Qinyuanchun Traditional Chinese Medicine Group Files IPO Prospectus After Achieving Over RMB 100 Million Annual Revenue Through 12-Year Digital Transformation Journey

The wave of digitalization is rapidly sweeping across the globe. Amidst this tide, industries across the board are seeking answers for transformation and upgrading, striving to achieve a “perfect pivot.” Traditional Chinese Medicine (TCM), the ancient therapy once hailed as the “Art of Qi and Huang,” is no exception.

On December 4, 2017, the National Administration of Traditional Chinese Medicine issued the “Guiding Opinions on Promoting the Integrated Development of Traditional Chinese Medicine Health Services and the Internet”, outlines the development path of China's "Internet + Traditional Chinese Medicine (TCM)" by deepening the integration of TCM medical services with the Internet and developing online TCM wellness and healthcare services, thereby providing guiding principles for digital TCM.

Leveraging this momentum, an increasing number of innovative enterprises have entered the traditional Chinese medicine (TCM) sector, embarking on their own explorations and successively delivering their solutions.Qin Yuanchun Traditional Chinese Medicine Group (hereinafter referred to as “Qin Yuanchun”) is one such enterprise, operating through a digital chain of community-based TCM clinics and supported by the Qin Yuanchun TCM Research Institute along with four core centers dedicated to medical services, marketing, data, and e-commerce.

As stated in VCBeat’s year-end review, “the ‘online platform + offline clinic’ business model has gained recognition from certain enterprises and holds considerable development potential.”QIN YUANCHUN TRADITIONAL CHINESE MEDICINE GROUP has also demonstrated unique characteristics in its development. The company has currently established 33 clinics, with comprehensive operations rolled out in Shanghai, Nanjing, Wuhan, Jiangyin, Wenzhou, and other cities. Its product distribution network is linked to over 5,000 clients, generating 100,000 records of inbound and outbound shipments.

Feng Juan, the founder of QIN YUANCHUN TRADITIONAL CHIMESE MEDICINE GROUP, is an ordinary entrepreneur, yet she has become the focal point of extraordinary discussions.

In 2009, fresh out of university, Feng Juan embarked on a part-time entrepreneurial venture with her husband, Xu Hui, and more than twenty junior fellow students, operating a traditional Chinese medicine clinic.Despite the twists and turns, this experience hasLaid the preliminary foundation for the Group’s standardization, operational model, and future development path.After solidifying its foundation, QIN YUANCHUN TRADITIONAL CHINESE MEDICINE GROUP set aside its entrepreneurial accolades and, with an eye toward future development, underwent two relocations—first to Shanghai and then to Nanjing—ultimately launching its second venture in Nanjing.

Speaking of this experience, Feng Juan said:“The hardships and challenges of the entrepreneurial journey are akin to mountain climbing: though the sun may be obscured from view along the way, the desire to ascend drives one forward without hesitation. It is this continuous progress that fills the heart with joy.”

Ultimately, QIN YUANCHUN TRADITIONAL CHINESE MEDICINE GROUP built its core competitive advantages over a twelve-year period. By establishing 33 clinics and constructing a production base for mugwort-based products, while simultaneously undergoing digital transformation, the company maintained robust cash flow and achieved annual revenues in the hundreds of millions during its later operational stages.

Specifically, from 2015 to 2020, QIN YUANCHUN TRADITIONAL CHINESE MEDICINE GROUP relied primarily on its product portfolio as its main revenue source. From 2018 to 2021, its physical stores constituted the primary revenue segment. Between 2021 and the following three years, the company will expand its online operations, fully leveraging data value to double online revenue and achieve a dual-engine revenue model driven by both online and offline channels.

The commercial success of QIN YUANCHUN TRADITIONAL CHIMESE MEDICINE GROUP can be attributed to three factors:

First, its positioning is segmented.Unlike most TCM clinics that offer comprehensive disease coverage, QIN YUANCHUN TRADITIONAL CHINESE MEDICINE GROUP has opted for a “lighter” diagnosis and treatment model. It focuses on external therapies as its primary treatment modality and targets common conditions such as cervical spondylosis, colds with cough, indigestion, and insomnia.

Secondly, following its "light" approach, QIN YUANCHUN TRADITIONAL CHIMESE MEDICINE GROUP promotes and develops external therapies as its distinctive feature.While most TCM clinics primarily rely on herbal decoctions and膏方 (medicated pastes) as their main treatment modalities, QIN YUANCHUN TRADITIONAL CHINESE MEDICINE GROUP remains committed to using relatively simple and practical external therapies—such as tuina (therapeutic massage), acupuncture, gua sha (scraping therapy), and moxibustion—to treat common diseases and prevent subclinical conditions.

Finally, there is innovation.Qin Yuanchun optimizes and adjusts its business operations annually in response to market demands. For instance, the pediatric massage sector was not part of Qin Yuanchun’s initial strategic layout; however, as demand in this area became prominent, the company rapidly established and developed relevant capabilities within this segment.

In summary, the success of QIN YUANCHUN TRADITIONAL CHIMESE MEDICINE GROUP is attributed to its “light” concept.Due to its “asset-light” nature, companies can transform TCM clinics into standardized products and rapidly expand their operations. Meanwhile, standardized treatment pathways are established within this standardized framework. Feng Juan commented on this: “Doctors may be skilled in clinical practice but not necessarily in writing; they may be adept at writing but not necessarily at training. The true barrier to entry is not any single technique, but rather the process of standardizing and systematically implementing the required technologies. We have effectively integrated and streamlined the interactions among doctors, patients, and management, enabling the business model to be rapidly replicated.”

