Gancao Doctor Files for IPO: Unlocking the Survival Strategy of TCM Internet Healthcare with 150K+ Physicians and 60+ Supply Chains

One day in 2015, six individuals with “special” identities gathered at a medical clinic in Hangzhou, Zhejiang.

They are either professors at Zhejiang Chinese Medical University, nationally recognized talents in Traditional Chinese Medicine (TCM), and heads of TCM-certified enterprises, or founders of domestic internet platforms, senior executives at local media outlets, and the founder of Youdao Health. Despite their diverse backgrounds, they all share the ambition to advance the TCM industry. Thus, the six individuals decided on the spot to join forces and embark on a venture together.

Thus, Hangzhou Ganzhicao Technology was established. After eight years of development, the company has built a comprehensive business ecosystem spanning “from online to offline” and “from disease treatment to health management.” Its services include online and offline TCM consultations, pharmaceutical care for traditional Chinese medicine, physician training, clinic operation and management, and the provision of TCM-related health and wellness products. The target clientele has gradually expanded from TCM practitioners and institutions to end consumers.

Amid the surge in popularity of large language models this year, Hangzhou Ganzhicao Technology is actively embracing this emerging technology to align with industry development trends and leverage technological innovation to drive the growth of the traditional Chinese medicine industry.

While we admire the founding team of Hangzhou Ganzhicao Technology for their dedication to their ideals, we cannot help but raise the following question—

On one hand, since the primary methods of diagnosis and treatment in Traditional Chinese Medicine (TCM) are “inspection, auscultation and olfaction, inquiry, and pulse-taking,” offline consultations appear to be more critical, posing greater challenges for the digitalization of TCM services. To date, internet-based TCM diagnosis and treatment remain in a nascent stage, characterized by small scale and low levels of informatization. The relatively limited market size has further intensified competition, making survival undoubtedly more challenging.

On the other hand, with the passage of time and the concerted efforts of various stakeholders, the internet-based TCM healthcare industry has indeed been moving forward. As Xu Zhiliang, founder and chairman of Hangzhou Ganzhicao Technology, put it, “The internet-based TCM healthcare market has gradually shown a trend of polarization, which will become even more pronounced in the future.” This means that the already fiercely competitive market will become even more intense, placing higher demands on companies’ capabilities.

Against this backdrop, how has Hangzhou Ganzhicao Technology steadily navigated its eight years of development to secure a place in the market? And how has it adapted to the emerging demands of the industry to survive and thrive amidst the wave of sectoral growth? In early December, Xu Zhiliang, Chairman of Hangzhou Ganzhicao Technology, provided answers to VCBeat.

Every time founder Cao Lingyong returns to his hometown, fellow villagers seek him out for medical advice and treatment. Cao always responds to their requests. On one occasion, while dining, he diagnosed a patient at the table; lacking paper, he wrote the prescription on a napkin. The villager then took the prescription to a pharmacy or hospital to have it filled...

As Cao Lingyong made more medical visits in his hometown, he began to ponder certain questions: Is there a way for TCM practitioners to provide consultations to patients anytime and anywhere? Is there a method to facilitate medication procurement for patients?

The more deeply we pondered, the clearer the concept became—“Traditional Chinese Medicine + Internet.”

At that time, China’s internet healthcare sector was experiencing an explosive growth phase. Recognizing the substantial market demand for follow-up consultations, the other five co-founders decided to enter the internet-based traditional Chinese medicine (TCM) healthcare market by launching online TCM follow-up consultation services.

Furthermore, it is worth noting that although Hangzhou Ganzhicao Technology positioned online follow-up consultations as its core business during the early stages of development, serving both doctors and patients, its service focus leaned more heavily toward physicians. This orientation set the tone for many of the company’s primary business activities over an extended period.

Specifically, Hangzhou Ganzhicao Technology first launched the Ganzhicao Doctor APP to provide physicians with online consultation and patient management services. Furthermore, the Ganzhicao Doctor APP (Physician Version) is positioned as a 24-hour mobile clinic for physicians, offering services such as patient check-in, online communication, online follow-up consultations, follow-up tracking, and patient education.

Furthermore, the Ganzhicao Doctor APP (Doctor Edition) connects with over 30 pharmaceutical brands and more than 1,800 specifications of traditional Chinese medicine (TCM) products, meeting doctors’ diverse medication needs. To provide higher-quality pharmaceutical services, Ganzhicao has also established its own Ganzhicao National TCM Hall in compliance with Good Supply Practice (GSP) standards. This facility not only sources TCM materials directly from their places of origin through centralized procurement but also ensures strict quality control. Additionally, to rapidly respond to doctors’ prescription needs, Ganzhicao has partnered with core suppliers of top-tier tertiary TCM hospitals and key provincial-level TCM hospitals across China, building a nationwide supply chain network comprising more than 60 lines.

Furthermore, given that in-person consultations offer a superior patient experience and that internet-based medical services are strictly prohibited from conducting initial diagnoses, Hangzhou Ganzhicao Technology has also established four self-operated Ganzhao Traditional Chinese Medicine Clinics offline.

Finally, to address the needs of TCM training and academic exchange, Hangzhou Ganzhicao Technology has launched the Ganzhicao Academy platform. The platform primarily offers services such as clinical practice courses in Traditional Chinese Medicine (TCM), a TCM discussion forum, access to hundreds of classic medical texts, and TCM reference tools, thereby supporting physicians’ professional development and facilitating communication and collaboration.

