How to do the hair transplant business after moving away from the "fixed price" model? | The Frontline

Caught in the contradiction between the "appearance economy" and "consumption downgrade", is there still a spring for the hair transplant market?

The hair transplant industry has been touted by capital as the "golden track in medical aesthetics". However, under the combined influence of internal and external factors such as the trust crisis triggered by the "price war", the uneven service quality, and the concentrated outbreak of post - operative disputes, this industry, which once claimed to have a market scale of over 100 billion yuan, is falling into collective reflection.

When the traditional "hair follicle porter" model encounters a bottleneck, should hair transplant institutions continue to exhaust themselves in the marketing involution or return to the essence of medicine?

At the recent 8th China Hair Academic Conference, Cui Shaofang, the executive director of Dami Hair Transplant, shared her observations (edited) with 36Kr:

No longer competing on "flat - rate pricing"

Q In the past year, what changes have taken place in the hair transplant and hair care market?

A Two statistics we collected really shocked me. One is the number of hair transplant institutions. Currently, including large - scale chain brands, top - tier public hospitals, and single - store clinics, the number of hair transplant institutions in China has reached 3,000.

Over the past few years, the demand for hair transplants has always existed. But as more people enter the market, the price war has become extremely fierce. The price of hair transplant services is even lower than before the pandemic. If the price war continues, the industry will surely not last long. Services that used to cost 20,000 - 30,000 yuan in the past, now some institutions, without considering the unit quantity, directly offer a "package deal for a few thousand yuan". There is a certain amount of falsehood in this, and it will inevitably affect the quality of professional services. Moreover, although the "flat - rate pricing" model simplifies the charging process to some extent, it easily blurs the value boundary of medical services, leading to the hair transplant industry becoming more and more marketing - oriented and operating medical institutions with a commercial mindset.

We no longer want to attract customers with low - price promotions and then sell them high - priced services. Based on the current market situation, we also don't want to engage in price competition. We will charge according to the normal pricing. So, last year, Dami changed the "flat - rate pricing" model back to pricing based on the number of hair follicles.

This model also makes consumption more transparent. Every penny can be attributed to a specific hair follicle unit, avoiding the ambiguity of "package pricing". We advocate diagnosing before treating, allowing consumers to determine the number of hair follicles they need to transplant based on professional diagnosis results, achieving precise medicine of "transplanting as many as needed".

Another statistic is that last year, we observed that pure daily hair care and hair - nourishing brands in the market were very popular, but some of them disappeared this year, and both the customer flow and revenue are declining. Against the background of consumption downgrade, people tend to only choose "essential" projects, and these services do not have therapeutic effects.

Q You mentioned that hair care services may not be an immediate market necessity, but many hair transplant institutions are expanding their hair - nourishing product lines as a "second growth curve". For example, Dami has launched the 'Xiaomai' brand for hair nourishing. Why?

A It's different. Those services refer to pure consumer - oriented ones, such as hair washing and hair conditioning. 'Xiaomai' is positioned as a therapeutic hair - nourishing brand with clinic qualifications, aiming to achieve hair - strengthening or hair - growing effects. This should be considered a semi - essential need.

Currently, we have opened the franchise window, focusing on finding partners who have experience in operating hair - nourishing brands and are willing to upgrade traditional consumer - level stores to medical - level stores. This type of partner has experience and a team but lacks medical resources and brand endorsement. We can help them build a system.

We don't want to seek franchises blindly, so we are not chasing a very fast expansion speed. This year's goal is to open 50 stores. Previously, the pilot store of 'Xiaomai' in Nanshan, Shenzhen has achieved profitability, and we hope to continue with this model.

Hair transplant business accounts for 70% of total revenue, and store expansion slows down

Q How is Dami's overall business expansion going?

A Last year's business was generally the same as the year before. First - and second - tier cities are still the most important. The five cities of Beijing, Shanghai, Guangzhou, Shenzhen, and Hangzhou account for 50% - 60% of the company's total revenue. Among them, the hair transplant business accounts for 65% - 70% of the revenue.

In terms of stores, currently, Dami has 40 hair transplant stores globally (including 1 in Chicago, USA). In China, 50 stores are enough because most provincial capitals are already covered. In the past three years, we only closed one store in East China because the stores in surrounding cities were relatively dense. At the same time, we oppose blind expansion because customers only need to have this surgery once in a lifetime, so there is no need for too many stores.

The average customer spending is showing an upward trend. Last year, we adjusted our business strategy. As mentioned before, we returned to the essence of medicine and were no longer affected by the market's "price war". We also followed the price - war strategy for some time, but we felt it deviated from Dami's original intention.

Originally, from a medical perspective, doctors first make a diagnosis, then prepare materials and a treatment plan, and finally decide whether to perform a hair transplant surgery or just do hair - strengthening. If they don't even make a diagnosis but directly quote a price and the number of hair follicles to be transplanted, it goes against the original intention of medicine.

The hair transplant technology was originally introduced from overseas, and the earliest model was to charge by the unit. So, we should have a reasonable income, neither raising prices nor overly reducing them. We take into account the current consumers' willingness to spend, the difference compared to before the pandemic, and also respect the value of medical services.

After a year of exploration, we found that the market is more willing to pay than before. Customers are price - sensitive, but they don't only focus on low prices.

In addition, we are also diversifying our services. In addition to medical - level hair transplant projects, we are also exploring more non - surgical aesthetic projects, such as female hairline transplantation, eyebrow transplantation, male beard and temple hair transplantation, and a "chronic disease management system" for hair loss problems.