Haiyun Health Files IPO Prospectus: Empowering Over 100,000 Pharmacies with 'Cun Jiankang' Platform

Li Yun is a thoughtful and deliberate individual. When he makes a decision, it signifies that he has given it careful consideration. This is reflected not only in his departure from a stable position at a central state-owned enterprise to join the entrepreneurial wave, but also in his decisive trade-offs between legacy and new business lines during the company’s strategic transformation.

In 2013, Li Yun resigned from China Unicom Hubei Branch and founded Haiyun Health, specializing in pharmacy membership management services, despite facing various obstacles such as family opposition and funding shortages. After eight years of development, as of July 2021, Haiyun Health had partnered with over 100,000 pharmacies, accounting for 35% of the total number of chain pharmacies in China.

Haiyun Health is a big data application service provider specializing in the pharmaceutical and healthcare industry, founded in 2013 in Wuhan Optics Valley.

Founder and Chairman Li Yun previously served as an IT expert at China Unicom’s headquarters and as Director of the Corporate Customer Operations Center for Hubei Unicom. His professional engagements led him into the healthcare sector, where he conducted in-depth research and developed a proprietary framework of understanding. Co-founder and Vice President Shen Zhang has experience in healthcare-sector investments, while Co-founder and CTO Yu Jun has many years of experience in pharmaceutical software development.

In the operations of Haiyun Health, Li Yun, Shen Zhang, and Yu Jun serve as complementary forces. In Li Yun’s view, Shen Zhang is a talent adept at capturing market shifts and possessing strong communication skills, while Yu Jun is a technical expert who excels in deep analysis and demonstrates robust execution capabilities. “Shen Zhang is skilled at proposing solutions from the customer’s perspective, showcasing his own expertise and the company’s strengths during the design process; he once secured a partnership with a major pharmaceutical company in just two hours. Yu Jun, on the other hand, prefers to thoroughly master every detail, displaying a tenacious drive that refuses to give up until the objective is achieved.” From the perspectives of Shen Zhang and Yu Jun, Li Yun is an entrepreneur with a powerful system of independent thinking, a philosophy that is reflected in every aspect of Haiyun Health.

In 2012, with the rise of health management services, the three founders, leveraging their deep understanding of the healthcare industry, recognized significant potential in the health monitoring market. After a year of market research, they identified a key entry point: many existing monitoring hardware devices lacked corresponding backend data support services. In 2013, these like-minded individuals established Haiyun Health. The initial team rapidly developed the company’s first-generation product, the “Cun Jiankang CRM System,” which uploaded device monitoring data to a platform where backend physicians provided medication guidance and health care services. “Every data upload is like depositing money into a bank account for your health.” Meanwhile, the company partnered with a Wuhan-based manufacturer of integrated blood glucose, blood oxygen, and blood pressure monitoring devices to offer an integrated software-and-hardware health management solution.

Initially, Haiyun Health partnered with the property management centers of Wuhan Smart Community to provide residents with blood glucose, blood pressure, and blood oxygen monitoring. However, while this model met market demand, it lacked a sustainable revenue model. Consequently, Haiyun Health was compelled to seek alternative pathways to monetization.

“Since we have decided to start a business, we must see it through. There will certainly be difficulties, but there are always more solutions than problems.” Driven by this “unwavering commitment,” the Haiyun Health team embarked on the exploration of a new model.

In the second half of 2013, Haiyun Health saw a turning point. During discussions with a pharmacy, the pharmacy expressed interest in piloting vital signs monitoring services, such as blood glucose testing, for its customers and demonstrated a willingness to pay. After a one-year trial period, the pharmacy experienced a significant improvement in both the volume and quality of its customer base.

In June 2014, the pharmacy raised a new requirement: Could patient monitoring data and pharmacy purchase records be displayed in an integrated manner to assist pharmacy staff in providing services? In 2015, after several rounds of exploration, Haiyun Health finally pinpointed pharmacy customer management as its core business focus. Starting with this single pharmacy, it rapidly expanded its operations across Hubei Province. By the end of 2015, Haiyun Health was serving nearly 1,000 stores.

““Cun Jiankang CRM” system is the flagship product of Haiyun Health,Dedicated to providing retail pharmacies with precise, intelligent lifecycle management for members (patients). By leveraging technologies such as big data and AI, the system enables efficient application across various scenarios—including precise customer profiling, personalized services, targeted marketing, and refined operational management—thereby enhancing operational efficiency and management effectiveness for retail pharmacies. The system primarily comprises a General Pharmacy Member Management System and a DTP (Direct-to-Patient) Pharmacy Patient Management System.

As an innovation-driven enterprise primarily focused on technology development, Haiyun Health has placed significant emphasis on foundational research and development capabilities since its inception. This strategic positioning has also shaped its workforce, which consists largely of young, tech-savvy professionals. Among its team of over 180 employees, nearly half are technical staff.

