Dongzan Files IPO Prospectus to Become 'The Most Medically Savvy Brand in Sports' with a Tiered Model of Comprehensive Centers and Community Clinics

As more and more people around him began to suffer from physical injuries, Jia Kan, founder of Dongzan Technology, who was contemplating the company’s strategic direction, suddenly had an epiphany: Could sports rehabilitation present a business opportunity?

Coincidentally, Jia Kan holds two key resources for entering the sports rehabilitation sector: a sports center and a pool of rehabilitation talent. The former can provide early-stage customer acquisition and cash flow support for the sports rehabilitation business, while the latter offers essential talent support.

With resources in hand and market opportunities viewed favorably by various stakeholders, Dongzan Technology, where Jia Kan is based, began strategic adjustments in 2022, transitioning from its original sports center operations to sports rehabilitation services.

Thus,Dongzan Technology operates two sub-brands: Dongzan Sports and Dongzan Rehabilitation., the former addresses the public’s demand for sports facilities and provides cash flow and initial customer traffic support to the latter. It has successfully operated multiple sports centers and accumulated substantial cash reserves; the latter primarily focuses on addressing issues such as rehabilitation from sports injuries, functional impairments, and pain relief.Expansion will be pursued through a model combining Comprehensive Sports Rehabilitation Centers (flagship stores) with standardized product and service offerings (community stores).

Whether extending downward from healthcare or growing upward from sports, each approach has its advantages. However, both inevitably face challenges such as a shortage of talent and the lack of service standardization. In response, what strategies has Dongzan Technology devised?

Dongzan Technology has accumulated nearly 10 years of experience in the sports sector.

Over the past decade, adhering to the vision of making sports spaces accessible to all, Dongzan Technology has built and operated multiple sports centers in Shanghai and Hangzhou, boasting hundreds of thousands of precise vertical users (as disclosed by the company).

In the operation of sports centers, the team has clearly observed a phenomenon: the number of individuals with musculoskeletal injuries is increasing. Some of these cases stem from sports-related injuries, while others occur even among those who rarely exercise, as aging leads to various forms of musculoskeletal damage.

“In fact, we observed two key market characteristics at the time. First, the per capita sports facility area in China is relatively small, less than one-tenth of that in Japan, indicating that the demand for sports spaces among the Chinese population remains largely unmet. Second, alongside rising per capita GDP and growing awareness of exercise and health, the number of people participating in sports in China has been increasing year by year. However, this trend has been accompanied by a growing and increasingly evident incidence of sports-related injuries,” said Jia Kan. Consequently, Dongzan Technology has established its strategic goal as “enabling everyone to enjoy convenient access to sports facilities and obtain scientific rehabilitation services.” Dongzan Sports and Dongzan Rehabilitation align their respective business operations with these objectives.

Dongzan Technology’s market insights are indeed reflected in the relevant data. According to projections by the General Administration of Sport of China, the number of people who regularly participate in physical exercise will exceed 630 million by 2035. Given that the incidence rate of sports injuries among this population ranges from 10% to 20%, it is estimated that approximately 100 million individuals will require sports rehabilitation in the future.

It is important to highlight that the aforementioned data pertains solely to the athletic population. While exercise-based rehabilitation is indeed the optimal approach for recovering from sports injuries, its applicability extends to postoperative patients, individuals with functional impairments, those suffering from chronic pain, as well as office workers and middle-aged or elderly individuals experiencing various types of musculoskeletal strain.The market potential for sports rehabilitation is significant, even being hailed as the “next frontier in medical aesthetics and dentistry.”

However, this highly anticipated sector is still in its early stages of development; consequently, the companies that have flocked to enter the market are still in the phase of validating their business models.This means that not only do sports rehabilitation service providers have diverse origins—ranging from those incubated by orthopedic sports medicine teams and professional athletic training squads, to teams like Dongzan that integrate resources from both the sports and medical sectors, and even including practitioners of Traditional Chinese Medicine—but their development models also vary significantly.

But in reality, regardless of the development model, any organization seeking to achieve scale breakthroughs must inevitably address two long-standing challenges: service standardization and talent pipeline development.

Service standardization goes without saying; it is almost a “common ailment” encountered by all consumer healthcare sectors (specifically service providers, mostly in the midstream of the industry chain) when expanding their scale. As for talent reserves, VCBeat has previously published a dedicated article discussing the shortage of high-quality professionals in sports rehabilitation, highlighting the dilemma that even a high salary of 600,000 yuan fails to attract candidates.

Therefore, service standardization and talent reserves are the lifeblood of sports rehabilitation service enterprises. Professional expertise and services are equally critical.

So, what is Dongzan's solution?

Tiered development is Dongzan’s solution.

Jia Kan introduced to VCBeat that,In the field of sports rehabilitation, Dongzan has adopted a tiered development model comprising comprehensive sports rehabilitation centers and community stores offering standardized service products.

Among them, the Integrated Sports Rehabilitation Center primarily addresses users’ personalized sports rehabilitation needs, while standardized service products offered at community stores mainly tackle common issues such as routine sports injuries, functional impairments, and chronic pain.

Thus, community stores can serve as one of the customer acquisition channels for comprehensive sports rehabilitation centers, while these centers can provide standardized product offerings and training to the community stores.

