During the Pneumonia Outbreak, Spring Festival Masks Became the Anxiety Outlet for Hundreds of Millions: Sinuo Era Files IPO Prospectus
Li Ke is a nurse in the Department of Respiratory and Critical Care Medicine at a district-level people’s hospital in Chongqing. By mid-January 2020, the word “mask” appeared with increasing frequency in her department’s work group chat.
Since the outbreak of the novel coronavirus pneumonia epidemic, the hospital has mandated that all staff members wear masks and disposable caps in work areas. Medical surgical masks are supplied in limited daily quantities and must be collected upon signature. According to her understanding, the hospital’s supply of medical surgical masks has been exhausted, with daily operations relying entirely on existing stockpiles; no public appeal for assistance has been issued thus far. For several consecutive days, the department’s work group chat has been tracking daily consumption of medical surgical masks and reminding healthcare workers to use them sparingly.
Li Ke’s hospital is one of the 174 hospitals in Chongqing that established fever clinics during the COVID-19 pandemic. According to regulations, all hospital departments are uniformly equipped with surgical masks and disposable masks. Surgical masks must be replaced at least every four hours for staff with frequent patient contact. Healthcare workers who come into contact with suspected patients are required to wear disposable isolation gowns and N95 respirators.
“Patients seen at the fever clinic are first sent to our department; each nurse admits at least five patients per shift,” Li Ke told VCBeat. Masks are the most common and basic protective equipment in the respiratory department. Although suppliers have changed frequently, the supply had remained stable previously. The recent increase in patient volume coupled with tightening mask supplies has made her and her colleagues feel quite unaccustomed to the situation.
Data released by JD Health shows that from January 19 to 22, the JD platform sold a cumulative total of over 126 million face masks, 310,000 bottles of disinfectant, and 1 million bottles of hand sanitizer. JD stated that the company has established direct-operated partnerships with most core mask manufacturers, such as 3M and Honeywell. This allows products to move directly from manufacturers’ production lines into JD warehouses, ensuring delivery to customers at the fastest possible speed. JD has also immediately assigned dedicated personnel to work closely with multiple suppliers to increase production capacity and replenish supplies.
From January 22 to 24, an average of over 15.8 million face masks from major brands such as 3M and Honeywell were warehoused and listed on the JD.com platform daily via expedited logistics channels. A representative from JD Health informed VCBeat that during the Spring Festival holiday, JD Logistics will continue to ensure normal order placement and home delivery services in nearly 300 cities and thousands of districts and counties across China, while prioritizing the delivery of orders designated by medical institutions.
In the offline sector, VCBeat’s visits to major pharmacies across the city revealed that despite sporadic restocking, all medical-grade masks, including disposable standard surgical masks, are nearly out of stock in the non-hospital market. Major brands such as 3M, Honeywell, and Winner Medical have explicitly announced that they will no longer guarantee supply to the non-hospital market, directing all production capacity to support hospitals in epidemic-affected areas. A sales associate at a chain pharmacy told VCBeat that loose-stock masks occasionally become available for sale, with customers inquiring about purchases daily. “Customers now buy masks without asking about price or type; if they are medical-grade masks, people try to buy up whatever stock is available,” the associate stated. “We distribute incoming mask supplies among those waiting on-site and do not raise prices, but we cannot ensure a stable supply.”
In recent days, Yao Jia’s mobile phone has been significantly busier than usual. Distributors who had already concluded their annual meetings and were preparing to return to their hometowns for the Spring Festival flocked to him, expressing their willingness to pay premium prices to stockpile masks. In fact, Yao Jia’s factory had already been operating at full capacity around the clock for several days to ensure production. Some distributors even drove their trucks directly to the factory gate, ready to intercept shipments as they left. The unusual activity in the distribution channels made Yao Jia keenly aware that this market trend was unstoppable. He felt that, as a mask manufacturer, he should take action.
The novel coronavirus outbreak, suspected to have originated from a seafood market in Wuhan, Hubei Province, progressed rapidly: In December 2019, some medical institutions in Wuhan City, Hubei Province, successively reported patients with pneumonia of unknown cause, all diagnosed as viral pneumonia or pulmonary infection; on January 7, 2020, researchers isolated a novel virus exhibiting typical coronal morphology under electron microscopy from samples of one patient with this viral pneumonia and obtained its full genome sequence; on the 12th of the same month, the World Health Organization officially named the novel coronavirus causing the Wuhan pneumonia outbreak “2019 Novel Coronavirus” (2019-nCoV); on the 20th, infectious disease expert Zhong Nanshan warned the Chinese public via television that the 2019 Novel Coronavirus could transmit between humans, urging people to “avoid traveling to Wuhan if possible!”
