Premium Authentic Chinese Herbs Delivered at Fair Prices: Digitalization Reshapes Traditional Chinese Medicine Supply Chain
Following the release of the "Standard for Commodity Specifications and Grades of Chinese Herbal Medicines" and the introduction of the "Origin Storage Quality Assurance Warehouse" (hereinafter referred to as "Origin Warehouse") model, the Shandong Internet Traditional Chinese Medicine (Herbal Materials) Trading Center officially launched a dedicated section for authentic regional herbs on its website on July 25. The first product under the "Direct Supply from Origin" initiative, Sichuan Ophiopogon japonicus (Chuan Maidong), was listed for trading. On the first day of the section’s launch, all 150 metric tons of Chuan Maidong were snapped up instantly upon listing, demonstrating extremely strong market demand.
On July 25, the Shandong Internet Traditional Chinese Medicine (Herbal Materials) Trading Center launched a dedicated section for authentic medicinal herbs.
It is reported that all traditional Chinese medicinal (TCM) materials listed in the Authentic Medicinal Materials Zone strictly adhere to the “Grading Standards for TCM Material Specifications” established by the Shandong Internet Traditional Chinese Medicine (Materials) Trading Center. The initial listing of 150 metric tons of Chuan Maidong (Ophiopogon japonicus from Sichuan) comprised 50 metric tons of ungraded bulk goods, 50 metric tons of Grade I selected goods, and 50 metric tons of Grade II selected goods, all of which were snapped up within seconds after being listed. The listing party, “Daidai Weiben,” is a leading enterprise from Santai County, Mianyang, Sichuan Province, known as the “Hometown of Ophiopogon in China.” This company is also the first partner to collaborate on a “Origin Warehouse” with the Shandong Internet Traditional Chinese Medicine (Materials) Trading Center.
In accordance with the "Commodity Specification and Grade Standards for Chinese Herbal Medicines" issued by the Shandong Internet Traditional Chinese Medicine (Herbal Materials) Trading Center, Sichuan Ophiopogon japonicus listed on its platform is subject to additional safety requirements for paclobutrazol. Meanwhile, leveraging standardized ecological cultivation management at the "Origin Warehouse" planting bases, the Ophiopogon japonicus produced by Daidaiwei Ben Institute contains rusco-genin (the primary active chemical constituent in Ophiopogon japonicus) at levels exceeding 0.36%, which is more than three times the standard stipulated in the Chinese Pharmacopoeia.
Shandong Internet Traditional Chinese Medicine (Herbal Materials) Trading Center’s Chuan Maidong “Origin Warehouse” Adopts Standardized Ecological Cultivation
According to the head of operations at the Shandong Internet Traditional Chinese Medicine (TCM) Materials Trading Center, over 70% of Chuan Maidong (Ophiopogon japonicus from Sichuan) in China originates from Santai County. By establishing origin warehouses in Santai County, the center has enabled direct supply from production areas and implemented closed-loop quality control, thereby further ensuring premium quality and competitive pricing for Chuan Maidong. It is reported that the Shandong Internet TCM Materials Trading Center is currently working to list more varieties of authentic TCM materials in its dedicated “Authentic Herbs” section, while also negotiating with multiple production regions of authentic herbs to advance the construction of “origin warehouses.”
In recent years, major production areas of authentic Chinese herbal medicines have been actively developing trading markets and experimenting with online “direct sales” to gain greater control over sales channels, reduce intermediaries, and retain more profit. “Even the finest wine fears a deep alley; digital platforms provide a showcase and sales channel for high-quality herbs. In particular, the rigorous quality control system covering the entire process from origin to transaction ensures product quality, giving buyers confidence in their procurement,” said the head of a Chinese herbal medicine production company. He attributed the popularity of the direct-from-origin model for authentic herbs at the Shandong Internet Traditional Chinese Medicine (Herbal Materials) Trading Center to the widespread recognition of its five core systems, exemplified by quality control and traceability.
