Marching into Japan, the Unsatisfied Need in Emerging Cosmetology Market
On Dec. 24th, SoYoung formed an alliance with YCISM on building cosmetology channel to Japan for potential cosmetology customers. This is the first time SoYoung invest for oversea business and going-out might be a signal of the market rise.
On December 24th, SoYoung(新氧) signed the strategic alliance agreement with YCISM(宜采) on building cosmetology channel to Japan for potential cosmetology customers. The former is the largest cosmetology community app and platform in the world, while the later is an experienced cosmetology agent to serve customers to go to Japan for cosmetic or plastic surgery. This is the first time SoYoung invest for oversea business and going-out might be a signal of the market rise.
As introduced in another EqualOcean’s article, SoYoung is the first cosmetology unicorn entered series E and valued at USD 5.5 billion within less than five years. SoYoung is founded in 2013, and in 2016, its CEO claimed SoYoung had started to make a profit. In 2017, SoYoung’s app Xinyang and its official website’s total hit exceeded the then-largest cosmetology platform reaself.com, which is based in the U.S.
In the latest cosmetology industry white book published by SoYoung, the market penetration boosted over 300% from 2015’s 2.4% to current 7.4% and the customer pool has enlarged to 20 million. Comparing to China’s neighbor, South Korea’s cosmetology market penetration of 42%, China’s market penetration is only 1/6 of its number, which implies the great potential of China’s cosmetology market. Along with the growing customer base, the major force is post-90s, which is 40.41% of the total. Besides, the post-00s cannot be ignored since they take 18.81% of the market. It is worth mention that most post-00s are underage, and those who accept cosmetology services may be considered as those who can legally receive cosmetology services. Hence, post-00s are the next major force in cosmetology customer base.
With the growing customer base, the cosmetology institutes and facilities’ distribution is extremely imbalanced. From SoYoung’s investigation of 351 cities in China, the top 10 alpha cities own 53.7% of cosmetology practitioners while the rest 341 cities share less than half of the total cosmetology practitioners, but the customers are scattered in every city. Therefore, the next step is developing the cosmetology market outside those alpha cities like beta cities or abroad. Considering the cosmetology is still a young industry in China, the related talent pool is limited and culturing cosmetology practitioners will take years, but the demand for cosmetology services grows faster than culturing practitioners. Based on the conflict between demand and supply, SoYoung and YCISM’s strategic cooperation targets at the gap, which is also the chance for both.
Japan is famed for its artisan spirit and meticulousness in techniques, and hence convey a sense of trustworthy and responsible, which are the most important characteristics to attract cosmetology customers. SoYoung has the oversea business but not the investment, and this is the first time SoYoung invested outside of China. Opening the channel to connect cosmetology markets from China and Japan through the agency is a curve way to march in the overseas market when SoYoung has little experience in oversea practice. YCISM is a company offering “Japan cosmetology service”, a one-stop cosmetology service solution. Cooperating with YCISM can save SoYoung from detouring in providing oversea cosmetology services through its platforms.
The cooperation seems to satisfy the cosmetology service demand but going abroad for cosmetology services could only satisfy who can afford the long-distance trip. Going abroad is an option for those who preferred a more reputable and reliable while can afford for. The difference between the two markets might first bring challenges to SoYoung, in which most are from the policy side. But this is a chance for SoYoung to learn from doing cross-border business. For a special industry that is related to healthcare, the globalized market complicates the already-complicated cosmetology market. While expanding the overseas business, enterprises should always remember to protect customers’ benefits when the environment gets more complex.