Traditional Pharmaceutical Giant Renhe Group Unveils Internet Transformation Strategy and Digital Health Ecosystem in IPO Prospectus

As early as the beginning of this year, Renhe Group announced its collaboration with more than 200 pharmaceutical companies to jointly build the “Heli IoT M2F” platform. Half a year later, Renhe’s more ambitious internet strategy has come to light.

At the reMED Conference on July 11, Renhe Group announced its “Internet+” pharmaceutical strategy, built upon a full industry chain model integrating M2F, B2B, and O2O, with health management as the front-end interface and Dingdang Kuaiyao as the service platform.

Renhe’s Full Industry Chain Layout in the Internet Sector

Renhe’s M2F model consolidates the procurement demands of pharmaceutical manufacturers to achieve economies of scale, thereby optimizing pricing and processes and addressing challenges such as fragmented upstream raw material sourcing.

In the B2B model, Renhe will address the high costs, as well as the challenges in ensuring timeliness, reliability, and stability, resulting from fragmented pharmaceutical procurement at retail terminals. By connecting both ends through its B2B platform, Renhe reduces information asymmetry and resolves the efficiency issues encountered in traditional wholesale and retail operations.

In the O2O model, Renhe leverages its Dingdang Kuaiyao app to address key pain points for patients, such as high medication costs and limited convenience. By delivering medications to customers within 28 minutes, it aims to win over users and capture market share through fast, efficient, and attentive service.

Smart Health is a comprehensive health management service platform built on Dingdang Cloud Health Management (Beijing) Co., Ltd. It leverages the traditional advantageous resources of Renhe Group, integrated with internet technology, to create an ecosystem for the broader health industry. The platform integrates services and sales, including real-time smart health monitoring, health management, health consultations, community engagement, and online retail.

Internet Transformation Is a Transformation of Mindset

Yang Wenlong, Chairman of Renhe Group, stated that throughout Renhe’s 15-year development journey, the company has addressed users’ pain points and needs at every stage.

2000–2005: Channel-is-King Strategy. Renhe established a nationwide marketing network over five years. 2005–2010: Brand Strategy. During this period, consumers preferred branded products; they purchased from companies with strong brand recognition, effective advertising, and high-quality products. Fuyanjie, Shanliang, and Youkadan became nationally renowned brands during this time, driven by their advertising campaigns. 2010–2015: Terminal Strategy. In this phase, Renhe built a sales force of 18,000 people and conducted terminal promotional activities across various regions, towns, county-level cities, and pharmacies. Despite reduced advertising expenditure, sales continued to grow. Currently, Renhe is undergoing a comprehensive digital transformation, shifting the competitive battlefield to the cloud.

For traditional enterprises, digital transformation is fundamentally a shift in mindset. The willingness of business owners to embrace change directly determines the success or failure of this transformation.

First, bosses must adopt a learning mindset. If you don’t understand something, learn it; don’t pretend to know. In the internet industry, there must be dissenting voices within the company; it cannot follow the traditional model where the boss has the final say.

Second, sharing of operational thinking. Traditional enterprises are company-centric, prioritizing how the company can generate profit. Products, marketing, and branding are defined based on the company’s return on investment (ROI) and profitability model. In contrast, the internet industry is unequivocally user-centric, with a particular emphasis on user experience.

Third, the sharing of management philosophy. Traditional management is invariably characterized by centralized, top-down control. In contrast, internet-based enterprises must adopt a modular management structure. For instance, at Dingdang Kuaiyao, departments such as Operations, City Development, Marketing Planning, and Product & Technology fully leverage the innovative potential of each employee and maximize the capabilities of every small team.

The fourth principle is the sharing mindset. Most owners in traditional industries operate under an employment-based model, where employees receive salaries and bonuses. In contrast, Internet companies must implement broad-based employee equity participation to foster a culture of intrapreneurship across the entire organization. As the saying goes, “you must give to receive.” Currently, mid- and senior-level executives at Dingdang Kuaiyao have been allocated approximately 30% of the company’s shares.

Smart Hardware Bridges Online and Offline

Tang Dekai, CEO of Dingdang Cloud Health Management (Beijing) Co., Ltd., stated that without the support of traditional resources, Renhe itself would not be able to perform better than others in cloud health. “By leveraging smart hardware and relying on offline channels—including 320,000 partner pharmacies, 18,000 sales personnel, as well as cooperating medical institutions, physical examination centers, and fitness facilities—we can promote smart hardware more effectively to better acquire users.”





Moreover, the Dingdang Health Cloud App is no longer merely a platform for smart hardware and health assessment and risk management based on data from such devices; it also incorporates doctor-patient communication, community features, and an e-commerce marketplace, which distinguishes it from other cloud-based health platforms.

For example, Renhe has deployed its health smart all-in-one kiosks in 20 pharmacies. On average, each kiosk acquires more than 200 customers, with this figure reaching 300 during promotional campaigns.

Here, we must mention another product from Renhe: Smart Youkadan.