Shandong Internet Traditional Chinese Medicine (Herbal Materials) Trading Center originated as the supporting platform for the National Inter-Provincial Traditional Chinese Medicine (Herbal Materials) Procurement Alliance. On July 7, 2020, the Shandong Provincial Healthcare Security Administration, in conjunction with the healthcare security administrations of 11 other provinces, autonomous regions, and municipalities, initiated the establishment of China’s first inter-provincial TCM herbal materials procurement alliance. In December 2021, it was upgraded to become the Sanming Procurement Alliance (National) Inter-Provincial Traditional Chinese Medicine (Herbal Materials) Procurement Alliance. Since its operation began, the Shandong Internet TCM (Herbal Materials) Trading Center has successfully built five core systems: “quality control and traceability, quality insurance, volume-based price negotiation, transaction settlement, and quality-assured warehousing.” These efforts have promoted the “quality assurance, grade improvement, and stable supply” of TCM herbal materials. The center has now grown into a key project for Shandong Province’s strategic layout of the TCM industry development and for accelerating the transition from old to new growth drivers.
The Shandong Internet Traditional Chinese Medicine (TCM) Materials Trading Center connects upstream and downstream stakeholders via traceability codes, enabling automated data collection, recording, and monitoring across the entire process—from cultivation and harvesting to processing and decoction piece preparation, as well as from finished product testing to warehousing—thereby achieving “one-code traceability.” The development of its origin warehouse model encompasses an integrated “production, processing, and sales” direct-supply system featuring standardized cultivation, on-site harvesting, on-site processing, on-site warehousing, and shipment from the place of origin. One of the fundamental principles for this development is that origin warehouses must be equipped with a quality control and traceability system.
“By establishing origin warehouses, we have built a full-process quality control and traceability system from the source, ensuring that product origins are verifiable and distribution paths are traceable. Meanwhile, the cross-regional mutual recognition standards for traditional Chinese medicinal materials established by the center have resolved the issue of lacking authority in our enterprise standards,” said Chen Gangfu, Chairman of Sichuan Daidai Weiben Agricultural Technology Co., Ltd. He noted that while online procurement can significantly reduce purchasing costs, it poses the challenge of being unable to conduct on-site inspection and verification of goods. Therefore, cross-regional mutual recognition and relatively detailed quality standards are particularly important.
Shandong Internet Traditional Chinese Medicine (Herb) Trading Center Releases "Quality and Grade Standards for Traditional Chinese Medicinal Materials"
The "Standards for Commodity Specifications and Grades of Chinese Crude Drugs" formulated by the Shandong Internet Traditional Chinese Medicine (Materials) Trading Center are based on the "Pharmacopoeia of the People's Republic of China (2020 Edition)" and reference the group standard "Commodity Specifications and Grades of Chinese Crude Drugs" issued by the China Association of Chinese Medicine. These standards integrate market trading rules and current circulation conditions, and were developed following multiple rounds of deliberation by an expert panel comprising specialists in traditional Chinese medicine (TCM) resource research, TCM pharmacology, pharmaceutical quality inspection, and quality control at TCM decoction piece manufacturing enterprises. Given that the use of paclobutrazol during the cultivation of Chuan Maidong (Ophiopogon japonicus from Sichuan) leads to a reduction in the content of active ingredients, this standard has incorporated safety index requirements for paclobutrazol specifically for Chuan Maidong.
Leveraging the advantages of digital platforms, the Shandong Internet Traditional Chinese Medicine (TCM) Materials Trading Center has further enhanced its quality control and traceability system through a “TCM Material Standards + Origin Warehouse” model, creating a trusted trading platform for high-quality TCM materials at fair prices. Currently, the center’s undertaking of China’s first joint procurement of TCM decoction pieces has entered a critical phase. As its five major systems mature, this initiative will significantly promote the healthy and orderly development of the TCM industry.