The Quiet Q1 of 2026: What Is Behind It, and Where It Points

2025 was busy beyond my ability to describe it. Fifty-two Class III registration certificates were granted in a single year, covering hyaluronic acid, botulinum toxin, collagen, PLLA, PCL, agarose, calcium hydroxylapatite and energy-based devices — almost every category launching at once.

So much blossom that the eye could not settle anywhere.

There was a time when a company announced a launch only once the certificate was in hand, and the market had been waiting for it. Now the filing gets a press release, the funding round gets a press release, entering the clinic gets one, the first patient enrolled gets one, and technical review passed, certificate imminent, production started, first batch off the line — each gets another round. Every micro-milestone is expected to detonate across everyone’s feed. In practice, the more the story is told, the more numb the audience becomes.

Then came the first quarter of 2026, and it went noticeably quiet.

“Quiet” is not quite the right word, of course — certificates were still granted here and there, new indications were approved, and there were still launch events for old wine in new bottles. But market activity, real selling investment and promotional intensity did genuinely subside.

If the keyword for 2025 was “dazed” — the stress response of an over-stimulated market — then the first quarter of 2026 feels like a refractory period. Clinics are no longer excited by new products, and manufacturers no longer know what would excite the market.

That is only the surface behaviour. Underneath it: manufacturers really have run out of money, and manufacturers have realised the money they did spend went to the wrong places, or was simply scattered — leaving them in a strategic fog about what to do next.

A new product launch used to mean hundreds of millions of RMB in sales, supported by marketing budgets in the high tens of millions to over a hundred million, with baseline promotional spend starting in the tens of millions. Collections funded marketing, marketing drove the next round of sales, and the loop reinforced itself.

Then look at what 2025 actually delivered: plenty of manufacturers launched with great fanfare and finished the year at around RMB 50 million in sales. Between that and the expected “hundreds of millions a year” lies an enormous gap.

In an article last July I ran a single-brand profit-and-loss model: annual operating expenditure of roughly RMB 70–100 million for a direct-sales model, and a survival line of roughly RMB 50–80 million for a distributor model. Below RMB 70 million in annual sales, a company does not generate enough profit to fund a normal year of marketing investment and normal operations. That judgement has now had its first real-world confirmation.

Worse, it has become a vicious circle. The first collections of the year may still fund an opening wave of marketing, but it is the net profit and cash position at year-end that actually set the following year’s budget — and profit expectations are broadly poor right now. The quiet is not a choice. It is imposed.

Looking only inside the industry, one might still hope that new materials and stronger products break the deadlock. Pull the lens back, though, and the difficulty may well persist for a long time. The top ten players hold under 5% of the market, and more than 80% of medical-aesthetics companies are less than five years old. A structure this fragmented is itself a statement that a large number of companies are unstable, and that the rate of attrition is accelerating.

I recently read Goldman Sachs’ Asia-Pacific economic outlook published at the start of 2026. On the surface the numbers are not pessimistic: China GDP growth is forecast at 4.8%, above consensus. The structural tension is what deserves attention. Building an economy driven by consumption and services “will take years, if not decades” — the view of Goldman’s chief China economist, Hui Shan. For now, export strength is masking the real fatigue on the domestic consumption side.

Beyond the trade-in subsidies, the policy tilt towards supporting the supply side also showed up directly in last year’s market entries in medical aesthetics: a wave of upstream manufacturers poured into consumer healthcare. But expanding supply does not automatically revive consumption. Consumers lacking both confidence and capacity to spend is a structural problem that product innovation cannot solve in the short run. So my read is relatively pessimistic: the market is contracting, the number of players is rising, and each share gets thinner.

This year’s March 15 broadcast exposed the mess around exosomes in medical aesthetics: production under borrowed certificates, “renting the stage” arrangements, unlicensed products injected into people. No exosome drug has been approved in China at all, yet it is common knowledge that a grey market has been running for four or five years.

A friend asked me last year whether I was bullish on exosomes. As someone who looked closely at that niche three or four years ago and was genuinely interested in going deeper, I said no outright. Now that it has been exposed, the companies involved were raided overnight, platforms delisted the products immediately, and the business is effectively finished. Rebranding as EV — extracellular vesicles — will not help either. The root cause is not that genuine exosomes are bad science; it is that the industry spent the concept before it had earned it.

Exosomes are not an isolated case. In an industry addicted to minting new concepts, clinical results get commercialised early, products reach consumers before validation is complete, and marketing packaging does the rest. Grey areas accumulate until the reckoning becomes inevitable.

