a platform requires the effective integration of both ToB and ToC businesses.

Regarding business models, Liu Di believes that the foundation of a platform’s profitability lies in the service value it delivers to the entire industry. Gengmei provides services such as branding, traffic acquisition, online transactions, enterprise solutions, and consumer finance, thereby enhancing operational efficiency, reducing costs, and expanding profit margins for businesses. As a result, Gengmei has established multiple revenue streams across its end-to-end service process.

Currently, Gengmei generates revenue through e-commerce transaction commissions, advertising, and enterprise-level services for businesses. In 2017, as the Gengmei platform deepened its engagement with the industry, additional profit models will naturally continue to expand.

Many people view plastic surgery as a life-changing, major decision, resulting in low frequency of procedures. In reality, the medical aesthetics industry is dedicated to enhancing beauty. Abroad, it has matured into a high-frequency lifestyle service, rather than a sector characterized by stringent requirements and high transaction barriers. Gengmei conveys the message that medical aesthetics is an accessible and enjoyable way to improve quality of life. It offers transformation and new possibilities, positioning itself as a consumer category on par with fitness and travel. This encourages beauty seekers to open the Gengmei app more frequently in search of tips for enhancing their appearance.

Regarding user engagement, the platform incentivizes users to update their cosmetic surgery diaries through cashback rewards, while features such as encyclopedia searches and private messaging with doctors enable users to acquire more knowledge about cosmetic procedures. In terms of community operations, Gengmei has introduced sections like “Tree Hole,” “Gengmei Trial Room,” and “Expert Columns,” and has launched features such as live video streaming to enhance user activity and stickiness.

How is user feedback? Liu Di shared a real-life story. Previously, a friend sought non-surgical cosmetic procedures from an unlicensed practitioner, resulting in facial swelling that lasted for a week. Yet, when asked to recommend a provider, she still referred this same practitioner, simply because he was the only one she knew and she considered the outcome not too bad. This illustrates how information asymmetry can lead aesthetic seekers to accept suboptimal choices.

Later, both this friend and her close companion became loyal users of Gengmei. Whenever they faced consumer decisions, no matter how closely recommended a doctor was by intimate friends, they would still search on Gengmei to find the best doctors in Beijing for double eyelid surgery or laser skin care.

For physicians, the more accomplished they are, the more likely they are to recommend Gengmei to their peers, aesthetic seekers, and friends. These doctors have told me that they find a sense of professional pride on Gengmei, because a physician’s excellence on the platform is judged by service quality and user reputation, rather than by Baidu advertising rankings or how much profit they generate for their employers.

Attack

If one keyword were to summarize Gengmei’s 2017, Liu Di’s answer would be “advancing.” Building on three years of exploration, particularly in 2016, Gengmei received substantial support from industrial investors and industry partners, enabling it to integrate more industry resources. Naturally, this also drew greater resistance from established stakeholders. These “old guard” players had achieved considerable success but left behind many unresolved issues. As the industry’s “bad boy,” Gengmei has consistently chosen to stand on the side of serving users, unafraid to disrupt numerous longstanding rules of the game.

Solidify the Foundation

Since its inception, Gengmei has established a clear business vision: to become a trusted partner for every clinic and physician, growing alongside them. Over the past three years, from initial patient-doctor consultations to the gradual expansion into community services, e-commerce, financial services, and supply chain operations, each step has been aimed at solidifying and realizing this foundational vision. While numerous tactical adjustments have inevitably occurred along the way, the strategic focus has remained steadfastly on a well-defined objective. The Gengmei team has devoted far more time to determining “how to achieve it” than to debating “whether to adjust course.”

Addressing Weaknesses

In 2017, Gengmei will also seek to recruit individuals who can help address its weaknesses. Over the previous three years, Gengmei focused on executing the low-hanging fruit in the internet space, including product development, traffic acquisition, and sales. However, as one delves deeper, it becomes evident that significant opportunities and wealth in the healthcare industry stem from the integration of online and offline services. Whether in manufacturing or institutional sectors, capturing value in these areas requires industry-savvy professionals.

Make connections

Gengmei is connecting all stakeholders in the industry—including consumers, physicians, clinics, pharmaceutical manufacturers, and financial institutions—through a suite of in-app features and services such as community forums, e-commerce, financial solutions, and enterprise services. This integration helps consumers find qualified physicians and enables providers to establish clinics more easily, thereby making the entire industry’s operations more efficient, secure, and orderly. For users, Gengmei aims to ensure that “everyone can find the right physician”; for businesses, its long-term goal is to make it so that “no clinic is difficult to open.”

Liu Di stated that Gengmei has always positioned itself as a platform company and therefore will not engage directly in the specific operations of medical aesthetics. Gengmei’s vision is to become the largest consumer healthcare service platform. Beyond medical aesthetics, Gengmei has expanded its business into other niche sectors, such as dentistry and anti-aging.