The Pricing Myths of Medical-Aesthetics Products

Several new products are about to launch, and multiple versions of their pricing strategy are already circulating. I hear brands have spent days behind closed doors searching for the one “right price”.

For every medical-aesthetics brand, pricing strategy is the first answer sheet the business model has to hand in.

Over the past few years, Ellansé and AestheFill set a memorable high-water mark in both price and volume for regenerative injectables. Everyone who followed has hoped to replicate that model, assuming that a similar material would produce a similar path to success. What actually happened, again and again: launch high, break the price, load the channel, terminate the contract, watch volume stall.

There is a well-known line about the P for pricing in the marketing 4Ps: pricing is a science that is also an art. It has rational, deductive logic in it and a component of intuitive judgement. A price is not just a number. It is bound up with the product’s value positioning, the channel strategy and the cadence of communication. It is the starting point of the entire commercial strategy.

So let us go back to fundamentals, work systematically through the common approaches to pricing, and use real cases from this industry to examine what supports a price and how the market responds to it.

• Cost-based pricing

The most basic method: take manufacturing, registration and channel costs, add a margin, and arrive at a “rational price”. In medical aesthetics this model mostly applies to low-value consumables and some compounded hyaluronic acid products. Products like these are frequently not sold on their own but paired with other treatments, so the pricing logic leans toward controlling the cost of a bundle rather than anchoring standalone value.

Driving cost down does not extend a product’s life. Consider the Indian pharmaceutical-excipient manufacturer recently in the news: a long-running low-price strategy took market share at the cost of safety control, and ended in a major manufacturing incident. A cautionary tale for the industry.

• Competition-based pricing

Set the price by anchoring to comparable products already in the market. Most of the newly arriving regenerative products, for instance, have chosen to anchor to existing prices.

But behind the mainstream price sits powerful brand education, plus continuing post-launch investment in expanded clinical research and expert consensus endorsement. It was never just the name of the material.

More importantly, price determines who your customer is: the mid-market, value-conscious segment, or a small, high-end, premium clientele. Without a clear reason to be different, a price war arrives quickly as competitors multiply. The market will give you honest feedback.

• Demand-based pricing

If you can land precisely in an unmet treatment need, clinical and commercial value is easier to establish and the room for a reasonable price is wider.

Consider Hearty (Hitop) building the neck-line category, collagen used in the tear trough, and the first-approved PCL and PLLA products. Products like these can construct value perception across several dimensions — indication, clinical result, regulatory advantage — and so enjoy far more pricing flexibility. That should be combined with the company’s own capacity and brand foundation, with the target market, customer profile, market size and price sensitivity all researched as variables and converted into the final pricing strategy.

• Mental-accounting pricing

In other words, the consumer’s subjective judgement of whether it is worth it. This approach centres on perceived value.

The same product, given scarcity or authoritative endorsement, earns far more tolerance for a high price. Labels like “imported from Europe, a bestseller for 20 years” or “the highest-share PLLA in Taiwan” set a high psychological anchor.

Similarly, consumers in the largest cities lean toward products imported from Europe and the US and toward brands with history. So when Sculptra or Radiesse launched, they carried a genuine advantage in claiming the top price in their category.

But this only works if the brand maintains and manages the customer’s trust curve over the long term. It cannot be done with a one-off launch campaign.

• Category characteristics

This factor is particularly interesting in our industry. Once microneedling rollers and at-home devices were pushed hard by livestream sellers, falling prices for skin-booster products became more or less inevitable. Injectable prices, by contrast, have been far more stable because physician technique adds real value.

If a brand in the skin-booster market today still wants to hold a relatively high price without a psychological pricing advantage, my advice would be to bind the physician-administered nature of the treatment tightly to the product’s value, emphasising what the product offers in injection technique and product characteristics. That is one way out for a premium skin booster.

• Product function

Product strength is the foundation. A registration certificate is a threshold, not the same thing as product strength — as everyone in the industry knows.

• Brand

is what protects a price. It secures a particular perception of and confidence in product quality, and sometimes it is also an expression of social identity, so that using the product carries a symbolic meaning. That is why, when choosing a target market, aspiration and projection strategies are so often used to attract the consumers who want to become the target group. Done well, it is a beautiful piece of strategy.