Yao Jia is the founder of Sinuo Times, a professional supplier of infection control products and services. Its personal protective equipment line, Siwo Masks, offers a professional series of masks designed to meet air filtration needs. He told VCBeat that since the end of last month, their sales company in Beijing and manufacturing plant in Jinan have been receiving urgent orders from hospitals for medical protective masks and Hengshi Lamps (previously known as continuous-air ultraviolet sterilization devices). During the Spring Festival of the Year of the Rat (2020), everyone was on edge due to the unknown virus, and crowds flocked to pharmacies, snapping up the already limited stock of masks. “From the very beginning, we were determined to go all out to ensure an affordable supply of masks to epidemic-affected areas until we fully overcome the crisis.”
According to statistics, on January 20, 2020 alone, 400,860 people purchased face masks on the Taobao and Tmall platforms, leading to near-total stockouts across the entire online market. Even as merchants urgently replenished their supplies, the masks sold out rapidly. The total value of these masks amounted to RMB 76,091,712, equivalent to nearly half of the total sales volume in 2019. On that day, the search popularity for the keyword “face mask” was 7.94 times higher than the previous day. Over the following days, the average transaction value per customer for “face masks” rose from RMB 25.21 to RMB 51.39. Notably, the price of the popular item “N95 respirators” increased tenfold, yet they remained out of stock across all online platforms. On the evening of January 23, multiple hospitals in Wuhan issued announcements accepting donations, publicly requesting properly sourced and fully certified protective supplies, including N95 respirators, surgical masks, and disposable medical masks.
“N95” is a filtration efficiency rating for respirator filter media certified by the U.S. National Institute for Occupational Safety and Health (NIOSH). Specifically, it indicates that, under rigorous testing conditions, a given respirator can block at least 95% of very small (0.3-micron) test particles. Countries around the world have established different standards for assessing respirator protection levels. Respirators with protection levels equivalent to N95 include medical protective masks compliant with China’s mandatory standard GB19083-2010, KN95-level protective masks compliant with GB2626-2006, and FFP2-level protective masks compliant with European standards.
Medical protective masks, which are in short supply in the out-of-hospital market, are actually government-approved respirators designed to protect healthcare workers in specific medical environments. Both medical protective masks and KN95 respirators provide respiratory protection against airborne particles. The difference lies in the fact that medical protective masks meet additional requirements for use in medical settings, including blocking droplets and bacteria generated by the wearer’s breathing and talking from entering the surgical environment, and preventing penetration of high-pressure infectious body fluids splashed onto the mask during surgery or treatment, thereby avoiding contact with the wearer’s mouth and nose. Therefore, they must possess the functionalities of both standard N95 respirators and medical surgical masks. [MOU1]
“Although medical-grade protective masks are not the only option, N95-rated respirators remain an essential tool for preventing infection during the rapid spread of the novel coronavirus. ‘The virus attaches to tiny airborne particles and enters the body; therefore, it is crucial to ensure that every breath inhaled is filtered through the mask’s filter material,’ pointed out Yao Jia. ‘Ordinary masks struggle to provide such a level of protection.’”
For protective masks, the requirements of high filtration efficiency, good fit, and low breathing resistance almost form an impossible triangle, which is also an important reason why many people are unwilling to wear protective masks for a long time even when exposed to the risk of infection. Before the first Siwo mask was launched, Yao Jia and his team had invested more than 6 million in the research and development of protective masks with all three properties. "We gradually found that a sufficiently good protective mask is actually the sum of a large number of continuously improved details." Yao Jia told VCBeat that in order to ensure the fit of the mask, the R&D personnel specially added a three-dimensional ergonomic bracket inside the Siwo mask, which three-dimensionally supports the space of the mask, greatly increasing the area of the breathing space.
VCBeat’s searches on online marketplaces such as Tmall and JD.com revealed that after the outbreak of the epidemic, the selling price of Siwo masks remained stable, but various models were already sold out during the Spring Festival. “Our primary task during this period is to ensure supplies to designated medical institutions in affected areas. We have also arranged for workers to work overtime overnight to produce products for the civilian market. However, the demand gap caused by panic buying remains immeasurable,” Yao Jia disclosed.
Regardless of the volatility in distribution channels, Siwo Masks has remained committed to allocating medical protective masks to where they are most needed, rather than allowing them to go to the highest bidders. This was Yao Jia’s original intention when entering this new market cycle for protective masks. However, ensuring an affordable supply of medical protective masks amid severe shortages is not an easy decision to implement. “Unlike ordinary masks, the production of protective masks has its own specific characteristics,” Yao Jia pointed out. “Their application areas and manufacturing processes are relatively specialized, and the production cycle is long. Manufacturers find it difficult to rapidly adjust capacity in response to market changes. Most products currently flowing into the market are from manufacturers’ inventories. Meeting the sudden surge in mask demand requires coordination across all links of the industrial chain.”