Let me bring in the OpenAI–Anthropic contest here. A little over a year ago I was, like many people, a ChatGPT loyalist. From late last year I cancelled my ChatGPT Pro subscription without hesitation, moved to Claude, upgraded to a MAX account soon after, and have recommended it to more people than I can count.

Consider that Anthropic, having finished its 1.0 model, refused to rush to market and kept working on safety — missing the first pot of gold in the AI market. Precisely because of that safety, it now holds steady contracts with 80% of enterprise users: exactly the high-value segment it set out to target. In two years its revenue grew a hundredfold, and in 2026 it finally overtook OpenAI to become the largest AI company in the world. ChatGPT captured 80% of the consumer market, but the value the public assigns it is twenty dollars.

The annual March 15 exposé hits far more than the exosome companies. Firms that have scraped by for three or four years running borderline businesses were already holding on at the edge; a single shock can be the last straw. Those eliminated will not only be the new entrants of 2025. Companies that came into the market years earlier and never got traction are, if anything, more fragile.

I have also picked up a dangerous signal: capacity. Almost every manufacturer today sells less than the capacity it once announced. At investor and distributor roadshows over the past few years, everyone competed on the number of production lines, annual capacity, GMP floor area. Those numbers used to signal strength; before long they may become a heavy balance-sheet burden. Several equity research notes now say it plainly: the supply-side dividend in hyaluronic acid is over, supply exceeds demand, capacity is in surplus.

Over the next two years, as actual volumes fall far short of installed capacity, unit costs rise, payback periods stretch, and distributor contract disputes multiply, the whole industry will enter a painful but unavoidable phase of clearing inventory and clearing capacity. It is the same story Chinese property is living through right now.

I would rather not call this process “survival of the fittest”, because the phrase implies a kind of justice — the good stay, the weak leave. Reality does not work that way.

Plenty of products are genuinely good, some with real differentiation; on materials and on the product itself I am very positive about them. And yet a company with a poor read on the medical-aesthetics market, the wrong team, or a misjudged channel strategy will still be eliminated. A good product is not a good business — a reality that companies crossing over from pharma or medical devices often find hard to accept.

One example in passing (aimed at no one in particular; several cases blended together): some companies will not even supply demo syringes for hands-on practice, and cannot distinguish between the samples needed to build a medical case and the samples a clinic needs for practice — or what that difference does to the business.

If the most basic moves are missing, and nobody knows how to make them, then frankly this is not a business to be in. Cases like that are not rare: a swing here, a swing there, a year spent staging launch events for a so-called new product that is really new packaging, with no serious medical education, no operational support for clinics, not even a basic accumulation of clinical cases and adverse-event handling. And then puzzlement about why the market will not open.

Price wars are not the way out. When everyone cuts price, price stops being an advantage and simply accelerates the evaporation of industry profit.

Everyone wants a profit product; in practice everyone is running a traffic product. A large part of the reason is that the product’s value cannot carry the price its owner wants. Volume and coverage then cannot match the established products either, and there is no brand pull to fall back on — a bind with no easy exit.

The competition that will actually matter is differentiation on judgement, on capability and on the product itself. Among the manufacturers and new entrants in today’s core market, how many genuinely have all three?

My read is that 2026 stays subdued, and conservatively that this lasts at least another two years.

There are optimistic voices, of course. Brokerages and consultancies still publish striking forecasts for the size of medical aesthetics — over RMB 600 billion by 2030, 12% compound annual growth. I respect the different vantage point; those calls may rest on a particular capital logic and time horizon. From where I sit, watching the front line, the gap between the optimism in the data and the thinness of the reality is not small.

There is good news too. New materials, new products and new indications with real substance will still reach the market this year; technical innovation has not stopped. But technical innovation is not commercial success, and approval is not market access. The distance between them is far greater than most people imagine.

For the companies and the people still in the game, the first question is not how to win but how to hold on — to stay alive, and get through this winter. Capital, judgement, capability and product strength all matter immeasurably more in a downturn. Players without those cards, however glorious their past, may quietly disappear within two years.

What is coming is a reshuffle. What gets washed out will not necessarily be the worst, and what remains will not necessarily be the best product.

Data cited in this article: Goldman Sachs 2026 Asia Economic Outlook; NMPA medical-device approval announcements; Founder Securities medical-aesthetics research; CCTV March 15 Gala coverage