Cao Xueli of Shangyi Renjia: The Era Has Given TCM Its Greatest Opportunity, and We Have Built an Ideal Ecosystem
Fifteen years is no short span for Cao Xueli, a practitioner in the traditional Chinese medicine (TCM) industry. Yet, against the backdrop of TCM’s millennia-long history, it is but a fleeting moment. This brief “instant,” however, has given rise to a milestone in the development of TCM. Over these 15 years, the TCM industry has undergone transformative innovation, with the layered integration of new technologies and the internet unlocking countless new possibilities. Spatial barriers have been broken, scenarios transformed, habits reshaped, and the industry upgraded.
Cao Xueli immersed herself in the process of innovating traditional herbal decoctions into portable, no-boil instant granules, delved deep into market expansion, and founded the internet-based TCM brand Shangyi Renjia four years ago.
Innovating traditional herbal decoctions has been an arduous journey, marked by countless failures and skepticism, as well as the deep-seated resistance of senior experts to change their mindsets and usage habits. Cao Xueli’s perseverance stemmed from her conviction that, much like every groundbreaking technology in history that has benefited humanity, innovators can keenly perceive that “technology will inevitably change the world.” The successful promotion of full-component extracted formula granules has fundamentally transformed the way traditional Chinese medicine (TCM) is consumed—offering efficacy equivalent to traditionally decocted herbs, with the convenience of being ready to drink upon reconstitution. What once took an hour now takes just a minute; home-based decoction has given way to anytime, anywhere convenience. Today, an annual market demand worth tens of billions of yuan validates the correctness of Cao Xueli’s choice.
“We Chinese are fortunate to have both traditional Chinese and Western medical systems. The essence of healthcare is to address health issues, while technology and the internet serve to resolve these issues more conveniently and precisely.”
In 2014, the wave of mobile healthcare led by companies such as Chunyu Yisheng and Haodf Online ushered in the inaugural year of mobile healthcare. That year, more than 150 new internet healthcare enterprises were established, with mergers and acquisitions alone exceeding RMB 10 billion. In 2016, numerous industry leaders, technical teams, and internet elites flocked to the “Internet + Healthcare” sector, injecting it with immense vitality. Driven by supportive policies and capital investment, internet healthcare experienced explosive growth. Cao Xueli also embarked on her second entrepreneurial venture, launching “Shangyi Renjia,” an internet-based traditional Chinese medicine (TCM) brand, with the support of the listed company Hongri Pharmaceutical.
At that time, internet-based healthcare was still in its infancy, with no mature models to draw upon, let alone for traditional Chinese medicine (TCM), which is deeply rooted in numerous offline scenarios. How could the internet be leveraged to reshape TCM service scenarios and reconstruct the TCM industry chain? This was the key question facing Cao Xueli.
“Internet + Traditional Chinese Medicine (TCM)” can adopt various models, such as online consultations, TCM e-commerce, O2O medicine delivery, and internet-based TCM education. Merely selecting any single model amounts to superimposing internet tools onto traditional practices, which fails to achieve innovative integration or enhance efficiency and speed. Meanwhile, TCM heavily relies on the quality of medicinal materials, a concern long recognized by the industry. How to leverage new technologies to ensure drug quality is also a critical aspect that cannot be overlooked.
With over a decade of experience in the traditional Chinese medicine (TCM) industry, Cao Xueli has gained a unique perspective—that of a TCM practitioner. She founded Shangyi Renjia to serve users, with TCM practitioners being the key to delivering these services. Prior to the establishment of Shangyi Renjia, Cao Xueli visited more than 100 TCM experts in Beijing.
“What is your view on the practice of conducting online consultations for patients via the Internet?”
“The internet is the trend; it’s quite promising.” “It’s conceivable, but its feasibility requires validation.” “Don’t mess around; that won’t work.” … There were many voices from experts, but what concerned Cao Xueli most was the “opposition,” as addressing such dissent was key to the success of the new model.
Indeed, the vast majority of internet products pertain to daily life, whereas internet healthcare products concern human life itself. The concerns raised by TCM experts are grounded in the essence of medical practice and also serve as the guiding principles for Cao Xueli’s innovative approach to traditional Chinese medicine (TCM) via the internet: striking a balance between innovation and tradition, upholding heritage without being bound by antiquity, and pursuing innovation without deviating from its foundational roots.
