Qiancao Traditional Chinese Medicine Files for IPO: 20 Years of Expertise in Herbal Slices, $700M Annual Revenue, Global Reach
TCM decoction pieces are the earliest form of medication in the traditional Chinese medicine (TCM) system and have been used continuously to this day; they represent the crystallization of wisdom and a vital carrier of TCM’s traditional culture.
Traditional Chinese Medicine (TCM) decoction pieces refer to processed products derived from “TCM crude drugs” through specific processing and preparation techniques, guided by TCM theories and tailored to the requirements of syndrome differentiation-based treatment, dispensing, and formulation. These pieces have defined shapes and specifications and can be directly administered as medicinal agents or further processed into proprietary Chinese medicines.TCM decoction pieces are the essence of traditional Chinese medicine in China. The dialectical treatment and symptom-based medication in TCM clinical practice are achieved through TCM decoction pieces.
BEI JING QIAN CAO Traditional Chinese Medicine CO,LTD., established in 2003, is a large-scale modern enterprise integrating the production, processing, and sales of traditional Chinese medicine decoction pieces., it was the first in its industry to obtain national-level GMP certification for Traditional Chinese Medicine (TCM) decoction pieces (including those for direct consumption and toxic TCM decoction pieces).
As demand for health products and traditional Chinese medicine (TCM) continues to grow, the TCM decoction pieces industry is also experiencing rapid development.According to data from the National Bureau of Statistics, the traditional Chinese medicine (TCM) decoction pieces industry has maintained a high growth rate of approximately 20% for an extended period, consistently ranking first in growth speed among all sub-sectors of the pharmaceutical industry.。
From 2010 to 2016, the compound annual growth rate (CAGR) of sales revenue for Chinese herbal medicine slice enterprises above designated size in China reached 21.26%. From January to September 2017, the total sales revenue of Chinese herbal medicine slices amounted to RMB 159.2 billion, representing a year-on-year increase of 17.20%.
China’s traditional Chinese medicine (TCM) decoction pieces industry has maintained an average annual sales revenue growth rate of approximately 15%, with the market size reaching RMB 337.5 billion in 2021. By 2022, the sales scale of China’s TCM decoction pieces industry is projected to exceed RMB 380 billion.
Over the past decade, China has repeatedly introduced policies to support and guide the development of its traditional Chinese medicine (TCM) industry. As one of the three pillars of China’s TCM sector, TCM decoction pieces have long been subject to the policy “prohibiting foreign investment in the processing of traditional TCM decoction pieces,” and in recent years, they have received particular state favor.
On December 27, 2016, the State Council issued the "Notice on Printing and Distributing the Plan for Deepening the Reform of the Medical and Health Care System during the 13th Five-Year Plan Period," which came into effect on the same day. The Notice includes two major policies favorable to the traditional Chinese medicine (TCM) decoction pieces industry:First, abolish drug markups (excluding traditional Chinese medicine decoction pieces) and establish a scientific and reasonable compensation mechanism by adjusting medical service prices, increasing government investment, reforming payment methods, and reducing hospital operational costs.
Second, strive to reduce the drug proportion (excluding traditional Chinese medicine decoction pieces) in public hospitals in pilot cities to approximately 30% by 2017, and lower the consumption of medical materials per RMB 100 of medical revenue (excluding drug revenue) to below RMB 20.
The release of this policy has significantly promoted the substitution effect of traditional Chinese medicine decoction pieces for Western medicines.
Driven by strong policy support, the gradual refinement of national processing standards, the continuous implementation of Good Manufacturing Practice (GMP) regulations, and the progressive adoption of decoction piece packaging management, the Traditional Chinese Medicine (TCM) decoction pieces industry has become increasingly standardized. With a steadily improving market environment, rising industry concentration, and advancing technological capabilities, the sector maintains a robust growth trajectory.
Since its inception, Qian Cao has gradually established standardized processes for R&D, material selection, and processing from the ground up. From securing raw material bases to setting up laboratories, and from traditional visual identification to high-tech instrumental testing, Qian Cao’s TCM practices have evolved incrementally in tandem with industry developments.
Mr. Yang Wencai, the founder of BEI JING QIAN CAO Traditional Chinese Medicine CO,LTD, has been engaged in the cultivation and processing of medicinal herbs since 1981.To date, Qiancao Traditional Chinese Medicine has grown into a modern TCM decoction piece enterprise integrating production, processing, and sales, with over 400 employees, covering an area of 65 mu, and achieving annual sales of RMB 500 million.
Its processed and refined TCM decoction pieces, ready-to-consume decoction pieces, and small-packaged decoction pieces—comprising over 1,000 varieties—are exported to more than a dozen countries and regions, including the United Kingdom, Australia, Singapore, Canada, Dubai, and Brunei, as well as to over 70 provinces, municipalities, and autonomous regions across China, such as Beijing, Shanghai, Guangzhou, and Shenzhen.
As is well known, the efficacy of traditional Chinese medicine (TCM) is influenced by various factors, including geographical origin and processing methods. How can proprietary Chinese medicines achieve standardized management? With this question in mind, VCBeat interviewed Yang Zhongyi, a participant in the second cohort of the Fosun Star Future Startup Camp and current General Manager of Beijing Qian Cao Traditional Chinese Medicine Co., Ltd.
