Juzi Biotech (巨子生物) posts first decline in performance — an ingredient controversy punctures the high-growth myth of recombinant proteins?

Results and the immediate trigger

Juzi Biotech (巨子生物) reported its first full-year revenue and net‑profit decline since listing, with revenue at 5.519 billion yuan (55.19 亿元), down 0.4%, and net profit of 1.915 billion yuan (19.15 亿元), down 7.2%. The drop was concentrated in the second half of 2025: H1 revenue was 3.113 billion yuan (31.13 亿元), up 22.5%, while H2 fell to 2.406 billion yuan (24.06 亿元), down 19.8% year‑on‑year. The company’s performance slump followed a high‑profile ingredient dispute: it has been reported that a beauty influencer alleged the flagship collagen stick contained far less recombinant collagen than advertised, a claim that Huaxi Bloomage (华熙生物) reportedly publicly supported, and which Juzi later acknowledged exposed limits in its quality standards and testing methods.

From online outrage to lost traffic and sales

The timing of the controversy coincided with China’s key e‑commerce promotional periods and, according to sell‑side notes and third‑party platform data, materially dented Juzi’s online traction. CMB International estimated Juzi’s flagship brand saw overall GMV down roughly 30% during 2025 “Double Eleven” online promotions, with a c.20% decline on Tmall and steeper falls on Douyin; Douyin partnership counts and head‑streamer collaborations also fell markedly after May. Why did consumer doubts move the needle so quickly? Because Juzi’s business model is heavily concentrated in direct‑to‑consumer online channels and influencer‑led campaigns — a structure that amplifies reputational shocks.

Structural fragilities exposed

The controversy did not create Juzi’s problems so much as expose them. In 2025 the company relied on two brands for 97.6% of sales: the mass‑market line contributed 81.0% and a premium sister brand 16.6%. Online direct sales (Tmall, Douyin DTC plus platform self‑operation) accounted for roughly 74.6% of revenue, leaving offline stores — 32 by year‑end — unable to offset e‑commerce volatility. Juzi has been spending aggressively to buy growth: sales and marketing expense ratio hit 37.3% in 2025 after cumulative increases from 2021, while R&D investment languished at about a 1.6% expense rate. Put bluntly: heavy marketing, light R&D — and almost all the eggs in one basket.

Outlook: medical device approvals and a long road back

Management says the company aims to “return to growth” in 2026 and is pushing into medical‑device injectables after approvals late last year and early this year — moves that could diversify revenue but require very different B2B sales, regulatory and clinical support capabilities. Competition is intensifying: Bloomage (华熙生物), Aimeike (爱美客) and new entrants such as Meiliu Biotech (美琉生物) are compressing prices and piling into recombinant‑collagen claims. Can stronger compliance, broader channels and real R&D investment restore trust? For Western readers watching China’s fast‑moving beauty‑tech space, Juzi’s case is a cautionary tale: in an era of higher regulatory and influencer scrutiny, brand credibility and technical depth matter as much as marketing muscle.