Under the innovative model of internet-based traditional Chinese medicine (TCM), “how to ensure drug quality,” “how to meet the demand for face-to-face consultations,” and “how to improve service speed” are essential considerations for Shangyi Renjia in safeguarding the quality of its TCM services.
To this end, Shangyi Renjia leverages the supply chain resources of its parent company, Hongri Pharmaceutical, to ensure the quality of medicinal sources. Through 120 herbal cultivation bases, rigorous selection based on 100,000 fingerprint profiles, and traceability codes, it safeguards drug quality via its proprietary supply chain. Offline, it establishes standards through self-operated clinics and expands the distribution of in-person consultations through partnerships and franchising, thereby meeting the needs of both physicians and patients for face-to-face consultations.
Online platforms hosting TCM practitioners to provide online follow-up consultations and health management services for users are important channels for improving doctor-patient communication efficiency, expanding the service radius of medical clinics, and extending the service chain.
Shangyi Renjia's TCM Decoction Pieces and Full-Component Formula Granules
Shangyi Renjia positions its services around offline initial consultations and online follow-up visits. This approach reflects respect for the traditional Chinese medicine diagnostic methods of “inspection, auscultation and olfaction, inquiry, and pulse-taking,” and serves as a fundamental prerequisite for ensuring medical quality. It is also highly consistent with the provisions set forth in subsequent documents issued by the National Health Commission, such as the Administrative Measures for Internet Diagnosis and Treatment (Trial).
Soon, Cao Xueli established three proprietary systems: a self-owned supply chain, a chain of self-owned TCM clinics, and a self-owned internet platform. Leveraging the robust technical and academic support of a national-level TCM physician group, she led her team to achieve rapid growth and maintain a leading position in the industry.
After four years of strategic development, Shangyi Renjia has opened 20 self-operated clinics; the number of affiliated and partner clinics has exceeded 100; the online platform has registered more than 50,000 physicians, over 70% of whom are from Grade A tertiary traditional Chinese medicine hospitals, and more than 60% hold the title of associate chief physician or above; the assistant team serving physicians and users has reached 6,000 members. The company’s core business metrics have demonstrated an annual growth rate of approximately 150%.
Behind the numbers lies the validation of patterns; behind the patterns lies the original intent.
“In the past, Traditional Chinese Medicine (TCM) was often perceived as subjective. Technology and the internet have made TCM more objective, allowing us to use modern methods to validate the efficacy of TCM, which has evolved over thousands of years. Why is a particular herb more effective? We rely on objective infrared fingerprint data. We have established a fingerprint spectral library for every medicinal material, eliminating the need to rely on the naked eye of experienced practitioners to distinguish authenticity. Why is a specific doctor more suitable for a particular patient? This is determined through precise recommendations based on intelligent analysis of multi-dimensional medical records,” Cao Xueli stated frankly. She explained that the original intention of Shangyi Renjia is to enable users to find qualified TCM practitioners more quickly, conveniently, and accurately. The goal is not just to facilitate access to medical care, but to ensure high-quality outcomes, which can only be achieved through the precise services of high-quality TCM.
“There is a senior expert in Yunnan who charges 12.5 yuan per consultation. He receives a bonus of 1 yuan from the public hospital for each registration fee and sees 140 patients a day. While this expert spoke with pride about seeing 140 patients daily, I felt deep sympathy for him.” In Cao Xueli’s view, TCM practitioners are currently facing a severe problem: they create value but do not receive corresponding compensation. The training period is long, while financial returns are slow and low. In recent years, the proportion of TCM practitioners has declined annually, and fewer students are applying to study traditional Chinese medicine.
Excellent TCM practitioners have always been a scarce resource, as clinical expertise requires years of accumulation. The traditional “master-apprentice” model has made significant contributions to the training of TCM talent, but its efficiency needs improvement.
How can we ensure more reasonable value returns for TCM practitioners and make the inheritance of Traditional Chinese Medicine more efficient? These are precisely the issues that Shangyi Renjia’s model is addressing.
At Shangyi Renjia, the sole responsibility of TCM practitioners is to “focus exclusively on their most valuable task: syndrome differentiation and prescription.” On the online platform, more than 6,000 assistants support both TCM practitioners and users, with all user management handled through platform functionalities and manual assistance from these assistants.