The distribution channels are currently in significant disarray. Yao Jia interprets the artificially inflated prices of protective masks in the current market as follows: “Greed amid crisis has rapidly given rise to a gray area in protective mask trading.” Manufacturers do not have absolute control over the specific flow of their products through distribution networks; however, under the special circumstances of the outbreak, they prioritize supply to distributors with stable cooperative relationships in regions where shortages of protective masks are particularly acute. On the other hand, the majority of production capacity can be directed straight to medical institutions.
Furthermore, due to constrained raw material supplies and the approaching Spring Festival, which has reduced the available labor force, most protective mask manufacturers find it difficult to expand production capacity in the short term. Consequently, the current mask supply primarily relies on clearing existing inventory backlogs.
On the afternoon of the 22nd, Wei Molin, President of 3M China, the largest mask manufacturer in the United States, stated in an interview with CNR Business Voice that, following the outbreak of the novel coronavirus (2019-nCoV), 3M is making every effort to organize mask production and will maintain operations during the Spring Festival holiday. The company will spare no effort to replenish stocks of 3M masks that have sold out on its flagship stores on Tmall and JD.com, and has committed to maintaining price stability for mask products sold through its official flagship store. However, Wei noted that the supply-demand imbalance for protective masks cannot be resolved in the short term.
Yao Jia told VCBeat that, as Siwo Masks operates its own manufacturing facilities, locally recruited workers were able to work overtime to ensure production capacity during the Spring Festival. The company’s administrative, management, and sales teams remained on duty to support these efforts. On the evening of the 21st, workshop workers worked through the night until 8:00 a.m. on the 22nd, when they were relieved by another shift to continue production lines. This enabled the company to ramp up capacity to levels higher than those before the outbreak, prioritizing mask supplies for designated medical institutions across China treating epidemic cases, including those in Wuhan and Beijing.
In fact, as early as December 2019, Siwo Mask’s Wuhan branch had already received orders from hospitals, only to be informed that there was an urgent local need for medical protective masks and sterilization equipment. It was not until late January 2020, when the epidemic erupted on a large scale, that Siwo Mask Intelligence prioritized and balanced supply based on customer preferences and prevailing conditions. “We can no longer guarantee that the demands of every hospital will be fully met, but we will continue shipments to achieve broad coverage of hospitals treating patients.”
"As the epidemic continues to spread across China, masks can no longer meet all user demands. 'During the Spring Festival, the number of production line workers decreased, raw material suppliers' inventories were gradually depleted, and it became difficult for us to resume operations. The entire mask production and sales chain needs to unite to ensure supply,' said Yao Jia. He believes that from upstream raw material suppliers (who have already begun adjusting their payment policies, prioritizing deliveries to manufacturers who pay in full) to downstream distributors, everyone should prioritize the greater good. 'The sudden surge in market demand has indeed triggered some speculative behaviors within the industry chain, but everyone should proactively fulfill their social responsibilities.'"
Encouragingly, a concerted effort to ensure the supply of face masks is taking shape. According to VCBeat’s special coverage of the COVID-19 outbreak, titled “A Full Account of Wuhan’s Novel Pneumonia Prevention and Control Efforts,” as of 5:00 p.m. on the 27th, scarce supplies such as face masks and protective suits donated by enterprises and investment institutions were continuously being dispatched to support the affected areas.
On the 24th, JD.com announced that it would donate one million medical masks and 60,000 units of medical supplies to Wuhan in batches to alleviate the local shortage of medical resources. This included urgently sourcing and dispatching one million medical masks from across China to Wuhan in batches, as well as donating 60,000 units of medicines and medical supplies—including hand sanitizer, disinfectant, amoxicillin, and oseltamivir—from its local warehouses in Wuhan. On the same day, Weimai donated more than 30,000 masks to cities and counties throughout Hubei Province and to 11 hospitals nationwide. In addition, by the afternoon of January 25, some hospitals in Jinhua, Shaoxing, and other areas in Zhejiang Province had already received their shipments. On the 27th, Dawn Polymer, a supplier of specialized melt-blown material for masks, announced that it had received orders exceeding 10 million tons within three days and was making every effort to ensure production capacity.
On the 26th, Wuhan’s designated hospital for COVID-19 announced that the collected medical supplies, including masks and protective suits, were sufficient to meet current demands. This was the first piece of news this spring that brought relief to our furrowed brows.
In reality, as the COVID-19 pandemic intensified, ensuring the supply of protective masks became a systematic engineering endeavor. Admittedly, everyone faced immense challenges during the outbreak of a highly transmissible and lethal virus with an initially unclear origin. However, technological advancements driven by the changing times ensure that no human adversity remains an unsolved mystery. Hospitals and healthcare workers in epidemic areas could promptly voice their needs to the outside world; internet healthcare platforms mobilized resources and scoured every corner to locate products; manufacturers worked around the clock to guarantee production capacity; and VCBeat aimed to safeguard the peace of mind of every reader through comprehensive, real-time, and objective reporting.
For more updates on the novel coronavirus outbreak, scan the QR code to view the special report.
