From 'Zhangshang Tangyi' to Zhiyun Health: Can It Become a Unicorn in Chronic Disease Management?

In 2015, the diabetes sector witnessed a “Hundred Apps War,” with users easily finding over one hundred diabetes-related mobile applications. However, this year we observe that fewer than five diabetes management companies have survived the aftermath, ushering the market into an era of intense fragmentation and competition akin to the Warring States period.

Among these surviving companies, Tang Doctor has consistently been an industry leader, with its business expanding significantly. Within three years, it covered 500 hospitals, amassed over 5 million registered users on its platform, achieved RMB 200 million in revenue, and recorded a compound annual growth rate (CAGR) of up to 1,000%.

However, the “ambition” of Tangshang Yi extends far beyond diabetes as a single disease; its target is the broader blue ocean of chronic disease management. On November 8, at the 2017 Tencent Global Partner Conference, Kuang Ming, Founder and CEO of Tangshang Yi, officially announced that"Zhangshang Tangyi" has been upgraded to "Zhiyun Group," integrating its subsidiaries' businesses and officially entering the entire chronic disease management sector.

Why choose to upgrade the brand at this time?

Kuang Ming told VCBeat, “In fact, at the outset of our venture, we positioned ourselves as a company focused on chronic disease data and management—not limited to diabetes as a single condition, but aiming to manage the entire spectrum of chronic diseases. However, for a startup, it is quite challenging to roll out extensive operations from the very beginning. Therefore, we adopted a strategy of focused breakthrough, starting with diabetes before expanding into the broader chronic disease sector.”

“By now, our diabetes business has become quite mature with a solid foundation, so it is time to expand into the broader blue ocean of chronic disease management. Moreover, the data collection and management approaches we have developed in the diabetes sector will enable us to rapidly penetrate the entire chronic disease market.”

What Opportunities and Challenges Does Brand Upgrading Bring to Zhiyun Group?

In Kuang Ming’s view, following the brand upgrade, the company’s positioning has become clearer: it is committed to becoming a technology-driven enterprise built on chronic disease data. Meanwhile, the company’s slogan has been refined to “Using data to help users return to a healthy lifestyle.”

Kuang Ming further emphasized that the brand upgrade has removed the ceiling on the company’s growth potential.“Previously, we may have had many excellent opportunities, but due to being labeled as ‘Tangyi,’ we were limited to diabetes-related activities. Now that the ceiling has been lifted, we will gain more opportunities, and collaboration with hospitals will also become easier.”

As for the challenges, Kuang Ming believes that following the brand upgrade, the company faces higher demands in areas such as data processing, product design, and data architecture. Previously, when the focus was solely on diabetes management, the volume of data was relatively manageable. However, with the inclusion of additional disease categories, management has become more complex. Furthermore, there may be overlaps among these conditions; for instance, a patient with diabetes may also suffer from hypertension. These are issues that Zhiyun may encounter in the future, but Kuang Ming states that he thrives on tackling challenging tasks.

Currently,Zhiyun’s business primarily comprises two SaaS systems (for in-hospital and out-of-hospital settings) and an e-commerce platform.The SaaS system within the hospital is namedZhiyun Medical Hub, an intelligent hardware module upgrades traditional medical glucose meters into “Touchscreen Smart Blood Glucose Monitoring Device” to achieve digitalized data collection and integration with the hospital’s HIS system.

Zhiyun Yihui is primarily used to optimize the diagnosis and treatment processes for chronic diseases within hospitals. Kuang Ming pointed out that, currently, in the field of chronic disease management, internal hospital workflows are highly unclear, with many tasks still performed manually. This not only results in low efficiency but also leads to a high error rate. Therefore, it is essential to implement the Zhiyun Yihui system within hospitals. By leveraging the Zhiyun Yihui SaaS platform to standardize and intelligentize internal hospital management processes, medical institutions can significantly improve physicians’ work efficiency and reduce error rates.

Meanwhile, post-discharge management is also crucial for patients with chronic diseases. Zhiyun has been committed to managing patients outside the hospital setting for three years, building on its previously established diabetes management platform.Pocket Glucose Doctor APPIt was executed with great success.

The Palm Sugar Doctor app is a professional product specifically tailored for patients with diabetes, helping them easily record and manage their blood glucose levels. In collaboration with the Diabetes Center at Harvard Medical School, Palm Sugar Doctor provides personalized dietary, exercise, and medication plans based on each patient’s health status. With the support of Palm Sugar Doctor, patients can enhance their self-management capabilities, while hospital-based physicians can remotely monitor patients’ post-discharge conditions and provide timely diagnosis and treatment.

The organic integration of in-hospital and out-of-hospital care undoubtedly forms a closed-loop system for chronic disease management. Kuang Ming stated, ““When the two platforms are integrated, you will find that we already possess content and data covering the entire user lifecycle. We can then provide this data to physicians or healthcare institutions to help them devise better treatment plans. This is the role Zhiyun plays within the chronic disease management ecosystem—as a technology provider.”

Furthermore, to provide more comprehensive services to patients, Zhiyun has also established a pharmaceutical e-commerce platform—Guo Yi Tang, providing users with medical devices, traditional Chinese and Western medicines, and wellness products. In this regard, Kuang Ming stated, “For patients with chronic diseases, there is still a demand for medications and consumables after discharge from the hospital. So why shouldn’t we meet this need?”

According to VCBeat, Zhiyun’s previous e-commerce platform—the store within the Zhangshang Tangyi (Pocket Diabetes Doctor) app—was primarily integrated via third-party providers. This year, following the Chinese government’s policy change that abolished the approval requirements for Class A, B, and C licenses in pharmaceutical e-commerce, Zhiyun decided to directly acquire Shandong Guoyitang Pharmacy Chain Co., Ltd., thereby formally establishing Guoyitang Pharmaceutical E-commerce.