At Shangyi Renjia’s chain of clinics, a network of over 100 locations has effectively extended access to online specialist resources. The appointment-based model enables rational scheduling of physicians’ time, while in-clinic private doctors provide follow-up services to their assigned patients. This integrated approach combines in-clinic treatment with out-of-hospital management, and offline initial consultations with online follow-up visits, thereby enhancing the speed and efficiency of TCM practitioners’ services.
Meanwhile, both online and offline platforms have become venues for knowledge transmission, with the valuable expertise of renowned specialists being disseminated to primary care physicians through Shangyi Renjia.
Shangyi Renjia TCM Clinic Beijing Flagship Store
“Shangyi Renjia places great emphasis on service quality, which is defined by simultaneously meeting the needs of both physicians and users. Our assistants and private physicians enable doctors to focus exclusively on high-value tasks while ensuring that users receive meticulous, high-quality care,” introduced Cao Xueli. “Taking Shangyi Renjia’s TCM clinics as an example, we have deliberately avoided the traditional elements commonly found in TCM clinics, such as rosewood-colored decor, numbered queuing systems, densely arranged seating, and electronic display screens. Instead, our clinics are designed to be serene and peaceful. Patients experience comfort, tranquility, and warmth the moment they step into a Shangyi Renjia TCM clinic. We aim to create a harmonious integration of humans and nature. The waiting areas incorporate concepts of the four seasons and the 24 Solar Terms, not merely for superficial aesthetic appeal, but as a reflection of the holistic view of human health and the essence of Traditional Chinese Medicine culture.”
Looking back at Cao Xueli’s philosophy, the team, technology, services, and business model are all accelerating the amplification of value and ensuring reasonable returns for TCM practitioners.
“Our vision is ambitious: by leveraging our own success, we aim to help our TCM peers collectively and rationally enhance the value return rate and speed of returns for TCM practitioners, empower traditional Chinese medicine with superior technology and services, increase public recognition of TCM, and encourage more people to study TCM,” added Cao Xueli.
Within Shangyi Renjia’s development trajectory, many current hot topics emerge, such as the service and revenue models of internet healthcare, the professional value of online physicians, innovative directions for traditional Chinese medicine, and asset-light expansion and operational strategies for clinics.
Shangyi Renjia embodies the characteristics of the aforementioned niche sectors, integrating targeted solutions for each into a unique business model. Driven by policy support, consumption upgrades, demographic shifts, and emerging technologies, the traditional Chinese medicine (TCM) industry is poised for significant growth opportunities.
In September 2020, Shangyi Renjia held a press conference to announce its brand integration and upgrade, unveiling the unified name “Shangyi Renjia TCM Clinics” for its 20 affiliated clinics. The company also launched the “Shangyi Franchise 100+” initiative, aiming to comprehensively upgrade and empower 100 TCM clinics within the year through an asset-light expansion model. By 2022, it plans to onboard 100,000 TCM practitioners and more than 1,000 franchised clinics, leveraging scale-driven integrated complexes to propel industry-wide upgrades. Looking ahead, Shangyi Renjia aims to establish a network with one clinic every five kilometers, thereby enhancing the accessibility and mobility of high-quality TCM services.
Cao Xueli believes that while Western medicine excels in surgical procedures, Traditional Chinese Medicine (TCM) integrates into daily life—covering diet, housing, transportation, and other aspects—and specializes in comprehensive, full-lifecycle health management. This includes pre-diagnostic prevention, intra-diagnostic treatment, and post-diagnostic rehabilitation, combining in-hospital and out-of-hospital care. TCM closely aligns with the future vision of the era of big health. Service-chain products delivered by 100,000 TCM practitioners are continuously provided to family-based users across China through more than 1,000 TCM clinics, marking the transition of healthcare toward big health and the integration of TCM into everyday life.
The healthcare system is undergoing a shift from being “disease-centered” to “health-centered,” allowing Traditional Chinese Medicine (TCM), with its expertise in “preventive treatment of disease,” to further leverage its advantages.
In the “Healthy China Action (2019–2030),” traditional Chinese medicine services are integrated into initiatives such as health promotion for the elderly, prevention and control of cardiovascular and cerebrovascular diseases, health promotion for women and children, occupational health protection, and dissemination of health knowledge, thereby impacting the daily lives of diverse population groups.
“The times have presented Traditional Chinese Medicine (TCM) with its best opportunity. We need to build a new ecosystem tailored to the current era, identifying the most suitable solutions for users, TCM practitioners, and the industry as a whole,” Cao Xueli concluded.