Once touted as the pinnacle of medical aesthetics, China’s hair transplant industry is now facing a period of reckoning. Capital once poured in, lured by projections that the market could exceed RMB 100 billion (USD 14 billion). Today, the industry is grappling with eroding consumer trust, aggressive price wars, inconsistent service quality, and a rising number of post-procedure disputes.
As the traditional “follicle relocation” model reaches its limits, clinics are faced with a choice: continue burning through marketing budgets or return to their medical foundations.
At the latest annual meeting of the Chinese Hair Research Society, Cui Shaofang, executive director at hair solutions firm Barley, spoke with 36Kr about the latest shifts in the field.
The following transcript has been edited and consolidated for brevity and clarity.
36Kr: What changes have you seen in the hair transplant and hair care market over the past year?
Cui Shaofang (CS): Two developments stood out to me. First, the number of providers—including major chains, public hospitals, and independent clinics—has now surpassed 3,000 across China.
Demand for hair transplants has been steady, but the influx of new players has intensified pricing competition. Today, many procedures are offered at prices even lower than pre-pandemic levels. Services that once cost RMB 20,000–30,000 (USD 2,800–4,200) are now marketed as all-inclusive packages for just a few thousand yuan, with no cap on grafts. That’s misleading and ultimately compromises professional standards.
Flat-rate pricing may simplify billing, but it obscures the value of medical care and pushes clinics to behave more like marketing operations than healthcare providers. At Barley, we’ve opted out of this race. We no longer attract customers with low entry prices only to upsell them later. Last year, we returned to a per-follicle pricing model.
This structure improves transparency. Every yuan spent is tied to a defined number of follicles. It removes the ambiguity of bundled pricing and reinforces our diagnosis-first approach. Patients receive a professional assessment before any treatment, ensuring they understand exactly how many follicles they need. It’s our way of practicing precision medicine.
The second trend is the rise and fall of consumer-grade hair care brands. Many shampoo and scalp care startups boomed last year but have since declined. With consumers more budget-conscious, people are sticking to essentials, leaving non-therapeutic products increasingly overlooked.
36Kr: Many clinics are expanding into hair retention products. Barley has its sub-brand, Xiaomai. How is it different?
CS: We’re not in the same category. Most competitors offer basic consumer products like shampoo and conditioner. Xiaomai, by contrast, operates under a medical license and focuses on therapeutic solutions for hair retention and regrowth. It’s what we’d call a semi-essential service.
We’ve recently opened Xiaomai to franchise partners, but we’re selective. We’re looking for operators who have experience in the hair care space and are willing to upgrade from retail-focused shops to licensed medical clinics. These partners usually have solid teams and operational know-how. What they lack are medical capabilities and brand credibility, which we can provide.
Our expansion is measured, not aggressive. Our goal this year is to open 50 Xiaomai locations. The pilot clinic in Shenzhen’s Nanshan district is already profitable, and we aim to replicate that success.
36Kr: What is Barley’s overall growth trajectory?
CS: Our performance last year was comparable to the year before. Our core business remains centered in first- and second-tier cities, with Beijing, Shanghai, Guangzhou, Shenzhen, and Hangzhou accounting for 50–60% of revenue. Hair transplant procedures still represent 65–70% of our income.
We currently operate 40 clinics globally, including one in Chicago. Domestic expansion is capped at 50 clinics, as we’ve already covered the major provincial capitals. Over the past three years, we’ve closed only one clinic, in eastern China, due to overlapping market coverage.
Most people undergo a hair transplant only once in their lifetime, so there’s little justification for unchecked expansion.
We’ve also seen average customer transaction values begin to climb again. Last year, we shifted our operational focus back to clinical integrity. Price wars can distort priorities. At one point, we were reacting to market pressure in a way that felt disconnected from Barley’s original mission.
A proper clinical journey begins with diagnosis, followed by treatment planning, and then a decision: surgery or retention therapy. When pricing is prioritized over medical judgment, the entire process is undermined.
The per-graft pricing model originally came from overseas, and it remains the norm there. So we’re not raising prices, but we’re also refusing to slash them unsustainably. We’re balancing post-pandemic consumer sentiment with the true value of medical services.
After a year of operating under this model, we’ve found that customers are actually more receptive. While they remain price-sensitive, they aren’t blindly chasing the lowest quote.
We’re also diversifying our offerings. Beyond traditional procedures, we now provide treatments such as female hairline adjustments, eyebrow transplants, facial hair procedures for men, and long-term care for chronic hair loss conditions. These additions help us address a broader spectrum of patient needs.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Hu Xiangyun for 36Kr.