According to Yang Zhongyi, since its inception, Qiancao Traditional Chinese Medicine has prioritized industry-academia-research collaboration, establishing strong partnerships with renowned institutions such as Beijing University of Chinese Medicine, Beijing Tongrentang Pharmaceutical Factory, and the Hospital of Tsinghua University. The company also owns Deshoutang Pharmacy, a time-honored brand in China.
Qiancao Traditional Chinese Medicine has innovated modern processing techniques based on traditional methods, and introduced new modern pharmaceutical equipment to improve the production efficiency of TCM decoction pieces through automated and modernized production processes, while effectively enhancing the precision and reliability of the processing technology.
To ensure product quality, and to control the quality of medicinal materials at the source,Qiancao Traditional Chinese Medicine has certified 67 suppliers of Chinese herbal medicine planting bases that meet GAP requirements across multiple provinces in China, including Shandong, Gansu, Inner Mongolia, Sichuan, Henan, Zhejiang, Heilongjiang, and Anhui.，Subsequently, the raw materials must undergo rigorous screening and testing before entering the production workshops of BEI JING QIAN CAO Traditional Chinese Medicine CO,LTD. In addition, BEI JING QIAN CAO Traditional Chinese Medicine CO,LTD has formed an industrial alliance with GAP-certified planting bases for Chinese herbal medicines.
Qiancao Traditional Chinese Medicine has also established a comprehensive production and quality management system in accordance with GMP requirements. Its production environment and processes have been certified and approved by the National Medical Products Administration (NMPA), and all production and testing procedures are strictly conducted in compliance with GMP and SOP standards.
In addition, Qiancao Traditional Chinese Medicine has established a laboratory spanning over 1,000 square meters, equipped with advanced and precise testing instruments—including high-performance liquid chromatography triple quadrupole tandem mass spectrometry (HPLC-QQQ-MS/MS), high-performance gas chromatography triple quadrupole tandem mass spectrometry (GC-QQQ-MS/MS), atomic absorption spectrophotometry, high-performance gas chromatography, and high-performance liquid chromatography—to conduct scientific testing of raw materials and finished products.
Qiancao’s traditional Chinese medicine products are tested in accordance with national standards and Beijing municipal standards. The company has recruited a team of technical professionals, including chief pharmacists, pharmacists-in-charge, and postgraduate researchers, to conduct quality control and research and development, thereby ensuring consistent product quality.
At BEI JING QIAN CAO Traditional Chinese Medicine CO,LTD, all personnel in key production positions within the workshop have undergone training and are certified to work. Some of these employees have also obtained the Certificate for Traditional Chinese Medicine Processing Workers issued by the Beijing Vocational Skills Appraisal Center.
Currently, Qiancao Traditional Chinese Medicine has established a management model featuring “Three Major Platforms” and “Five Modernizations,” comprehensively enhancing product quality.
"Three Major Platforms"First, a laboratory testing platform for herbal material analysis; second, a quality control platform establishing a three-tier quality monitoring network comprising specialized inspections, mutual inspections, self-inspections, and patrol inspections at the company, workshop, and team levels; and third, an expert review platform, engaging Zhou Furong, a national drug evaluation expert, as a technical consultant to provide regular guidance.
“Five-Standardized Management”namely, “base-based sourcing of medicinal materials, scientific testing methods, standardized processing techniques, quality standardization, and standardized measurement and packaging specifications.”
Yang Zhongyi stated in an interview that, going forward, Beijing Qian Cao Traditional Chinese Medicine Co., Ltd. will continue to operate with integrity and dedication, delivering truly valuable products to the industry and its customers.
It is reported that Yang Zhongyi joined the second cohort of the Star Future Entrepreneurship Camp in 2020, upon the recommendation of Liu Xinyue, CEO of Xiaolu TCM, China’s largest internet-based traditional Chinese medicine platform.
Yang Zhongyi stated that his decision to join Fosun Star Future was primarily driven by Fosun’s strategic layout in traditional Chinese medicine (TCM), which includes entities such as Xiao Lu TCM, Tong Han Chun Tang, Wanbang Hanfang, Hongjitang Pharmaceutical, and Foshan Fosun Chancheng Hospital.
Wu Lili, CEO of Fosun·Star Future Research Institute, stated“Star Future Entrepreneurship Camp is one of the most industry-backed startup training programs in China, dedicated to mutual empowerment between participant enterprises and the Fosun ecosystem. We have recommended Qiancao Traditional Chinese Medicine to Fosun Health’s TCM-specialized hospitals, including Foshan Fosun Chancheng Hospital and Wenzhou Geriatric Hospital, and we look forward to receiving positive news in the future.”
[Fosun · Star Future Entrepreneurship Camp]
Fosun Star Future Entrepreneurship Camp is an incubation and investment platform under Fosun’s Star Future Capital, established in reliance on Fosun and Fosun Pharma. Focused on the broader health sector, it adopts a “community + incubation + investment” model to explore cutting-edge innovation, concentrate on entrepreneurial talent, and secure early-stage investments in future unicorns.
In 2021, Fosun Star Future Entrepreneurship Camp launched its third cohort, targeting entrepreneurs in the healthcare sector and aspiring innovators. It invited top-tier global mentors, introduced six core incubation modules, and offered entrepreneurship courses grounded in China’s medical industry background and practical experience.