• Marketing and communication cost

Getting the product and brand message in front of consumers and lifting awareness requires a certain proportion of spend. In upstream medical aesthetics, depending on stage and sales volume, that proportion is typically 15–30%, and higher during a new product’s investment phase. Some brands are extremely frugal and unwilling to spend; others do not know the industry, have no strategic plan and spend badly. Both severely discount the commercial objective. I am planning a separate piece on how to set and execute an annual budget sensibly.

• Switching cost

The classic case is products popular in international markets. If the price here sits far above what it costs a consumer to travel abroad for treatment, or if the grey-market channel cannot be controlled, the legitimate domestic market will lose volume. That is the main reason trips to Korea and Taiwan remain popular and grey-market channels persist despite repeated crackdowns.

• Perception of a reasonable price band

As noted above, mass-consumer perception of the skin-booster category has been educated by livestream shopping and by beauty salons into a few-hundred-yuan band. Resetting consumer perception of what a quality skin booster should cost requires either much greater value or a genuinely persuasive reason. Brands not content with the injectable category who want to enter skin boosters for more share need the ability to support the price properly — otherwise they pick up sesame seeds and drop the watermelon.

The price-equals-quality perception comes from the Veblen effect: crudely, you get what you pay for, and the more expensive it is the better consumers assume it to be. What matters more, though, is the stable support system behind the price. Only that carries a product further and more steadily:

Brand equity:

Have physicians and consumers formed an anchor around the brand? Do they trust its safety and clinical performance? Brand equity is a network of trust and word of mouth built over time out of clinical feedback, educational content and authoritative citation.

Channel system:

Direct or distributor? Choosing distributors is most directly about covering the market faster and recovering early cash pressure sooner. Going direct means higher cost, requires real financial strength and a highly professional team, and delivers greater brand value. Under the same pricing strategy, both models require the ability to transmit the value behind the price all the way to the end point and make it stick — particularly for brands that want it both ways, which is a serious test of channel management capability for anyone new to this market.

Organisational capability:

Can you sustain velocity? Can you run different, granular strategies in different segments? Training content, promotional assets, in-clinic conversion tools, physician programmes, treatment packaging, best-practice sharing — all of it.

Copy a competitor’s price with no brand, no product differentiation and no team behind it, on the assumption that a Class III certificate plus a batch of distributors loaded with stock will sell like wildfire, and you may well harvest one round of buyers. But the market educates fast, and the company’s credibility is spent. Like the boy who cried wolf, a company in that position rarely gets a second chance — and it has also spent the industry’s appetite for new products generally. That is exactly why more and more clinics now take a wait-and-see position on new launches, or would rather wait for an international brand’s equivalent, or stick with an older product they already trust. That is the power of brand, and the bar for a new product to enter the market and succeed will only keep rising.

Back to commercial first principles: a price ultimately has to convert into profit. The wider the margin, the more stakeholders it can support:

Clinics: will they buy it and promote it? (At the clinic, who are you competing with? Are you selling a product or a treatment? Which category are you entering? Do you want margin-led or differentiation-led demand, and in what weighting?)

Physicians: will they use it repeatedly and recommend it? (Is it a single high-dose, long-interval product, or one with frequent repeat purchase? What does the physician earn per unit of chair time?)

Distributors: will they keep stocking it and keep putting effort into it?

(Established distributors typically carry a wider portfolio than most upstream companies. On a BCG matrix, of course they all want the stars — but in reality the stars are usually run direct by the manufacturer. Which means that for a distributor, the overwhelming majority of products are question marks: big opportunity, good prospects, but with marketing problems to solve. If the manufacturer is capable enough, distributors will accept a somewhat lower margin — neither distributors nor clinics are purely margin-driven. But if the manufacturer then fails to supply the organisational capability, and above all fails to solve velocity and repeat purchase, the product quickly becomes a dog and gets dropped. At that point the manufacturer will be asked for a higher margin simply to hold the position a little longer.)

The company: does the margin support the commercial strategy it is meant to fund — the team, the medical education programme, the marketing plan, the velocity mechanism, the brand positioning? This requires the founder to have a clear view of the standard of talent and the standard of activity the market demands.

Above a high price, repeat purchase is king

For consumer-facing medical-aesthetics products, long-term profit does not come from selling at a high price. It comes from stable velocity and sustained repeat purchase. Which means the pricing strategy has to match the market position and a precise customer profile closely.

Take luxury as the analogy. Even a house like Hermès could not escape the general downturn in Chinese consumption in 2024. And yet the market showed structural growth at the same time — performance luxury and quiet-luxury brands kept rising against the trend. Loro Piana, Brunello Cucinelli, Arc’teryx, Descente, Kolon and Salomon all markedly increased their penetration of China’s affluent consumers, and not on price alone: on precise insight into the target group’s way of life, and on product positioning.