Qin Yuanchun has now overcome the key challenges in clinic implementation, reducing clinic construction costs to a highly manageable range.Its outpatient clinic area has been reduced from the previous 300 square meters to 150–200 square meters. Staffing has been cut from the original 10 employees to the current 5–6, thereby reducing implementation difficulty and costs across multiple dimensions.

Despite its sufficiently “light” business model positioning, QIN YUANCHUN TRADITIONAL CHINESE MEDICINE GROUP has still established its own ecological closed loop.

Given the high consumption of moxa products at the group’s inception and the uneven quality of such products available on the market.To ensure the efficacy of its treatments, QIN YUANCHUN TRADITIONAL CHIMESE MEDICINE GROUP established its own production base for mugwort-based products.The base integrates design, R&D, and production. Leveraging its R&D team and production equipment, and utilizing locally sourced pure wild mugwort, it manufactures mugwort-based products to ensure a long-term supply for outpatient clinics.

Currently, QIN YUANCHUN TRADITIONAL CHIMESE MEDICINE GROUP has obtained the utility model patent certificate for "A Long Moxa Wool Extraction Device" and has developed multiple product lines, including Ai Baobao, Ai Jiaju, Ai Yangsheng, Ai Bangshou, Ai Dingzhi, and Ai Shenghuo. During the pandemic, it donated 600,000 moxa sticks to major hospitals in Hubei Province.

Leveraging its upstream supply chain layout, QIN YUANCHUN TRADITIONAL CHIMESE MEDICINE GROUP has established an e-commerce hub—Ali Light Store—based on moxa product manufacturing, thereby extending its presence to the downstream segment of the industry chain.Promote moxa products through live-streamed explanations by professional physicians on their functions and benefits, thereby increasing corporate revenue.

Its online e-commerce center has integrated online and offline service scenarios.Customers receiving in-clinic treatment can purchase corresponding products by scanning a QR code. After an online purchase, clinic physicians can guide patients on product usage, thereby converting a single transaction into multiple service sessions (such as multi-session packages for comprehensive acupuncture courses or pediatric tuina therapy courses).This enables online purchases with in-store redemption, providing customers with an enhanced user experience and better treatment outcomes. Currently, technical product collaborations have reached over 2,000 partners., will be successively launched on Tmall Light Store over the next three years.

To optimize the layout of midstream TCM clinics, QIN YUANCHUN TRADITIONAL CHINESE MEDICINE GROUP leverages digital empowerment and has established the "Qianmi" system to manage central warehousing., establish an outpatient middle-platform cloud system to enable end-to-end patient intake workflows, comprehensive pharmacy functionalities, store performance tracking, and material inventory management, while providing technical support for financial data analysis and clinical process audits.。

Despite the challenges in establishing norms and standards for Traditional Chinese Medicine, Feng Juan shared her approach to overcoming them.: “Standardization must be underpinned by data to enable data-driven management, thereby simplifying operational processes, enhancing customer experience, and providing service support for physical stores. In its early stages, QIN YUANCHUN TRADITIONAL CHINESE MEDICINE GROUP focused on operations and customer experience. During the mid-term phase, it centered on chain stores, analyzing metrics such as consultation rates for high-prevalence diseases and patient age demographics to align with market demand and optimize revenue. In the later stage, the group leveraged data to deliver intelligent services, minimize manual management, and achieve data interconnectivity along with multi-dimensional integration across medical care, education, production, sales, and research.”

A systematic review reveals that QIN YUANCHUN TRADITIONAL CHINESE MEDICINE GROUP, centered on the nationwide layout of digital chain TCM clinics, has established a moxibustion product manufacturing base, a marketing center (providing product marketing solutions for external TCM therapies), a data center (developing and upgrading software systems to empower various centers), and an e-commerce center (leveraging big data to reach customers for brand promotion and consumer engagement). These components collectively support the construction of a closed-loop corporate ecosystem.

Twelve Years, Three Cities: Feng Juanjuan’s Entrepreneurial Journey May Well Read Like a Page from a Book, Brimming with the Passion of an Idealist.

But passion cannot be separated from insights into the industry, she remarked:“TCM clinics constitute the most foundational tier of the tiered diagnosis and treatment policy; they are the capillaries of China’s healthcare system and represent the critical first step in advancing tiered care. As a traditional therapy with deep cultural and historical roots, Traditional Chinese Medicine (TCM) is poised to significantly reduce healthcare and insurance expenditures for both the state and the public. Public perception of TCM must undergo a paradigm shift. In the future, TCM clinics will undoubtedly emerge as high-value assets characterized by a ‘small yet exquisite’ scale, innovative business models, robust revenue streams, and sustained appeal to capital markets.”

Indeed, the layout strategy of QIN YUANCHUN TRADITIONAL CHIMESE MEDICINE GROUP reflects the influence of tiered diagnosis and treatment.

In implementing its clinic strategy, QIN YUANCHUN TRADITIONAL CHINESE MEDICINE GROUP has chosen a community-based approach, focusing on addressing health issues at the "first mile" by narrowing disease detection to common conditions. This strategy aims to conserve medical resources and empower primary healthcare. Meanwhile, QIN YUANCHUN has launched a financing plan and aims to establish 100 lightweight TCM clinics in Shanghai within two years, meeting local residents’ demand for basic medical services and preventive TCM care.

With the continuous advancement of the tiered diagnosis and treatment policy, the future of QIN YUANCHUN TRADITIONAL CHIMESE MEDICINE GROUP is promising.