Suzhou Xiehe Zheng Hui: Domestic Demand Expansion + Technology Empowerment Brings Opportunities to Skincare Industry

How can AI and artificial intelligence empower the skincare industry to improve R&D efficiency?

Wang Shaoshao

This year’s government work report emphasizes "deepening and expanding ‘AI+’ " and “exploring new spaces for domestic demand growth.”

In recent years, as a sector closely related to people’s consumption and combining technological and service attributes, the skincare industry has shifted from a focus on single products to a development stage that emphasizes both technology and services. What new development opportunities does the skincare industry currently face? How should industry companies find new growth spaces amid the waves of technological innovation and consumer upgrades? Recently, Zheng Hui, CEO of Suzhou Xiehe Pharmaceutical, shared insights based on corporate practices regarding R&D innovation and consumer upgrading in an interview.

Reporter: Which policies from this year’s National Two Sessions are you most concerned about? What new opportunities and requirements will these policies bring to the industry?

Zheng Hui: At this year’s Two Sessions, we are particularly focused on the policy guidance to “expand new spaces for domestic demand growth,” which clearly points the way for the efficacy skincare industry—an industry closely related to everyday life.

This provides us with valuable new growth opportunities. Consumer demand is shifting from purchasing single products to seeking comprehensive solutions that include skin health management, giving us the chance to move beyond the past one-time “selling products” model toward providing long-term, professional skin health services, especially in niche areas.

This is not only a market expansion but also a key opportunity for us to transform from “product manufacturers” into “providers of skin health solutions.” Meanwhile, the domestic consumption boom, such as the “Buy Chinese” movement, also offers a broader stage for local brands like ours.

Of course, these opportunities come with higher new requirements. Whether we can keep up with and lead these demand changes is a comprehensive test of our innovation and service capabilities. This demands that we use “new quality productivity” as an engine, leveraging cutting-edge technology to create more professional, safer, and more effective high-quality products. It also requires us to quickly build matching professional service capabilities to truly meet consumers’ deep aspirations for a better life and healthy skin.

Reporter: The government work report also proposes “developing new quality productivity according to local conditions” and “deepening and expanding ‘AI+’.” How do you think the industry should utilize intelligent tools to reshape the entire value chain of R&D, production, and services?

Zheng Hui: Regarding “new quality productivity” and “AI+,” we have gained deep insights through our practice over the past two years and have conducted many explorations.

First, in R&D, we are shifting from the traditional “trial-and-error” model to an “intelligent prediction” model. By using intelligent tools to build a “data + knowledge” R&D framework, integrating clinical dermatology research results and user feedback data, we can significantly improve the efficiency and accuracy of new raw material screening, potential discovery of classic ingredients, and formulation optimization.

Second, in production, we are promoting a regulatory upgrade from “product supervision” to “full-process supervision.” The cosmetics industry has high requirements for quality and safety. By implementing intelligent production systems that monitor and analyze key parameters in real-time, we are transforming product quality assurance from post-inspection to comprehensive process control.

Additionally, in terms of service value, we are exploring an upgrade from “delivering products” to “delivering solutions.” Through data insights and technological means, we aim to provide users with more personalized skin health management advice, shifting from single product sales to a “product + ongoing service” model.

Reporter: The government work report also mentions “deepening the construction of a unified national market” and “fully stimulating the vitality of various market entities.” What are your personal experiences and expectations for further optimizing the business environment?

Zheng Hui: As a company that has been deeply involved in the industry for nearly forty years, we have profound experience with the continuous improvement of the business environment. In recent years, reforms to streamline administration, delegate powers, and improve services have made it easier for enterprises to operate; the steady progress of building a unified national market has also created a better environment for fair competition.

Looking ahead, we have two main expectations:

First, further improve the industry regulatory system—for example, optimize the review processes for new efficacy claims and raw materials, encouraging innovation at the source; at the same time, improve standards for cosmetic efficacy evaluation, giving R&D directions for companies and more solid basis for consumer understanding.

Second, in releasing the potential of service consumption, clearer scenario support and standard guidelines should be introduced. For example, for the new “product + service” model, establishing more explicit norms in service standards, data application, and consumer rights protection will help companies explore new formats with clearer guidance.