Putian-Linked Medical Groups Enter Medical Aesthetics Installment Financing: Four Strategic Signals Emerge
Medical aesthetics is highly favored by women. Every woman has an innate desire for beauty and the right to undergo medical aesthetic procedures. The medical aesthetics market has been a substantial and lucrative sector from its inception, naturally attracting numerous Putian-affiliated medical institutions that provide plastic and cosmetic surgery services.
However, this time, what has sparked surprise regarding the Putian-affiliated medical groups is their investment in numerous medical aesthetics installment-payment projects—either through direct investment or participatory investment—prompting outside observers to exclaim:Is the Putian medical sector moving into consumer finance? Is it expanding into internet healthcare?
The reality is far more complex than it appears. This represents a small-scale trial by the Putian medical network, serving as its strategic response to the surge in mobile healthcare. It sends four key signals that warrant serious attention from the industry.
Most healthcare professionals are well aware that the medical industry is characterized by high investment costs, long payback periods, and substantial capital requirements. Having operated offline hospitals for many years, the Putian-affiliated healthcare groups have accumulated significant capital strength and demonstrated a willingness to invest, making consumer finance a natural part of their investment portfolio.
Consumer finance carries relatively controllable user risk, and the medical aesthetics service process can be fully managed in-house. Naturally, users’ medical services are also delivered by affiliated or subsidiary hospitals, creating a win-win situation that is hard to pass up.
Looking back at the development of the medical aesthetics industry in recent years, while the sector has grown and consumers have become educated and accustomed to these services, medical costs have continued to climb steadily. To encourage greater uptake of medical aesthetic services while alleviating patients’ financial burden, business models such as bundled purchasing, installment payments, and leveraging consumer finance are emerging.
For those with a longer-term strategic vision, they will actively expand aesthetic medicine users’ consumption and enhance their engagement by integrating medical aesthetic services with women’s health and slimming businesses. This integration aims to encourage repeat purchases, transforming installment-based aesthetic medicine services from a traffic gateway for “women’s beauty” into an achievable upgrade toward a broader “women’s health” traffic gateway.
Ideals are often idealistic, while reality is stark. While installment-based consumer finance appears promising, significant challenges remain in building user trust, enhancing recognition of medical aesthetic services, and improving user stickiness. These are critical areas that the Putian-affiliated medical groups should prioritize. Furthermore, key tasks such as acquiring and converting medical aesthetic customers must be addressed; otherwise, the ambition to dominate the “medical aesthetic installment” market will remain nothing more than a pipe dream.
According to the "China Internet Healthcare Development Report (2016)," the market size of China's internet healthcare industry reached RMB 15.73 billion in 2015, with a growth rate of 37.98%. Among this, the mobile healthcare market size reached RMB 4.27 billion, with a growth rate of 44.7%.
Faced with such a vast internet healthcare market, the Putian medical group, which accounts for more than 80% of China’s medical service institutions, could not afford to remain indifferent. However, for a long time, the hospitals under its operation have lacked unified branding; major medical stakeholders hold cross-shareholdings without any single party holding controlling interest, making equity consolidation highly challenging. Furthermore, shareholders hold divergent views on internet healthcare. These factors have collectively led to sluggish development of internet healthcare within the Putian medical system, giving rise to skeptics, opponents, and blind followers alike.
In contrast to the Putian medical network, internet healthcare platforms such as Chunyu Doctor and WeDoctor Group have experienced rapid growth. As patient awareness of mobile health platforms has steadily increased, these developments have alerted senior executives within the Putian medical network and caused significant fluctuations in patient visitation rates at their hospitals. Consequently, the Putian medical network has been compelled to acknowledge the development of internet healthcare and recognize the value of mobile health platforms.
Meanwhile, the medical aesthetics industry is highly mature, with a large number of Putian-affiliated hospitals and high consumer recognition. In certain regions and sectors, it has become an essential demand for beauty-conscious women. Naturally, this “lucrative healthcare sector” has become the “testing ground” for Putian-affiliated medical groups in the realm of internet healthcare.
The Putian medical group’s current choice is undoubtedly correct. However, as you advance the phased development of major medical aesthetic institutions, please place greater emphasis on integrating medical services with mobile health solutions. Learn to collaborate with major platforms such as BAT (Baidu, Alibaba, and Tencent), and establish necessary strategic synergies with industry-specific medical aesthetic platforms. Without a broad industry-wide vision and long-term strategic perspective, navigating these turbulent waters will be exceedingly difficult.