In this way, by integrating out-of-hospital and in-hospital care, online and offline services, and software and hardware solutions, Zhiyun has broken down the walls of hospitals, connected data between healthcare providers and patients, and created an ecosystem for chronic disease management.

“In fact, since our inception, we have undertaken extensive explorations. In retrospect,”The customer acquisition channel that best aligns with our business model, most effectively addresses user pain points, and delivers the highest efficiency remains collaboration with hospitals.“Kuang Ming stated.

It is reported that at its inception (during the “Zhangshang Tangyi” period), Zhiyun Group targeted consumer-end customers. The company developed a “Sugar+” hardware product that connects to patients’ glucose meters, enabling users to view their data in real time on their smartphones. The backend system loads different functional templates based on the user’s condition, and also facilitates community-based interactions.

However, shortly after operations commenced, Kuang Ming discovered numerous drawbacks in the practical application of consumer-side (C-end) data: first, patient-collected data were incomplete with respect to disease progression; second, there were gaps in the patient data collected from the home setting.

Therefore,In 2016, Zhiyun Group underwent a strategic adjustment to focus on hospital clients, targeting pain points such as low efficiency and high error rates in management processes, and began developing in-hospital systems.

According to Kuang Ming, the clients currently collaborating with Zhiyun are primarily those with a sufficient patient volume.“Traffic-Centric Hospital”, extending beyond large tertiary hospitals in major cities to reach second- and third-tier cities or secondary-grade hospitals.

In fact, to achieve faster and broader coverage, rapidly capture market share, and secure a sufficient sample size, Zhiyun initially targeted secondary hospitals. Given that the admission process for large tertiary hospitals is particularly complex and time-consuming, Zhiyun preferred to partner with hospitals that offered both rapid decision-making and substantial scale in its early stages.

To date, Zhiyun Group has partnered with nearly 500 hospitals in China, serving over 5 million users, and expects to collaborate with 1,500 hospitals by next year.

Moreover, within three years of its establishment, Zhiyun has achieved RMB 200 million in revenue, with its compound annual growth rate increasing tenfold to reach 1,000%.Kuang Ming revealed that 80% of the current RMB 200 million in revenue comes from its B2C e-commerce platform. However, Kuang believes that the B2B sector will become a significant profit source for Zhiyun next year, conservatively estimated to generate RMB 300-400 million in revenue.

We observe that unique strategic decisions have played a crucial role in the rapid growth of Zhiyun Group.

As hospital-side deployments expand, the volume of data generated by Zhiyun Yihui’s in-hospital systems continues to grow, necessitating new approaches to unlock the value embedded within these data.In early 2017, Zhiyun Group began to make some attempts in the field of AI-assisted diagnosis. And inNot long ago, Zhiyun also invested in a U.S. AI company, integrating it with its self-developed AI solutions to further advance its AI-assisted diagnostics business.

According to Kuang Ming,The AI system developed by Zhiyun is primarily designed to enhance the efficiency of hospital diagnosis and treatment workflows. He believes that the value of AI in chronic disease management lies in addressing the current imbalance between supply and demand in this field.

“China has approximately 400 to 500 million people with chronic diseases, while the number of physicians capable of providing specialized care—excluding primary care practitioners—is only 30,000 to 40,000. It is within this significant imbalance that the value of AI becomes evident. AI can alleviate part of physicians’ workload and assist less-experienced primary care providers in delivering therapeutic interventions, such as using AI-based training to teach them how to administer insulin injections.”

Zhiyun’s exploration in the AI field is ongoing. Kuang Ming revealed that the company is leveraging its data advantages by using large-scale data samples for machine training, while also applying its AI systems to real-world hospital settings for clinical trials.

Throughout the interview, Kuang Ming repeatedly emphasized that Zhiyun aims to become an expert in the entire field of chronic disease management. Therefore, in addition to diabetes, Zhiyun will expand its services to include the management of other chronic conditions such as hypertension, thyroid disorders, and gestational diabetes.

Having devoted three years to the field of diabetes, Kuang Ming has developed a distinctive perspective on chronic disease management. For instance, regarding chronic conditions during pregnancy, Kuang Ming, who considers himself a “medical layperson,” observes that although gestational diabetes, gestational hypertension (pregnancy-induced hypertension), and gestational thyroid disorders represent niche subfields, their treatment protocols and clinical pathways differ significantly from those for conventional diabetes, hypertension, and thyroid diseases.

Therefore,On November 3, 2017, Zhiyun Group launched the “Gestational Diabetes Care Initiative,” shifting its focus to comprehensive management of gestational diabetes.It is reported that, to fully roll out the initiative, Zhiyun has established collaborations with 85 of China’s top-ranked hospitals (including Peking University People’s Hospital, Peking Union Medical College Hospital, and the PLA General Hospital [301 Hospital]), with implementation already completed at 40 to 50 hospitals.

During the collaboration, Kuang Ming also discovered that there is currently substantial demand among clients for gestational diabetes management, further strengthening his resolve to continue targeting this niche market.

“Given the substantial size of this population—with 30 million pregnant women in China annually—gestational diabetes mellitus (GDM), gestational hypertension, and gestational thyroid disorders are the most prevalent chronic conditions during pregnancy. The combined broad-sense incidence rate of these conditions reaches as high as 30%. Although this represents a siloed market, the absolute patient volume is significant, and the demand is highly inelastic.”