The same applies here. Pricing is not a bet that a high price will win. It is a bridge built carefully between a product’s value and its intended audience. In 2024, an established injectable sold fewer than 500 units nationally in the first half; several “heavyweight products” did a few tens of millions of yuan over six months. AestheFill, meanwhile, still delivered RMB 760 million in sales after the Soyoung pricing controversy — the combined result of brand equity, channel capacity and pricing strategy.

A product priced in the middle of the market but with a high repeat rate, balanced channel margins and strong physician acceptance will usually end up ahead on total profit and long-term performance — well ahead of a high-priced hit whose repeat rate keeps declining.

A good pricing strategy is not fixed. It needs a control mechanism and a flexible monitoring system.

Plenty of brands say they set the price high at the start knowing it will come down after launch. I would strongly advise against this. Stability in the price structure is the core of market confidence; only a strong ability to hold price — which may mean giving up some of the market — gives commercial partners the confidence to keep walking with you.

That said, pricing strategy genuinely is not fixed. The commercial environment, competitive situation, market moving down-tier, commercial strategy and channel adjustments can all mean the price needs to move within a band. But that should be a response to market trends and demand, not a device for lifting short-term volume.

Which is why we all need to keep doing the following:

Research across multiple dimensions: the price band physicians will accept, target consumers’ price sensitivity, distributors’ margin expectations, competitors’ price structures, and the state of the channel.

A tiered pricing model: defensible price bands and commercial plans for different channel tiers and different sales objectives.

In business school, professors repeat one iron law: “In a price war there are only losers.”

In this industry, a price that is out of position is not fixed by cutting it. It is fixed by holding it up — through clear positioning, genuine delivery of value, long-term brand education and the cultivation of trust.

Porter’s competitive strategy: competing on price alone slides easily into destructive competition and ultimately drags down profitability across the whole industry.

“When all competitors try to compete on price, the result is a downward spiral of margins and profits.” — Michael Porter, Competitive Strategy

In other words: if your cost structure cannot sustain a low price over the long run, but you try to buy share by cutting, you will find yourself in the price-war mud, losing both margin and brand value.

The prisoner’s dilemma and the tragedy of the price war — game theory

In a duopoly (say brand A and brand B), both holding price produces good profits for both. But the moment one cuts, the other is forced to follow, and both end up at zero profit.

This is the classic **prisoner’s dilemma**.

“Once a price war starts, the company has entered a lose-lose game — even if you win share, you lose margin and trust.”

The value-price gap model

• Cut the price without raising perceived value and you widen the value-price gap, so customers conclude it is cheap and still not worth buying;
• Once you drag the price anchor down, consumers redefine what your brand is worth, and moving back up is very hard;
• What a price war ultimately spends is the customer’s confidence that you are worth it — and that is harder to recover than volume. Blue Ocean Strategy

The central problem of a red-ocean market is price competition:

“In the red ocean, companies fight over the same customers and frequently descend into a bloody price war, compressing margins to the point where the business cannot be sustained.”

Blue Ocean Strategy argues instead for creating new demand and building differentiated value, sidestepping the price war and achieving sustainable growth.

(It seems impossible to avoid the Soyoung–AestheFill pricing dispute, though there is really nothing much to say. Soyoung accused AestheFill of price control; what was actually being compared was physician injection technique versus operating a skin-booster device, and a clinic’s cost of customer acquisition versus the traffic pool Soyoung’s own network already covers. The comparison is not like-for-like, and the commercial motive is fairly obvious. So for the health of the industry, better to let it go quiet. If comments start an unnecessary debate I will delete them; I have no wish to add heat to this topic.)

Pricing is not imitation, and it is not wishful thinking. It is a commercial decision.

In an industry with this much variance, a product’s pricing strategy needs clear supporting logic behind it: a defined target market, a differentiated competitive advantage, a systematic design for repeat purchase, and a channel mechanism where everyone wins.

What we need is more rational long-term thinking, more rigorous reasoning and deeper market insight.

A healthy pricing strategy is the alignment of capabilities across market structure, product value, organisational capability and brand building. It is what makes the whole business sustainable.

To everyone sitting in a launch meeting arguing about price: may you see not only the appeal of the number, but the systemic cost and the long-term value behind it.