RenYaoXing Files IPO to Capture China's Billion-Dollar Pharmaceutical Supply Chain Market with Integrated Logistics Solutions

Third-party pharmaceutical logistics has become a buzzword in the pharmaceutical distribution sector in recent years. Third-party logistics providers such as SF Express and JD.com have gradually penetrated the pharmaceutical logistics market, bringing significant disruption and impact to the traditional pharmaceutical distribution industry with their robust delivery networks and exceptional transportation capacity.

However, the entry of general social logistics providers into the pharmaceutical distribution sector faces numerous challenges. A lack of industry understanding and the absence of standardized regulations have, to some extent, hindered third-party logistics providers from penetrating the pharmaceutical field. From within the industry, enterprises specializing in pharmaceutical logistics are also under significant pressure due to policies such as the “VAT Reform” (replacing business tax with value-added tax) and the “Two-Invoice System.” These companies urgently need to address thorny issues such as securing waybill sources and matching supply with demand.

Anjie, a supply chain technology company, has targeted the shifting landscape of the pharmaceutical distribution industry. By addressing the matching of supply and demand in pharmaceutical logistics and enabling visualized control over transportation, it shares industry-wide pharmaceutical logistics resources with the aim of building an intelligent pharmaceutical supply chain platform called “Ren Yao Xing.” Rooted in the pharmaceutical sector, Ren Yao Xing provides GSP-compliant pharmaceutical supply chain and logistics services, along with nationwide logistics network solutions, drawing significant attention from the industry. It has also successfully established substantive collaborations with a number of pharmaceutical companies and third-party logistics providers, steadily increasing its market presence.

In October, as Chengdu entered autumn amidst the refreshing cool breeze, VCBeat (WeChat ID: vcbeat) conducted an exclusive interview with Anjie Supply Chain Technology Co., Ltd. and its newly launched fourth-party logistics platform for the pharmaceutical industry, “Ren Yao Xing.”

“By meeting regulatory and standardization requirements while ensuring a thorough understanding of Good Supply Practice (GSP) standards, we aim to address the high rates of redundant procurement and underutilization of industry resources—this is our strategic entry point.” In his brief opening remarks, Wang Lei, Founder and CEO, provided an insightful analysis of Ren Yao Hang’s business model.

Wang Lei, a quintessential STEM professional with a strong tech-oriented mindset, graduated from the University of Electronic Science and Technology of China. After completing his postgraduate studies, he served as Vice President of Product and Technology at major state-owned enterprises and listed technology companies, providing informatization solutions to numerous pharmaceutical firms, hospitals, and other institutions. During this period, he gained in-depth expertise in the healthcare, finance, and related sectors. After leaving the informatization company, Wang Lei formally established his team and founded Anjie Technology last year, entering the pharmaceutical supply chain (logistics) sector.

Wang Lei, Founder and CEO of Renyaoxing

From left to right, front row: Wang Lei, CEO,Peng Yi, Product Director

From right to left, front row: Song Tao, Operations Director; Chen Wei, Director of Strategic Marketing Department

“The pharmaceutical industry is inherently a serious sector, requiring adherence to stringent standards and regulations. It demands rigorous quality control and standardized operational processes; only upon meeting these requirements can business operations commence.” From the outset of the interview, Wang Lei expressed his reverence and respect for the pharmaceutical industry.

From a policy perspective, regulators have recently placed significant emphasis on pharmaceutical distribution and logistics. Key measures include the abolition of approval requirements for third-party pharmaceutical logistics in February last year, the introduction of updated drug traceability and Good Supply Practice (GSP) regulations, as well as the implementation of the “Two-Invoice System” and “Document No. 73.” These policy documents clearly indicate that while promoting openness and sharing in pharmaceutical logistics, the state has simultaneously strengthened regulatory oversight over pharmaceutical distribution practices and enhanced requirements for drug traceability.

Taking Document No. 73 as an example, it explicitly proposes leveraging advanced information technologies such as the internet, big data, and cloud computing to vigorously develop new business formats and models, including “Internet+” vehicle-cargo matching, “Internet+” capacity optimization, “Internet+” transportation coordination, and “Internet+” warehousing transactions. It aims to promote modern green pharmaceutical logistics, support the construction of pharmaceutical logistics systems, and encourage resource sharing among enterprises through collaborative logistics and joint distribution.