In terms of technical oversight, Haiyun Health has appointed Dr. Yan Gang, a returned overseas scholar and Professor of Network Neuroscience at Tongji University in Shanghai, as its Chief Scientist, and a former T4-level Senior Technical Director from Tencent as its Technical Advisor. Regarding medical expertise, the company has engaged several experts as Senior Pharmaceutical Advisors, including Professor Luo Shunde, former Professor at Wuhan University and former Director of the Pharmacy Department at Renmin Hospital of Wuhan University; Chen Huating, former Director of the Pharmacy Department at Union Hospital affiliated with Huazhong University of Science and Technology; and Yu Xing, former Director of the Hubei Provincial Center for Adverse Drug Reaction Monitoring and Chief Pharmacist and Director of the Pharmacy Department at Hubei Provincial People’s Hospital. Additionally, Haiyun Health has established an in-house team of professional pharmacists to provide continuous expert guidance for its health services. After five years of refinement, the team has developed nearly 150,000 pieces of professional pharmaceutical care content.

Furthermore, Haiyun Health has jointly established and conducted research on technological projects such as big data AI and intelligent pharmaceutical services with Wuhan University of Science and Technology; it has also collaborated with Hubei University of Chinese Medicine to develop a Traditional Chinese Medicine (TCM) constitution identification system, providing the company with sustained technological momentum for its development.

May 2017 marked a turning point in the development of Haiyun Health. China Drugstore, a traditional print magazine serving the pharmacy industry, entered into a partnership with Haiyun Health, which was soon upgraded to an investment relationship. This partnership provided Haiyun Health with capital and resources, facilitating its successful transition from a regional company based in Wuhan to a national enterprise. In 2019, Haiyun Health announced that it had completed its “Five-Year Plan” ahead of schedule, becoming the industry leader in pharmacy membership management services, with over 100,000 partner stores.

Wuhan was the first city to impose a lockdown during the COVID-19 pandemic, but the impact of the outbreak extended far beyond the 76 days of confinement. For Haiyun Health, its originally robust offline business expansion model faced severe challenges as a result. To survive, Haiyun Health had to respond swiftly and identify new growth drivers.

Haiyun Health began as a SaaS provider, with its traditional revenue model based on charging fixed software service fees to each pharmacy. Affected by the pandemic, physical pharmacies suffered operational setbacks, which also impacted Haiyun Health. Fortunately, the company quickly adapted to remote work arrangements and identified a new path in its business model: partnering with pharmaceutical manufacturers to introduce their marketing and professional resources into pharmacies to boost product sales, earning commissions based on sales volume. In line with this business model, Haiyun Health upgraded its products and developed the “Gonglingtong” system and a full-course disease management system.

Gonglingtong System:A precision sales enablement service platform that integrates resources from pharmaceutical manufacturers and pharmacies. Grounded in pharmaceutical care and driven by health management, the platform employs targeted marketing strategies to merge basic retail product movement theories with patient-specific disease management strategies and needs. By digitally linking pharmaceutical companies with pharmacies, it fosters efficient online-to-offline (O2O) collaboration, comprehensively driving the rational sales of health products and creating a new ecosystem for manufacturer-pharmacy cooperation based on data-driven services.

Full-Course Disease Management System:Data-driven, professionally grounded, and clinically evidence-based, we engage all outreach channels to bridge the connections among healthcare providers, patients, and pharmaceuticals (or health services), thereby establishing a full-process closed loop of patient care and promoting the improvement of population health. Currently, disease-specific management service workflows are being advanced in cities such as Wuhan and Chongqing.

To accelerate the integration of diverse healthcare resources, Haiyun Health has successively established collaborations with more than 20 pharmaceutical companies, Tencent Healthcare, JD Health, iKang Hospital, and Community 580 Internet Hospital, among other medical and health institutions. These partnerships span various domains, continuously refining its strategy for a data-service-based collaborative healthcare platform.

With this, Haiyun Health has completed the closed loop of its product business line, based on the SaaS technology platform and taking the "Cun Jiankang CRM" system as the entry point,By providing integrated membership operation services for retail pharmacies, we achieve precise connections between retail pharmacies and patients; through “Gonglingtong,” we enable efficient linkages between pharmaceutical companies and retail pharmacies, thereby extending the service chain of industrial enterprises; and by implementing a “whole-disease-course, whole-lifecycle health management system,” we connect doctors, pharmacies, and patients, establishing a multi-faceted health service collaboration platform encompassing insurance and health management. This provides efficient and precise big data support to empower the retail sector in serving the broader health industry.

In 2018, Haiyun Health entered a phase of rapid development, with a surge in the number of pharmacy store services and C-end managed members. “To this day, data from over 100,000 pharmacies is uploaded to our backend every night. We need to parse, merge, classify, and perform other operations on this data, resulting in a substantial workload and significant consumption of cloud resources.” To alleviate the technical pressure brought by the growing service volume, Haiyun Health entered the capital market and quickly completed three rounds of financing, bolstering its technical and operational talent pool.

Looking ahead, Haiyun Health aims to become China’s most efficient platform for connecting resources within the pharmaceutical ecosystem. By linking hospitals, insurance providers, health examination centers, and other healthcare resources, it will serve as a bridge between third-party entities and pharmacies, enabling the rapid flow of service resources and ultimately delivering patient-centered, whole-course disease management services.