Medical aesthetics platform So Young (Nasdaq: SY) recently released its Q2 2025 financial results, showing continued decline from Q1 performance. The company achieved total revenue of 379 million yuan, down 7% year-over-year, while net loss reached 36 million yuan, compared to a profit of 18.9 million yuan in the same period last year.

The revenue decline was closely related to the reduced number of medical service providers subscribing to information services on So Young's platform, according to the financial report. Against the backdrop of overall business pressure, So Young's offline light medical aesthetics chain business, which the company has been heavily investing in recent years, has opened new growth opportunities.

Financial data shows that So Young's medical aesthetics treatment service revenue surged 426.1% year-over-year in Q2, reaching 144 million yuan. This figure not only far exceeded other business segments but also became So Young's largest revenue source for the first time.

"Last quarter, the light medical aesthetics chain business officially became the group's largest revenue source," said Jin Xing, founder of So Young Group. As the light medical aesthetics chain business grows to a certain scale, it inevitably forms competitive relationships with medical aesthetics institutions that are customers of the legacy business. "This zero-sum situation makes the current period a painful phase of transitioning between old and new growth drivers, and financially, we are in the most challenging stage," Jin noted.

Despite facing transformation challenges, So Young remains confident about the synergistic development of new and old businesses. "So Young's chain business currently only provides dozens of standardized anti-aging projects, while the medical aesthetics industry has hundreds of different projects. For personalized needs of beauty seekers, we can recommend high-quality partner institutions on our platform. In the long term, new and old businesses will form a win-win cooperation trend, but this requires time to develop," Jin explained.

Currently, So Young is transforming from a traditional medical aesthetics platform's B2B information intermediary model to a B2C vertical industry integrator. However, competition in the medical aesthetics market has always been fierce, and how So Young can consolidate its advantages and achieve sustainable growth during this transformation has become a focus of industry attention.

**Painful Transition Between Old and New Growth Drivers**

As So Young's founding business, the information and booking services business continued to face pressure in Q2 2025. Financial data shows that this business segment generated revenue of 135.2 million yuan during the period, down 35.6% from 209.7 million yuan in the same period of 2024. Looking at a longer timeline, this business's revenue already declined 34.1% year-over-year to 143 million yuan in Q1 this year.

This declining trend is directly related to ecological changes in the medical aesthetics industry and intensified market competition. The medical aesthetics industry currently faces dual challenges of "intensified competition and rising consumer demands." Comprehensive platforms like Alibaba Health and Meituan continue to divert B-side customers through their layout across the medical aesthetics upstream and downstream industry chain, while Douyin and Xiaohongshu leverage "live streaming and short video content marketing" to reconstruct traffic entry points.

Under multiple competitive pressures, So Young's traditional "online information intermediary" model faces significant challenges, and traditional business growth momentum is gradually weakening.

At the critical juncture of industry restructuring and online business pressure, So Young launched its strategic transformation in 2021. Jin introduced that while the industry generally favored upstream medical aesthetics product tracks, So Young chose to focus on downstream institutional chain tracks. "We judged that the future market will definitely be dominated by light medical aesthetics, and the industry will see the emergence of large-scale giant chains; while upstream barriers will gradually disappear as registration certificates increase."

From transformation results, the offline light medical aesthetics chain business has achieved phased progress. Financial data shows that as of June 30, 2025, So Young has established 29 officially operating light medical aesthetics chain brand stores in 9 major cities including Beijing, Shanghai, Guangzhou, and Shenzhen, with 25 centers achieving positive monthly operating cash flow.

By operational stage, 9 stores are in the growth phase, averaging 2.617 million yuan revenue per center; 14 are in the development phase, averaging 6.403 million yuan revenue per center; and 6 mature centers operating for more than 12 months average 5.199 million yuan revenue each.

However, offline business expansion faces inherent industry barriers. Jin frankly acknowledged, "Every step offline is particularly challenging. Upstream product registration certificates take 3-5 years from application to approval, with fixed cycles; each store as a medical institution requires separate approval, taking nearly a year from preparation to licensing; medical team building, coordination, and service improvement require time to develop."

This objective industry pattern requires teams accustomed to rapid internet expansion to adapt to "slow-paced growth." Jin believes that the underlying contradiction in the medical aesthetics industry is "sufficient demand but shortage of quality supply," which constitutes the core opportunity for So Young's offline expansion. "We expect to achieve a thousand-store scale within 8 to 10 years, using industry chain layout to reduce cost structure, gaining customers through high cost-effectiveness to expand scale, then further optimizing costs through scale effects to form a positive cycle."

