How Huanuo Zhisheng Reshapes Diabetes Care and Captures the Hospital Market with Its Digital Management Platform

Digital diabetes management was once a booming sector, with such intense competition that the period was even dubbed the “Hundred Sugar 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 digital diabetes management, SUGRQ has stood out since its inception. While the “Hundred Glucose Wars” intensified, it remained on the sidelines, quietly focusing on R&D. As many competitors faded from the scene, SUGRQ carved out a unique path by targeting the B2B market and achieving break-even.

Liu Hongdou, founder of SUGRQ, stated: “We are a technology company focused on the field of diabetes. Our Ruikongtang Digital Diabetes Management Solution is designed to help medical institutions manage patients with diabetes more effectively and conveniently.”

What Makes SUGRQ Unique? What Considerations Guide Its Decision-Making? What Are the Hallmarks of Its Strategic Layout? To gain an in-depth understanding of SUGRQ’s winning formula, VCBeat conducted its first exclusive in-depth interview.

In 2014, when Porton Pharma Solutions went public, Liu Hongdou, an executive at the company, began to shift his focus toward investing in and incubating new healthcare ventures, with a primary emphasis on the digital health sector.

At this time, leveraging his professional advantages, Liu Hongdou gained insights into numerous domestic diabetes management companies and traveled abroad to meet with the core teams of leading digital chronic disease management enterprises, including Livongo, for inspection and research. Through exchanges with multiple entrepreneurs in the field of diabetes management, he concluded that the business model of selling medical devices and pharmaceuticals directly to consumers (C-end) in China would be difficult to sustain.

There are several reasons for this. First, most of these models attract patients by enabling them to consult physicians via mobile apps. However, physicians already have heavy workloads involving outpatient clinics, inpatient care, and academic responsibilities. Online consultations are not integrated into their core diabetes management duties, becoming merely a “side hustle.” Only with substantial subsidies are some physicians willing to devote extra time to handling patient inquiries. Yet the high cost of user subsidies yields only lightweight online consultations, failing to deliver diabetes management services that provide genuine value to patients.

Second, although diabetic patients may download a particular app on their physicians’ recommendation, they are not necessarily likely to purchase products through that app; instead, they are more inclined to buy from large e-commerce platforms that offer high credibility, superior service, and lower prices. This renders the profit models designed by many startups mere castles in the air.

Furthermore, the diabetes products that e-commerce could not cover were primarily prescription drugs; however, at that time, prescription drugs were not permitted to be distributed via the internet.

Finally, launching an online marketplace requires addressing logistics systems, supply chains, and other issues, which goes beyond the original intent of innovating digital diabetes management. Therefore, Liu Hongdou believes that the strategy of vying for C-end users during the “Hundred Sugar War” was a misguided path.

After extensive research, he found that the majority of diabetes management apps on the market fall far short of the international definitions of digital therapeutics and professional disease management applications. Core features such as blood glucose logging, dietary tracking, and exercise monitoring are largely overshadowed by in-app marketplaces and advertisements, let alone advanced functionalities like personalized recommendations that highlight the advantages of digital therapeutics.

The low technical barrier to entry in diabetes management has led to a surge of participants flocking into the field, resulting in cutthroat competition.The comprehensive threshold for diabetes management is also high, necessitating a reshaping of the treatment and management processes for diabetes, an understanding of the pain points in the details of diagnosis and treatment, and an exploration of customer needs...Only by completing numerous mundane tasks, accounting for every detail in diabetes management, and clarifying how technology can reshape current diabetes care, can truly valuable digital diabetes management innovations be achieved.

However, most of those who have flocked to this field fail to attend to these details, which has eroded patient (user) confidence in similar products and driven up the cost of market education.

After prolonged deliberation, Liu Hongdou decided to temporarily refrain from investing in incubation-related projects, as the sector remains immature. However, he has not abandoned his focus on diabetes management; instead, he frequently monitors the development of foreign enterprises and reflects on the disparities between the domestic and international environments...

In the field of digital diabetes care, rapid progress is being made abroad, while development in China faces significant challenges. Although China and the United States differ substantially in their healthcare payment systems and overall healthcare structures, patient conditions, treatment philosophies, therapeutic strategies, and relevant clinical guidelines are largely similar. Why, then, is there such a marked disparity in the pace of development in diabetes management between China and the United States?

“As research into the digital management of diabetes deepens, I feel that the domestic companies previously surveyed have done too little,” Liu Hongdou told VCBeat.We must recognize both the differences and similarities between China and the United States, and build our business logic on the areas of similarity.”

In 2016, the ever-ambitious Liu Hongdou left Porton Pharma Solutions, where he enjoyed a lucrative compensation package, to found SUGRQ, determined to make his mark in the field of diabetes management.

