After refusing upstream guidance prices, where does the low price of So-Young come from?

“Over the past year, due to well-known reasons, many investors have asked me whether friction with upstream manufacturers has affected the sales of your Miracle Youth project.” On January 28th, in response to disputes over pricing rights with upstream suppliers in the medical aesthetics industry, Jin Xing, Chairman and CEO of Xinyang Group, stated, “Miracle Youth 3.0 has been launched since October last year, with sales increasing for three consecutive months. I believe these data can answer everyone’s concerns and questions.”

Xinyang is a company that is transitioning from an online medical aesthetics platform to a brick-and-mortar chain of clinics. Since 2025, due to the significantly lower prices of the Youth Needle products sold by Xinyang’s chain clinics compared to the manufacturer’s guidance prices, Xinyang has been publicly questioned by several upstream medical aesthetics companies such as Shengboma and Puli Yan.

At Xinyang Youth Clinic, the current price of one Puli Yan is 5,999 RMB, which is 60% lower than Puli Yan’s official guidance price. This is also the core business model proposed when Xinyang shifted from a platform to offline clinics—through bulk purchasing and a low-margin, high-volume approach, creating a terminal selling price significantly below the manufacturer’s guidance price.

An industry insider from a medical aesthetics institution revealed that institutions can bypass direct procurement channels from manufacturers and find lower-priced sources from different distributors. This also makes Xinyang’s model possible.

Regarding the market pricing of Xinyang’s model, Xiao E, founder and chairman of Meibo Biological, told the Economic Observer that the upstream medical aesthetics industry has shifted from a supply-scarce to a supply-sufficient stage. In the past, upstream companies controlled a core single product, and if supply was halted, institutions had no stock. Now, the product volume in the same sector has increased significantly, providing more options for institutions. “On the other hand, once the number of chain store locations and the volume of end treatments reach a certain scale, medical aesthetics institutions as purchasers naturally have a basis for price negotiations with upstream manufacturers,” Xiao E said. Upstream manufacturers face increased operational pressure, and only through innovation—such as new indications, new categories, and new solutions—can they hedge against downward price trends.

The homepage of the Xinyang Youth APP shows that its clinics are now located in 16 cities nationwide, with 50 stores. Industry data provided by Xinyang indicates that the largest domestic medical aesthetics institution has 39 stores, while other leading chain clinics have between 20 and 30 stores.

Conflict and Bargaining Power

The contentious product, the Youth Needle, is officially called “Poly-L-lactic Acid (PLLA) Facial Filler,” a long-lasting anti-aging medical aesthetic product that stimulates skin collagen regeneration through injection, shaping facial contours and reducing wrinkles. Currently, domestic companies such as Puli Yan, Aimee (300896), and Shengboma have been approved to produce and sell this product.

Since initiating its transformation, Xinyang has repeatedly been criticized for pricing the Youth Needle project well below the manufacturer’s guidance price, receiving “warnings” from upstream medical aesthetics suppliers: In April 2025, Xinyang launched the Miracle Youth 1.0 project using Puli Yan products, with a manufacturer-controlled price of 16,800 RMB per unit, while Xinyang’s price was 4,999 RMB per unit. After Puli Yan’s manufacturer notified national agents to stop supplying to Xinyang, the company launched Miracle Youth 2.0 in June of the same year, using Shengboma’s Aiviran Youth product, with a manufacturer-controlled price of 18,800 RMB per unit and a Xinyang price of 5,999 RMB per unit.

This pricing was again strongly criticized by Shengboma. In September 2025, Xinyang launched Miracle Youth 3.0, a product jointly customized with Xihong Biological, priced at 2,999 RMB per unit. In November, the Miracle Youth 3.0 Pretty version was released, with lower microsphere content, and a group-buy price of 999 RMB per unit for two people.

The Youth Needle series is Xinyang’s “flagship” product. Data from Xinyang shows that by December 2025, the treatment volume for the Youth Needle series exceeded 8,600 cases, more than tripling since September.