Regarding industry development trends, Jin predicts that with technological progress and accelerated upstream product approvals, product prices in high-value tracks such as regenerative treatments will see cliff-like declines in the next six months to a year, directly improving institutional profit margins. He emphasized that so-called "low prices" mean prices returning to reasonable ranges. "The real cost of medical aesthetics products is far lower than terminal selling prices. Reducing costs through deep industry chain cultivation is not price warfare, but achieving matching between price and value."

Jin stated that when industry prices return to reasonable levels and quality supply becomes sufficient, the era of "mass medical aesthetics" will accelerate. "This can not only support So Young's thousand-store goal but also push the entire medical aesthetics industry from 'trust crisis' to 'value recognition.'"

**Giants Compete for Medical Aesthetics Market**

The "2024 Medical Aesthetics Industry White Paper" shows that China's beauty industry market size reached 280.4 billion yuan in 2023, with expectations to reach 381.6 billion yuan by 2025. The enormous market potential has attracted internet giants to accelerate entry, with companies like Alibaba Health, Meituan, ByteDance, and PDD Holdings increasing investments in the medical aesthetics track, driving industry competition into a new stage of deep "online + offline" integration.

Leading platforms have distinctive layout strategies. JD Health officially launched its first self-operated offline medical aesthetics clinic "JD Medical Aesthetics (Yizhuang Store)" in July 2025, not only connecting to JD APP's medical aesthetics channel but also forming strategic synergy with the medical aesthetics subsidiary established in March, with services covering four popular light medical aesthetics projects: whitening and rejuvenation, hydro-light sculpting, wrinkle removal and face slimming, and photoelectric anti-aging.

Alibaba leverages ecosystem synergy advantages to create a medical aesthetics service matrix. Online, Tmall International introduces top international medical aesthetics equipment brands like Cynosure and Fillmed through cross-border channels; offline, local lifestyle platform Koubei partners with leading institutions like Ever Union and Mylike to create the "Anxin Mei" alliance, currently covering 136 cities nationwide.

Meituan continues to strengthen its platform role, focusing on serving as an online traffic entry point for offline medical aesthetics institutions. As early as 2019, Meituan separated its medical aesthetics business from the lifestyle services division into a dedicated medical aesthetics business unit, subsequently continuously improving its service system: launching "Fangxin Mei Genuine Verification," "Polaris Medical Aesthetics Rankings," and "Sinan Doctor Rankings" in 2023 to standardize institution and doctor selection criteria through transparent evaluation systems; further upgrading in 2025 with "Fangxin Mei Worry-Free Protection," using a "service + protection" model to address industry pain points.

As of the end of 2024, Meituan's platform has connected nearly 3,000 medical aesthetics institutions and established a dedicated entry point on the App homepage for user convenience in finding nearby services.

Regarding intensified industry competition, Jin analyzed, "Online platforms tend toward 'winner-takes-all,' while offline requires diverse development. The core of offline medical aesthetics services lies in time accumulation, especially in industries where 'people serve people' - employees are not code and cannot be controlled by simple commands. Getting employees to provide quality service from the heart depends on organizational culture development and service detail optimization, with no shortcuts. Balancing efficiency with experience, cost-effectiveness with quality requires consumer needs insights based on long-term accumulation."

Jin further pointed out that the industry still has significant growth potential. "China's medical aesthetics penetration rate is only 5%, far below South Korea's 20%. If more institutions can jointly provide high-quality, cost-effective services and improve the public's 'fearful' impression of medical aesthetics, it will enhance overall industry trust and drive natural penetration rate growth. When the pie grows bigger, every participant benefits."

In his view, the ultimate competitive goal of offline medical aesthetics chains is not to defeat competitors but to "rebuild industry trust through time and attention to detail, which requires joint efforts from all practitioners."

Jin expects that in an era of deep AI technology penetration, the medical aesthetics industry may see the emergence of super-giant chain brands with over 100,000 stores. "Traditional chain models rely on multi-level manual management and often face efficiency bottlenecks at scales of 30,000-40,000 stores. Now, using AI for personnel management and intelligent quality control has become possible - AI can analyze the standardization level of treatment procedures through video and audio analysis, significantly reducing management difficulty in chain expansion."

Notably, as capital accelerates entry, the medical aesthetics industry is entering an era of strong regulation. Industry research indicates that regulatory departments have issued series of industry standards and policy regulations covering all aspects from R&D registration, production to sales in recent years, promoting standardized industry development. Against the backdrop of stricter compliance requirements and high barriers for R&D innovation and large-scale production, companies with "compliance" DNA, full industry chain layout from research to production and sales, and rich product portfolios are more likely to occupy advantageous positions in the rapidly developing industry wave.