According to Xu Huansheng, Renhe’s Smart Youkadan consists of two components. The first is a thermometer patch applied to the child’s navel each night before sleep; it triggers an alert if the temperature falls below 25°C, warning of a potential risk of catching a cold. The second component is a wristband. To avoid waking up the entire household with audible alarms, Renhe designed the wristband to deliver vibratory alerts, notifying caregivers of the child’s potential cold risk. “This approach ensures that users engage with our product on a daily basis, fostering ongoing interaction and communication, thereby cultivating long-term user stickiness.”

In fact, the idea to develop the product “Smart Youkadan” was also the result of Renhe’s reverse thinking.

Xu Huansheng, strategic advisor to Renhe Group, stated that Renhe initially sought to transform the original consumers of Youkadan into engaged users. The company first considered printing QR codes on its products but ultimately concluded that this was merely a superficial gesture that failed to bring about substantive change. Subsequently, the company conceived the idea of developing a product designed to prevent fever and colds in children.

After the launch of Smart Youkadan, another key pain point for users is: How can Renhe quickly resolve the issue if a child catches a cold or develops a fever?

This is the heavy responsibility that Dingdang Medicine Express bears.

The Dingdang Kuaiyao App serves as a user traffic entry point.

Dingdang Express Medicine was launched on February 16. With its user base surpassing one million, the platform has experienced rapid growth, fully demonstrating the advantages of established pharmaceutical brands. Its fast and convenient medicine delivery service has also been well received by users. By the end of May, coverage extended to all areas within Beijing’s Sixth Ring Road; in June, it expanded to three cities (Chengdu, Hangzhou, and Guangzhou); in July, it entered six additional markets (Shenyang, Wuhan, Shanghai, Nanjing, Chongqing, and Jinan). Nationwide coverage across China is scheduled to be achieved by the end of the year.

Dingdang Kuaiyao's Development Plan for This Year

Currently, Dingdang Cloud Health has established four major product systems: mobile applications, smart wearable devices, all-in-one smart detection kiosks, and health wellness products. Among these, the Dingdang Kuaiyao app serves as the primary user acquisition channel, providing a user base for health management services. Conversely, when users of these health management services require medication, their needs can be fulfilled through Dingdang Kuaiyao.

In the upstream segment of the industry chain, Renhe Group’s own branded pharmaceuticals and its FSC (Factory Service Customer) Alliance—also known as the Pharmaceutical Enterprise Alliance Health Services Project—provide Dingdang Kuaiyao with robust competitive support.

The so-called FSC Alliance, jointly established by Dingdang Kuaiyao and 260 renowned pharmaceutical companies, created the “FSC” model. By centralizing the procurement of raw materials, packaging materials, excipients, and other inputs from alliance members, it reduces drug costs at the upstream end of the industrial chain, thereby lowering drug prices.

In addition to 200 pharmaceutical companies, several well-known pharmacy chains have also joined the “FSC.” After users place orders via the app, licensed pharmacists promptly provide guidance on safe medication use, while professional delivery personnel from the pharmacies ensure free door-to-door delivery within 28 minutes. In this way, Renhe has built a complete service chain covering material procurement, production, wholesale, retail, and last-mile services.“On one hand, we leverage traditional resources; on the other, we harness internet technology to comprehensively optimize 32 processes, including order acceptance, picking, and delivery. At the same time, we implement specialized process training for offline staff to standardize their operations,” said Yu Lei, Senior Vice President of Dingdang Kuaiyao under Renhe Group.

In the future, Renhe will expand its offerings around pharmacies, pharmaceuticals, medical services, and more, providing value-added services for users' personalized, long-term health management.

According to Xu Huansheng, Renhe initially intended to partner with third-party pharmacies to launch Dingdang Kuaiyao. However, these pharmacies showed limited enthusiasm due to conflicts between their online and offline pricing systems. Ultimately, Renhe chose to fully acquire 50 pharmacies, underscoring its strong commitment to digital transformation.

Dingdang Medicine’s Version 3.0 also introduces a pharmacist consultation feature. When placing an order, users are subject to detailed inquiries by pharmacists regarding their medical conditions and symptoms, enabling the provision of optimal medication regimens.

To address the challenge of pharmacy restocking, Renhe has also developed a mobile app that enables online replenishment for all its self-operated pharmacies and a portion of its franchised outlets. “Previously, store owners had to pick up medications themselves, or pharmaceutical representatives would deliver them. Now, pharmacy owners can simply place orders via their smartphones, and the medications are delivered free of charge directly to their stores,” explained Xu Huansheng.

Moreover, Dingdang Kuaiyao is also developing its own open platform for third-party use. “This is a market worth trillions of yuan. The goal is not to generate profits from transactions, but rather through supply chain finance. For instance, JD.com has yet to turn a profit to date, but with an annual gross merchandise volume (GMV) of several trillion yuan, there are substantial opportunities in supply chain finance.”

VCBeat is continuously conducting in-depth reporting and research on pharmaceutical companies’ transition to internet healthcare, and welcomes more pharmaceutical enterprises to engage in discussions with us.