YouTang Health Files IPO Prospectus: Building a Deeply Focused Diabetes Management Service Model Across 20+ Cities in China

Diabetes health management was once a booming sector, with such intense competition that the period was even dubbed the “Hundred Diabetes Wars.” However, after the fervor subsided, the laggards were ultimately weeded out. Today, industry order is gradually being established, and chronic disease management has entered an era of rational, in-depth development.

In the field of diabetes management, U-Tang Health has stood out since its inception. While many companies were fiercely competing in the realm of digital diabetes management, U-Tang focused on offline diabetes care. Since its establishment in 2015, U-Tang Health has operated 10 directly managed health management centers and one specialized diabetes clinic, with over 40 affiliated health centers covering more than 20 cities across China, serving a cumulative total of over 20,000 members.

U-Tang Health Headquarters

As a relatively “traditional” comprehensive diabetes management platform, what has enabled YouTang Health to achieve its current success? What has its business layout looked like over the years? VCBeat provides an analysis.

In fact, within the broader field of chronic disease management, conditions such as hypertension and rheumatoid arthritis—aside from diabetes—are also key areas of focus for healthcare startups. YouTang’s decision to enter the market with a focus on diabetes management at its inception was driven by three main reasons.

First, there is a large population of patients with diabetes. According to statistics from the International Diabetes Federation (IDF), China has approximately 116 million people with diabetes, ranking among the highest in the world. Both entrepreneurs and investors consider the size of the user base as a key factor in deciding whether to enter the market.

The vast patient population translates into substantial medical expenditure. Currently, diabetes-related healthcare spending in China has exceeded $100 billion, and this figure is projected to grow rapidly over the next 10–20 years.

Secondly, compared with chronic diseases such as hypertension and rheumatoid arthritis, the short-term effects of diabetes management are more significant.

Thirdly, the progression of diabetes is often accompanied by various complications. Metabolic disorders caused by diabetes can affect most tissues and organs in the human body, ranging from the autonomic nervous system to the skin, and from the kidneys to the retinal arteries. Once these complications occur, they are difficult to reverse with medication alone.

Based on this, U-Tang Health was officially established in Wuhan in 2015, with a focus on diabetes management. Since diabetes management requires lifestyle interventions to complement medical treatments, U-Tang Health established offline health management centers as the primary venues for out-of-hospital care of diabetic patients. The company adopts a membership-based operational model and employs standardized management systems—such as the “three-specialist collaborative care” model and the “five-pillar approach”—to manage blood glucose levels and reduce the incidence of diabetic complications.

In addition to its core service-oriented business, YouTang Health has established a systematic supply chain for health products, which not only meets the diverse needs of people with diabetes for a high-quality lifestyle but also serves as a complement to its service offerings.

In theory, as long as scientific health management practices are followed, the blood glucose levels of diabetic patients can be kept within a controllable range; however, in actual practice, patient adherence largely determines the effectiveness of the implementation of health management plans.

Due to the nature of chronic diseases, patients with diabetes do not have an urgent need for health management, which also leads to poor adherence among diabetic patients.

To address this issue, U-Tang Health spearheaded the introduction of Germany’s STEP Structured Diabetes Management Model and established a comprehensive, standardized membership management service system. This system enables a clear understanding of members’ physiological and psychological conditions. For instance, based on each member’s health management status, U-Tang Health arranges for health managers to conduct irregular home visits, organize patients’ medication kits, and perform other related tasks. These activities allow health managers to gain specific insights into problems encountered in patients’ health management while eliminating factors that may hinder the implementation of health management plans. After each home visit, U-Tang Health documents and archives all relevant information.

During member management, U-Tang Health also develops highly detailed plans for members at every stage, even down to daily health management schedules, to help members establish adherence.

These are just a few examples from the daily operations of U-Tang Health, but it is precisely this meticulous management that truly addresses the psychological needs of patients with diabetes, thereby helping to foster treatment adherence among them.

In addition to patient adherence, management efficiency is also key to transforming diabetes health management into a viable commercial venture. By standardizing diabetes management methodologies and quality control measures, YouTang Health has developed a comprehensive set of operational standard operating procedure (SOP) manuals. This not only enables a single health manager to oversee multiple members simultaneously but also facilitates the scalability and replication of the business model.

Thanks to improved operational efficiency, YouTang Health has reduced its operating costs. Moreover, its current customer acquisition strategy relies primarily on in-house promotional efforts, ensuring controllable costs. As a result, the health management services offered by YouTang Health are priced affordably.

