Demand for Beauty Care Procedures Increases
The author is an analyst of NH Investment & Securities. He can be reached at ryan.ra@nhqv.com. -- Ed.
Beauty care players’ share performances remain relatively insulated from Covid-19 crisis
Covid-19 has wreaked havoc across a range of industries, including travel, transportation, and DFS. Export-oriented companies were hit first, followed by domestic consumer goods plays, which suffered a blow from tepid domestic consumer sentiment. As for beauty care firms, while they too have inevitably faced Covid-19-related impacts, their 1Q20 share performances remained relatively insulated from the crisis versus those of players in other industries.
Concerns exist that recovery in beauty care industry might be slower than hoped
In 2Q20, with the pandemic subsiding in Korea and other Asian countries, business conditions for medical aesthetics companies began to normalize. Still, given that the crisis has yet to end completely, there remain concerns that people might still be reluctant towards visiting clinics.
Emergency relief funds allowed for use in dermal/plastic surgery clinics
In Korea, over February~March (when the pandemic reached its peak in Korea) and March~May (when the government adopted strict social distancing measures), while consumers continued to show interest in beauty care procedures and plastic surgeries, amid lingering fears towards coronavirus infections, it appears that only a limited number of procedures were actually carried out. But, since the government began offering emergency relief funds, which are allowed for use in dermal/plastic surgery clinics, people have flocked to clinics to receive beauty care procedures and plastic surgeries. Of note, a large number of dermal/plastic surgery clinics have undertaken aggressive promotion efforts emphasizing their acceptance of emergency relief funds.
Demand for beauty care procedures increased on offering of emergency relief funds
In fact, for those who have been hesitant to receive beauty care procedures/plastic surgeries owing to long recovery periods, now could be an ideal time to undergo such procedures, given that the widespread wearing of masks and ongoing social distancing would help to minimize the exposure of one’s face to the public. All in all, even amid decreased inbound traffic as a result of Covid-19, the Korean beauty care market has been recovering on increased domestic demand fueled by the government’s emergency relief funds.