Wang Lei believes that in the current pharmaceutical logistics industry, "pharmaceuticals" should be the foundation, with "logistics" being secondary. In other words, the primary essence of "pharmaceutical logistics" lies in emphasizing "quality control"—specifically, how to ensure the safety, controllability, and traceability of pharmaceuticals, which are specialized goods, during transportation. Only after this should advanced logistics concepts, along with IoT and internet technologies, be employed to improve operational efficiency, optimize processes, increase vehicle load rates, and reduce costs.

Wang Lei explained that the core logic of Anjie’s “Ren Yao Xing” platform is to enter the market through pharmaceutical logistics, thereby achieving “connection, sharing, collaboration, and empowerment” of resources within the pharmaceutical industry, and providing productized logistics and supply chain services to pharmaceutical clients.

“Linkage” refers to using logistics as an entry point to connect information among pharmaceutical manufacturers, pharmaceutical distributors, third-party logistics companies, drivers, medical institutions, and pharmacies in the pharmaceutical distribution process. “Sharing” entails the sharing of pharmaceutical logistics resources, including warehouses, vehicles, equipment, and packaging materials, to fully utilize existing pharmaceutical logistics assets. “Collaboration” means effectively organizing third-party logistics companies to provide collaborative logistics services for pharmaceutical enterprises. “Empowerment” involves providing third-party logistics companies with a comprehensive suite of pharmaceutical logistics construction solutions that comply with Good Supply Practice (GSP) standards.

Wang Lei introduced that the future planning and development direction of "Ren Yao Xing" is to create a "Fourth-Party Pharmaceutical Supply Chain (Logistics) Platform." This platform will integrate fragmented and disorganized third-party logistics enterprises, establishing a comprehensive quality control and service system—the "SAVITE" system model: Safety, Accessibility, Visibility, Cost-controllability, Traceability, and Efficiency.

Ren Yaoxing Pharmaceutical Supply Chain (Logistics) Platform Model

Wang Lei stated that “Ren Yao Hang” will use pharmaceutical logistics as its entry point to provide supply chain platform solutions that meet the requirements of the pharmaceutical industry, including services such as freight matching, capacity optimization, distribution coordination, warehousing transactions, resource integration, and in-transit drug traceability. The platform will deepen its engagement with the pharmaceutical industry, improve full-chain supply chain services within the sector, and provide customers with comprehensive information data, financial, and insurance services. Its business scope includes pharmaceutical trunk line transportation, urban pharmaceutical distribution, pharmaceutical warehouse leasing, and clinical inspection sample transportation. Covered products include ambient-temperature drugs, cold-chain drugs, medical devices, blood products, and more.

Currently, “Ren Yao Xing” has entered into strategic cooperation agreements with Sinopharm, Shanghai Pharmaceuticals, JD.com, and a number of pharmaceutical companies and third-party logistics providers. Future collaboration will focus on business lines such as logistics resource matching, information and data integration, collaborative transportation, and drug traceability system services, aiming to help these partners manage their logistics resources and deliver more efficient pharmaceutical logistics solutions.

In addition, Ren Yaoxing has also made strategic moves in pharmaceutical supply chain finance. In the future, it will leverage pharmaceutical logistics and supply chain data to provide pre-screening risk control services for financial institutions. Through the platform, financial institutions will gain access to more comprehensive and multi-dimensional pharmaceutical supply chain data with higher efficiency in information extraction, while minimizing human interference.

“The accumulation and consolidation of risk data lay the foundation for future risk modeling; a systematic approval process further reduces the influence of human factors, enhances approval efficiency, and creates conditions for pharmaceutical clients and third-party logistics companies to enjoy personalized financial services.” This is how Wang Lei described the potential of the Renyaoxing platform in supply chain finance.

At present, Ren Yaoxing Platform has entered into a strategic cooperation agreement with a well-known financial institution. The two parties will collaborate in the areas of pharmaceutical supply chain, finance, and marketing to promote the development of pharmaceutical supply chain finance services. In the future, Ren Yaoxing will also provide a series of financial derivative services to third-party logistics enterprises, including financing and equipment retrofitting leases.

It is reported that “Ren Yao Xing” has secured seed funding in the millions, and a new round of financing is currently underway.