Typically, all medical interventions involving patients with diabetes are referred to as in-hospital activities. At its inception, YouTang Health did not engage in any medical practices related to diabetes management; instead, it focused solely on lifestyle interventions. Health managers, nutritionists, and exercise specialists collaborated to provide members with personalized health management plans.

In 2020, with the continuous expansion of its business, U-Tang Health established a specialized diabetes outpatient clinic featuring “integrated traditional Chinese and Western medicine for the prevention and treatment of diabetes” on the basis of its existing health management center. The clinic provides specialized diagnosis and treatment services for diabetes and its complications, and seamlessly integrates with U-Tang’s standardized out-of-hospital health management services, offering professional comprehensive prevention and control solutions for patients with diabetes. Since then, U-Tang Health has formally established a diabetes management system that combines “in-hospital and out-of-hospital” care.

In response to market developments and the needs of individuals with diabetes, YouTang Health has deployed its core resources since the beginning of this year to drive the construction of a “digital transformation” system, gradually extending its services from offline to online channels. Specifically, YouTang Health’s “digital transformation” development strategy can be reflected across three levels:

In terms of customer acquisition channels, U-Tang Health has begun to explore more online promotional channels and establish its own private traffic pool. By tagging members and categorizing them precisely, the company gradually converts them through community-based services.

In terms of customer service methods, U-Tang Health has developed intelligent tools such as the U-Tang Doctor App and mini-programs, as well as health monitoring software and smart nutrition software. These platforms enable the company to provide members with online health management services, including nutritional counseling, fitness coaching, daily monitoring, and interactive sharing.

In terms of system development, YouTang Health has established a data middle platform department and initially built a relatively comprehensive internet big data SaaS platform, including the management terminal for health managers and the client terminal, which can achieve significant improvements in diabetes management and company operational efficiency.

From offline and out-of-hospital settings to online and in-hospital services, YouTang Health’s original mission has remained unchanged: centered on protecting pancreatic islet function in patients with diabetes, strictly adhering to diabetes health management standards for product selection, and providing personalized health management solutions to help patients achieve stable blood glucose control.

After years of operational accumulation, YouTang Health has established a refined standardized system encompassing operations, services, and software, and has built a strong reputation in Wuhan. In recent years, the growing number of patients with diabetes has made it clear that the health management centers in Wuhan alone cannot meet the increasing demand. Against this backdrop, YouTang Health officially opened its franchise opportunities to external partners in 2020; prior to this, the company had primarily operated its brand through direct ownership.

To ensure the quality of its franchise operations, YouTang Health’s headquarters has established three major operational support systems: business support, organizational management, and headquarters resources. These comprehensive support mechanisms are designed to enhance the operational efficiency of affiliated health centers. Whether company-owned or franchised, all YouTang Health facilities must strictly adhere to the standardized operational process manuals. It is precisely this commitment to standardization and high standards that has enabled YouTang Health to build a strong reputation among patients with diabetes.

“Looking inward for management, outward for reputation” is the effective path that U-Tang Health has explored in its brand development process. To strengthen patient trust, U-Tang Health avoids over-exploiting members or engaging in additional sales promotions while serving diabetic patients. For health management companies, generating substantial short-term profits through the sale of health supplements and conference-based marketing may seem attractive, but such practices are detrimental to long-term brand development. U-Tang Health has achieved its current scale in a competitive market precisely because of its unwavering commitment to these principles.

At present, U-Tang Health is in a phase of rapid development, and it has even greater ambitions for the future.

First, optimize existing products and services. It is reported that YouTang Health plans to establish the YouTang Health Technology and Product Development Research Institute this year, focusing on product research and optimization, with the aim of providing more high-quality, high-tech products for diabetic patients.

Second, establish a talent training system to address the issue of talent reserves. As YouTang has begun its expansion across China, the demand for high-caliber professionals is continuously increasing. Therefore, YouTang Health will cultivate and supply talent by establishing the YouTang Health Management Academy, thereby meeting the company’s development needs.

Third, acquire more effective customer data, build a middle-platform data center, establish a big data operations system, and empower enterprises to operate efficiently.

In addition, YouTang Health is also expanding its services into the wellness and care sector by establishing dedicated wellness bases for diabetic patients, thereby providing more comprehensive support to individuals with diabetes.

In terms of market expansion, U-Tang Health has laid out a more definitive strategy. Over the next three years, the company plans to establish 200 chain health management centers and multiple diabetes specialty clinics, with an initial public offering (IPO) slated for an appropriate time. U-Tang Health also maintains an open stance toward capital investment, seeking partnerships with investors who can offer complementary resources. By pooling these resources, the company aims to benefit a broader population of patients with diabetes.