ButThe core issue that tiered development aims to address is not customer acquisition, but rather service standardization and talent reserve.Services delivered by humans are difficult to fully standardize. Therefore,For technologies capable of standardized service delivery, Dongzan has established a platform for converting sports rehabilitation into standardized products, delivering standardized sports rehabilitation solutions targeted at specific types of injuries or pain.

“In fact, it is possible to standardize the development of sports rehabilitation solutions for the same category of injuries or trauma,” stated Jia Kan. Dongzan first segmented scenarios involving common injuries and pain, and then, leveraging its accumulated resource channels and considering the market landscape for the rehabilitation product, screened out solutions that offer both promising market prospects and practical feasibility for implementation.

Based on the aforementioned screening criteria,The Stretching Rehabilitation Community Store has become Dongzan’s first technology-transfer product, focusing on addressing common functional impairments, pain relief, and post-exercise recovery. In collaboration with industry experts, Dongzan has refined stretching services to an unprecedented level of granularity and introduced the concept of therapeutic stretching, which serves as the core philosophy of the Stretching Rehabilitation Community Store.

In the interview, Jia Kan also explained the specific reasons to VCBeat. On one hand, Dongzan found that in common cases of exercise-related and musculoskeletal injuries, functional impairment and pain relief are the most prevalent issues. Minor functional impairments and musculoskeletal pain are usually caused by muscle tone imbalance (which can be triggered by lack of exercise, improper exercise techniques, or excessive exercise). Typically, such symptoms can be alleviated through standardized therapeutic stretching, eliminating the need for treatment at comprehensive sports rehabilitation centers or hospitals.

On the other hand, stretching services currently available on the market are predominantly sports-oriented, primarily aimed at post-exercise muscle recovery and relaxation. In contrast, therapeutic stretching products address a broader range of indications and require professional medical team guidance regarding dosage, treatment cycles, and positioning. Therefore, therapeutic stretching (stretching rehabilitation), which focuses on resolving mobility impairments, pain relief, and post-exercise recovery, has become the primary focus for Dongzan’s technology commercialization.

Currently, Dongzan has partnered with Shanghai University of Sport to jointly establish standards for therapeutic stretching rehabilitation services and conduct related training. The product is scheduled for its official market launch in the second half of this year.

Standardizable components are standardized as much as possible through the delivery of standardized products and training systems, while thoseWhat about solutions for personalized rehabilitation issues that are theoretically impossible to standardize?

Dongzan’s answer is—don’t standardize. Instead, hire a high-quality rehabilitation team.

This inevitably brings us to the rehabilitation physicians and therapist resources in Dongzan.According to Jia Kan, Dongzan’s rehabilitation team consists of physical therapists from national and professional teams, as well as rehabilitation physicians and orthopedic surgeons from tertiary hospitals.“Addressing personalized rehabilitation challenges largely depends on the professional expertise of rehabilitation therapists. By aggregating top-tier expert resources, we can fulfill the function of meeting personalized rehabilitation needs, thereby eliminating the need to force standardization.”

Furthermore,The Integrated Sports Rehabilitation Center is tasked with addressing personalized rehabilitation needs, incubating standardized products, and establishing regional authority.Therefore, in terms of foot traffic, the size of this population is relatively small after preliminary “screening” by community stores. Moreover, the practical effectiveness of other functions is not directly correlated with quantity but is closely tied to service quality.Therefore, the requirement for talent at integrated sports rehabilitation centers is not quantity but quality. As a result, the current pool of rehabilitation physicians and therapists accumulated by Dongzan is sufficient to meet the needs of its existing number of clinics.

As for community stores, since their main promoted products are standardized, the requirements for the professional level of therapists or physicians are relatively low. Establishing a comprehensive training system can effectively address this issue. Furthermore, Dongzan Technology’s collaboration with Shanghai University of Sport serves, to some extent, to safeguard the quality of these standardized products and support the associated training programs.

In fact, Dongzan’s adoption of a tiered development model also stems from insights into market conditions. While the prospects for sports rehabilitation are promising, the industry remains in its early stages due to constraints related to talent shortages and lack of standardization. Under these circumstances, standardized products and services have gradually emerged in the market, indicating opportunities in lower-tier markets. Meanwhile, although achieving continuous technological breakthroughs in the mid-to-high-end sports rehabilitation market is challenging, it creates high barriers to entry; those who can endure the long haul will secure their market share. Therefore, Dongzan’s comprehensive sports rehabilitation centers and community-based clinics operate in a complementary manner, with clear division of labor.

With a clear development model in mind, Dongzan’s formulated development plan is naturally unambiguous.According to Jia Kan, Dongzan has formulated a three-step development plan: Step one is to vigorously develop “3-kilometer” sports spaces in target cities, generating cash flow through operations and events, building a user base, and expanding influence; step two is to construct comprehensive sports rehabilitation centers (standardized product incubation platforms) in key cities and create standardized products for niche markets; step three is to leverage the cash flow and user base from the sports spaces to rapidly extend stretching and rehabilitation services into communities.

Furthermore, Jia Kan revealed that Dongzan has always upheld a collaborative and open entrepreneurial attitude. It not only established a strategic partnership with Jianhai Technology, an internet-plus post-diagnosis disease management center serving over 1,000 hospital clients, by jointly funding the construction of benchmark sports rehabilitation centers and comprehensive sports centers (Urban Healthy Lifestyle Centers), but will also embark on a new round of nationwide expansion in collaboration with real estate companies that share its strategic vision. The entire Dongzan brand is seeking further development through a combination of self-operated and franchise models.