In recent years, the Putian-affiliated medical sector has faced numerous challenges. From controversies surrounding Baidu’s medical advertising placements to the 2016 “Wei Zexi incident,” public distrust in the industry has grown significantly, leading to a marked decline in patient visits to hospitals and substantially tarnishing the reputation of private hospitals.
Users’ distrust has directly led to a decline in patient inflow, which in turn has compelled Putian-affiliated medical institutions to bid more aggressively for medical keywords at higher costs and to adopt more radical joint marketing strategies—engaging in ground-level promotion and government public relations whenever their competitors do. This has driven customer acquisition costs ever higher. Ultimately, it is the patients who bear the cost, while dissatisfied patients further erode public trust in private healthcare. This situation has formed a vicious cycle that is difficult to break in the short term.
This vicious cycle has left everyone with no choice but to invest; otherwise, patient visits to hospitals would plummet. As a result, many have repeatedly suffered from this predicament. Consequently, the “medical aesthetics” sector has become a target of interest. It is a mature industry featuring low-risk technologies and a user base with near-essential demand. What an attractive industry and business model! It also offers the potential to build strong customer reputation, as patients’ beautiful faces and graceful figures serve as living advertisements for private medical aesthetic institutions.
For the Putian-affiliated medical groups, their expectations for medical aesthetics extend far beyond mere monetary gains or substantial profits. Industry leaders view it as an "emerging customer acquisition channel." Medical aesthetic installment plans can win the favor of new users, and when these users or their friends and family fall ill, institutions associated with such financing options naturally become their preferred choice for medical care.
Yes, “medical aesthetic installment plans” can acquire new customers at a low cost. They also serve as a strategic move by leading Putian-affiliated healthcare providers to position themselves for future mobile health businesses. However, how to maximize the effectiveness of installment financing, integrate more medical services, and activate users’ surrounding networks are core challenges that these pioneers must address. These factors are also key to determining whether this strategic move will succeed.
Putian-affiliated healthcare providers operate within the medical services industry, which encompasses pre-consultation, intra-consultation, and post-consultation phases, each with distinct service priorities. An overview of the current landscape reveals that these providers place greater emphasis on attracting patients to their facilities during the pre-consultation phase and on maximizing patient value during the intra-consultation phase. However, they lack sufficient motivation to innovate in medical services and fall short in fully exploring and enhancing the value of diagnostic and therapeutic services for patients.
For medical aesthetics consumers, attention to the value of pre-consultation medical services is particularly high, which explains the widespread popularity of medical aesthetics communities. While pre-consultation expert outreach, offline events, and online medical marketing are hallmark strengths of Putian-affiliated healthcare providers, these services fall far short of meeting the needs of medical aesthetics consumers. Instead, there is a demand for higher-value services, such as medical aesthetics education, risk assessment, case studies, and interactions with renowned experts in the field.
Those vying for dominance in the medical aesthetics installment payment sector are, to varying degrees, affiliated with medical aesthetics practitioners from the Putian healthcare network. The majority of them seek to innovate their service concepts and explore pathways that do not rely solely on advertising, aiming instead for greater integration with offline dissemination of medical content, online services provided by renowned experts, and online platform operations.
In short, the Putian medical group’s foray into installment-based financing for aesthetic medicine is a positive development in the long run, as it will further integrate Putian-affiliated healthcare providers into internet-based medical services. While the future is bright, the path ahead will be winding; lofty aspirations can only be realized through more solid and steady steps.
This article is a guest submission and does not represent the views of VCBeat. Author: Wang Pengfei, Consulting Director at a well-known domestic consulting firm in Shanghai; China-certified Management Consultant, China-certified Economist, and China-certified Senior Marketing Professional. He serves as a contributing expert and columnist for renowned domestic and international magazines and websites such as Business Review and Manager; as a contributing expert and author for prominent Chinese industry publications including Tianxia Wangshang, Sellers, and Sales & Marketing; and as a columnist for various internet platforms such as iResearch, Paidai.com, Meihua Network, and Global Brand Network. He has provided consulting and strategic planning services to numerous well-known clients both in China and abroad, including Bright Food Group, Yunnan Investment Group, Wahaha, Foma Foods, King Koil Mattresses (USA), 61 Health Mobile Healthcare, Baihe.com, Huifu Group’s cross-border e-commerce division, and Hong Kong Hongci Medical Group.