In 2016, a large number of companies in the diabetes management sector disappeared, while others emerged. As many were contemplating whether to abandon the consumer (C-end) market, SUGRQ had already begun developing products targeted at the business (B-end) sector.

Liu Hongdou explained, “From the very beginning of our venture, we had no intention of targeting consumers directly, as this is not a viable path. Instead, by focusing on hospitals and digitally upgrading diabetes management services within endocrinology departments, we empower medical institutions to manage patients more effectively and conveniently. This approach not only benefits the vast population of individuals with diabetes but also allows us to leverage the momentum of hospital informatization.”

However, the digital management of diabetes presents significant challenges, requiring a reshaping of diagnostic, treatment, and management workflows; a deep understanding of the needs of patients, physicians, and hospitals; and demonstrated achievements in digital therapeutics. To this end, SUGRQ has been committed from the outset to building a core founding team capable of leading professional innovation, and has established three major centers within its organizational structure: the Product R&D Center, the Technology Center, and the Project Operations Center.

The Product R&D Center is composed of domestic and international experts, consultants, and seasoned professionals. It is primarily responsible for researching the digital domain and exploring how to manage diabetes through digital technologies. Its research outcomes serve as product prototypes, which are then developed by the Technology Center.

The Technology Center is composed of cross-disciplinary experts in software, hardware, and embedded integration, primarily responsible for productizing ideas and resolving challenges such as compatibility and intelligent algorithms. The Project Operations Center focuses on gaining an in-depth understanding of multi-party needs, assisting medical institutions in adopting and utilizing products.

After years of research and development, SUGRQ launched Rui Kong Tang (formerly known as Rui Tang) in July 2019—a professional, end-to-end diabetes management system designed for use by healthcare institutions. This system helps hospitals establish diabetes management models and clinical workflows tailored to their specific needs.

Liu Hongdou told VCBeat: “SUGRQ will reshape hospitals’ diabetes diagnosis, treatment, and management workflows, facilitating digital upgrades across all stages—from patient intake, testing, and diagnosis to treatment planning and diabetes management. This will establish a novel, comprehensive, and continuous blood glucose management model covering outpatient, remote, and inpatient care settings."Meanwhile, SUGRQ's Project Operations Center will assist hospitals in product implementation and provide guidance on the use of the Ruikongtang System."

The Ruikongtang System is compatible with a variety of blood glucose meters, continuous glucose monitors (CGMs), insulin pumps, and health applications, enabling the acquisition of patient health data, as well as information on diet and exercise. Leveraging this data, physicians can develop personalized treatment plans for patients.

For physicians, the population management and risk assessment features of the RuiKongTang system can significantly enhance the efficiency and quality of diabetes management. Furthermore, the clinical data accumulated through managing diabetic patients can support the improvement of physicians’ clinical skills and serve as a resource for clinical scientific research.

Notably, the risk assessment feature can provide appropriate recommendations based on the patient’s level of criticality. For instance, if a patient is in a critical condition, the system will immediately alert the patient and their family members, and notify the healthcare team to conduct remote intervention and guidance within 4 hours. If the patient’s condition poses a risk, the system will prompt the healthcare team to monitor the situation and provide remote guidance within 24 hours. In cases of fluctuating conditions, education nurses can offer effective feedback during regular remote follow-ups, recommending that physicians pay close attention during the patient’s next follow-up visit.

Meanwhile, SUGRQ tailors a comprehensive blood glucose management model that integrates outpatient, remote, and inpatient scenarios to align with each hospital’s medical resources, ensuring seamless system adoption and operation.

Currently, SUGRQ has secured over 30 clients across China and achieved break-even. Meanwhile, it has entered into strategic cooperation agreements with leading pharmaceutical and medical device companies in the diabetes sector to conduct joint R&D and co-promotion, thereby providing customers with more comprehensive and integrated total solutions.

Furthermore, after entering the Chongqing market, the company integrated relevant industry resources with the assistance of the Municipal Cloud Computing and Big Data Association, and collaborated with local entities to actively apply for municipal-level projects.

In the future, SUGRQ will continue to focus on the field of diabetes management, innovate its RuiKongTang system, and accelerate its promotion to increase market penetration.

Finally, Liu Hongdou stated, “SUGRQ is currently in a healthy financial position. Its products, technology, and business model have been substantially validated, and the company is poised to enter a phase of rapid expansion. In 2020, it will launch its Series B financing round to accelerate growth and swiftly capture market share.” Previously, SUGRQ had secured Series A financing in 2017 from an industrial investment fund affiliated with a publicly listed pharmaceutical company.