Several industry insiders from medical aesthetics institutions told the Economic Observer that the fundamental reason for conflicts between Xinyang and upstream suppliers is that Xinyang’s low prices disrupt the basic pricing structure of upstream manufacturers, prompting protests, supply cuts, or cancellation of cooperation.

Xiao E said that some upstream suppliers are large-scale and cover many medical aesthetics institutions nationwide. Once the downstream pricing system is broken, it could have a chain reaction affecting other channels, making it difficult for them to accept price reductions.

Regarding the pricing dispute, Jin Xing further responded on January 28th, stating that Xinyang does not sacrifice upstream profits to achieve low prices, but instead maintains a mutually beneficial cooperative relationship with upstream manufacturers through the scale advantage of its stores. “Prices are determined by supply and demand. To gain an advantage in negotiations with the supply chain, you need to reach a certain scale. Fifty stores is a sign of achieving scale advantage.”

As of now, Xinyang Youth Clinics have a monthly treatment volume of over 110,000 cases, with about 18 upstream equipment suppliers, and a total procurement of approximately 1,400 devices. Last year, the procurement amount from Thermage suppliers exceeded 63 million RMB. In terms of injections, there are 42 suppliers and 39 products, with a total purchase of over 700,000 vials, and procurement from upstream companies like Elcure exceeding 100 million RMB. Jin Xing believes that this volume and scale have established a stable, ongoing procurement relationship with upstream suppliers, which is also an important reason why they are willing to cooperate.

Jin Xing stated that in 2026, the company plans to add no fewer than 35 new stores, and by the end of 2026, the number of doctors will increase to 500, and nursing staff to 1,000.

Losses for Scale

“If we look back 2–5 years, Xinyang’s model might have faced significant difficulties because the supply chain was not sufficient,” Xiao E said. In the past, upstream suppliers offered limited products, and some core products were supplied from a single source for a long time. Once supply fluctuations occurred, institutions faced a situation of no stock. As the supply chain gradually improved, the number of approved products increased, and more substitutes became available, downstream institutions no longer had to rely on a single manufacturer.

The Youth Needle market is a typical sector where upstream supply has shifted from scarcity to abundance. As of press time, the National Medical Products Administration has approved 11 Youth Needles, with nearly 20 companies queued for registration, expecting a surge of product launches in 2026–2027. Jin Xing mentioned that although upstream medical aesthetics products are becoming more diverse, the pace varies across sectors. For categories like hyaluronic acid and Youth Needles, which are highly competitive, more reasonable prices may emerge, but for scarce supply projects like Thermage RF devices, prices will remain high in the short term.

Xiao E told the Economic Observer that upstream manufacturers can hedge downward price pressure by “creating incremental value”: first, expanding indications, such as new applications for the face, neck, and other areas; second, exploring growth in new categories like girl’s needles and collagen needles, which are differentiated products. “For any supplier, technological advantage and innovation are essential, and profits should be squeezed from these incremental areas.”

Regarding upstream segmentation, Jin Xing believes that only a few leading upstream suppliers can manage the entire chain from R&D, approval, production, to sales. Other upstream suppliers may shift to OEM roles, providing technology and R&D formulas to downstream institutions. This will diversify choices for medical aesthetics clinics.

Upstream suppliers will also face “strict selection.” Xiao E revealed that all products sold by Xinyang’s suppliers must undergo review and testing by Xinyang’s self-operated laboratory and meet unified delivery standards at 50 stores. This requirement is a significant challenge for both upstream and downstream parties.

By lowering its gross profit margin, Xinyang has achieved key indicators for its chain business—scaling up. Moving forward, the goal is to optimize operational metrics and improve overall gross profit margin. Since exploring its own chain of medical aesthetics clinics, Xinyang’s performance has been under pressure. In the first three quarters of 2025, the company reported quarterly losses, and its financial reports repeatedly cited ongoing losses mainly due to expansion of the medical aesthetics business. Jin Xing said that the operational goal for 2026 is to achieve quarterly overall profitability for the group, by offering consumers more products at different price tiers and implementing refined operations to improve gross margins.