FountainVest Partners' Kang Yan Outlines Londe's Growth Strategy: Building on Core Competencies and Empowering Distributors as Strategic Partners
This August, Zhendong Pharmaceutical announced in a filing its plan to sell its wholly-owned subsidiary, Langdi Pharmaceutical, to FountainVest Partners, a leading private equity investment firm in China.
As the manufacturer and distributor of Landi Calcium, a well-known domestic calcium supplement brand, what will be Landi Pharmaceutical’s next strategic development move? This article features an interview with Kang Yan, a partner at FountainVest Partners and the future controlling shareholder of Landi Pharmaceutical. Kang Yan heads FountainVest’s post-investment operations team and brings over 20 years of experience in corporate management and strategic consulting, having previously served as President of Autohome and as a Global Senior Partner at Bain & Company and Roland Berger. The following is an edited transcript of the conversation.
Kang Yan, Partner at FountainVest Partners
Kang YanFang Yuan has consistently focused on investment opportunities in the consumer and healthcare sectors, having previously invested in numerous companies within these fields, including Amer Sports, Pure Fitness, Laobaixing Pharmacy, Aier Eye Hospital, Chaoju Eye Care, Chang’an Hospital, and Antengene. Landi is a high-quality enterprise that integrates the consumer and healthcare sectors.
Currently, the application of dietary nutrition in China is still limited to special scenarios such as hospitals and specific groups such as the elderly and pregnant women. However, with the continuous improvement of consumers' health awareness, the acceleration of the aging process, and the development trend of domestic dietary nutrition benchmarking international standards, dietary nutrition has become a high-quality track with long-term potential. Landi is an outstanding enterprise in this track, possessing strong product capabilities, brand recognition, and channel strength. The slogan "With Love, With Home, With Landi" has gained widespread acceptance. Therefore, the team believes that Landi is a rare brand in the industry with significant scalability, and has actively promoted this investment transaction.
Kang Yan:FountainVest has always been committed to creating value by helping the companies in which we invest continue to grow. We do more than just invest in excellent companies; we work alongside founders and management teams to enhance their operational and managerial capabilities. Unlike simple minority investments that merely provide capital companionship, FountainVest engages in deep collaboration with management in controlling-stake projects, undertaking tasks that are “difficult yet right.” Companies often require the power of capital at turning points, as well as investors’ support to jointly complete managerial transformations. Such transformations may involve transitioning from a family-run business to a modern enterprise, shifting from traditional marketing models to modern marketing approaches, or evolving from localized operations to international expansion. In the Landy transaction, all three types of transformation were present.
Landi’s competitive advantage lies in its ability, as a domestic enterprise, to capture the growth potential of the Chinese market. It has achieved market leadership through comprehensive marketing, distributor, and customer networks, adopting a grounded approach tailored to local conditions. Our primary objective is to preserve Landi’s successful core competencies while driving digital transformation built upon this foundation. As a relatively traditional company, Landi faces the challenge of leveraging the benefits and opportunities presented by China’s digital transformation. Addressing this challenge will be the focus of our joint efforts with FountainVest going forward. Furthermore, regarding internationalization, Landi is currently a 100% domestic enterprise. In the next phase, FountainVest will leverage its global footprint to help Landi evolve from a leading domestic player in dietary nutritional supplements into a more internationally oriented industry leader.
Kang Yan: Digitalization is of paramount importance and can be divided into three specific stages. The first stage involves e-commerce-based sales; while this is a common practice across the industry, Landy can execute it more effectively. The second stage focuses on the deep integration and empowerment of e-commerce channels with traditional channels, with clear division of labor between online and offline operations. In the future, Landy will achieve comprehensive customer reach and provide holistic services through an integrated online-offline business layout. The third stage entails building consumer communities for health knowledge acquisition, offering authoritative, reliable, objective, and valuable guidance and consulting services to consumers.
Kang Yan:Our management philosophy is to build upon Landi’s core competencies by amplifying its strengths, thereby making its competitive advantages even more pronounced. These strengths encompass product capabilities, business models, the team, and the distributor platform. We will proactively collaborate with the company’s existing team to formulate Landi’s future development strategy and achieve mutual growth, while firmly positioning distributors as partners and co-owners in Landi’s future development. Early next year, Landi will launch a new five-year plan and a new core employee stock ownership plan (ESOP), empowering employees to become true owners of the enterprise—a key initiative in our near-term work agenda.
Kang Yan: Landi’s distribution system operates relatively independently from Zhendong’s, a legacy of Landi’s origins as an external acquisition by Zhendong. Looking ahead, Landi will keep all options open for valuable collaborations with distributors. Previously, such partnerships primarily focused on leveraging distributors to expand market reach and drive product sales. In the future, both parties will engage in deeper cooperation, with Landi and its distributors jointly formulating strategies to better cover the market and serve customers, while more effectively adapting to O2O trends and the broader transformation toward a customer-centric organizational framework.
Kang Yan:Landi’s growth drivers stem primarily from three areas. First, the upgrading of its marketing system, achieved by forging close partnerships with distributors to jointly enhance marketing capabilities. Second, the expansion of its product portfolio. Currently, the majority of Landi’s products are calcium-based; however, consumer demand in the dietary nutrition sector extends far beyond this. In the future, Landi will better reach and serve end consumers by launching new products and leveraging its robust marketing system. Third, digitalization, which encompasses both consumer-facing initiatives—such as digital e-commerce, O2O (Online-to-Offline) services, and content marketing platforms—and internal enterprise digitalization, including the digitization of management systems, business analytics systems, and operational systems. There remains significant room for transformation and upgrading in Landi’s digital infrastructure in the future.
Kang Yan: Fang Yuan will work with Landi’s team to build a greater enterprise. “Greatness” is first reflected at the business level, by becoming an undisputed leader in this field in terms of business scale and business model. Second, Landi will help Chinese society, Chinese consumers, and partners in its ecosystem meet their health needs and achieve personal and corporate success. Finally, on the premise of the first two, deliver substantial returns to shareholders. We hope to leverage Landi’s strengths in calcium-based products to expand into broader areas, while significantly enhancing Landi’s interactions and value creation with consumers and distributor partners through digital transformation.