Moreover, in the interview, Xu Zhiliang revealed that Ganzhcao Doctor has jointly established the Joint Engineering Center for Traditional Chinese Medicine (TCM) Artificial Intelligence with Zhejiang Chinese Medical University to develop an AI-based TCM diagnostic system to assist clinical diagnosis. In addition, the two parties have launched a ChatGPT-like product, “Ganzhi Xuanqi Wendui,” which leverages intelligent Q&A AI technology to empower classical deep learning, clinical decision support, and scientific research.

It is evident that, at the current stage, the majority of services provided by Ganzhicao Doctor are targeted at physicians. The Ganzhicao Doctor App and Ganzhicao Traditional Chinese Medicine Clinics offer physicians online and offline consultation platforms. Ganzhicao Pharmacy, along with Ganzhicao Doctor’s partnered and self-built supply chains, aims to respond more effectively and rapidly to physicians’ prescription needs. Ganzhicao Academy provides a platform for physicians’ advanced learning and peer exchange. Furthermore, the application of AI technology will enhance physicians’ diagnostic and treatment efficiency while continuously empowering them in learning and scientific research.

These empowering features continue to attract an increasing number of physicians to join the platform. According to Xu Zhiliang, Chairman of Hangzhou Ganzhicao Technology, the Gancao Doctor APP has onboarded more than 150,000 physicians to date. Beyond serving individual practitioners, Hangzhou Ganzhicao Technology has observed, through its collaborations with third-party TCM clinics, that many smaller-scale TCM clinics frequently encounter challenges in operational management and herbal medicine supply chain management. In response, Hangzhou Ganzhicao Technology launched the Gancao Cloud Manager platform.

Specifically, Gancao Cloud Manager is a SaaS platform that provides integrated, intelligent information management solutions for medical institutions such as TCM clinics, integrated Chinese and Western medicine clinics, and Western medicine clinics. It has currently signed contracts with over 4,000 institutions. The services provided by Gancao Cloud Manager include operational performance management, precise pharmacy inventory management, intelligent electronic medical records, membership management, and marketing for customer acquisition, helping clinics improve operational efficiency and reduce pharmacy maintenance costs.

At this point, the services provided by Hangzhou Ganzhicao Technology already cover every aspect of physicians’ clinical practice, patient management, advanced learning, and scientific research, while also addressing key challenges in clinic operations with targeted solutions. Yet Hangzhou Ganzhicao Technology has not rested on its laurels; seeking further business breakthroughs, it has now set its sights on another market.

The answer is not hard to guess: the battlefield targeted by Hangzhou Ganzhicao Technology is the provision of TCM-based general health products to consumers.

In recent years, the Chinese government has continuously introduced policies to promote the development of the traditional Chinese medicine (TCM) industry. For instance, the Several Opinions of the State Council on Promoting the Development of the Health Service Industry, issued in 2013, proposed to “strengthen the cultivation, product research and development, and application of medicinal materials that are both edible and therapeutic.” Furthermore, the 14th Five-Year Plan for the Development of Traditional Chinese Medicine, released in 2022, called for “enriching the supply of TCM health products, with a focus on the research and development of TCM-based health products such as health supplements, foods for special medical purposes, functional cosmetics, and daily chemical products.”

Therefore, driven by a series of policies, the traditional Chinese medicine (TCM) big health industry has ushered in vigorous development. Taking TCM health supplements as an example, the market size of TCM health supplements in China reached RMB 97.45 billion in 2019. Shang Li, Director of the China International Service Trade Promotion Center for Traditional Chinese Medicine, projects that the market size of TCM nutritional supplements will reach RMB 182.57 billion by 2027.

Driven by the vast market size and immense growth potential, Hangzhou Ganzhicao Technology has expanded into the field of TCM-based general health products, launching the “Ganzhi Life” brand. In collaboration with leading research institutions and renowned medical experts, the company jointly develops traditional Chinese medicine health and wellness products.

To date, Ganzhicao Life has launched dozens of TCM-based general health products for both internal and external use, covering functional teas, traditional herbal pastes, healthy snacks, ready-to-eat tonics, and personal care patches. Among these, its Liwu Hawthorn Strips have achieved cumulative online sales of over 1 million packs, ranking among the top sellers on multiple Douyin charts. Looking ahead, Ganzhicao Life plans to continue introducing specialized products tailored to the nine TCM constitutional types. Through brand revitalization and the integration of digital technologies, the company aims to enhance user experience and provide C-end consumers with comprehensive TCM health products and services throughout their entire life cycle.

Meanwhile, Hangzhou Ganzhicao Technology has also launched the Ganzhi Huiyang Platform, which aims to popularize traditional Chinese medicine (TCM) wellness knowledge—such as lifestyle adjustments, medicinal diet therapy, and meridian and acupoint massage—based on the 24 solar terms, thereby helping users regulate their bodies and lead healthy lives.

Naturally, underpinning these advanced services is Hangzhou Ganzhicao Technology’s foundational consumer-facing business. Through the Ganzhicao Doctor App (patient version), patients can access services such as health consultations, online follow-up visits, and traditional Chinese medicine (TCM) delivery. This means that, on the consumer side, Hangzhou Ganzhicao Technology provides users with a comprehensive online-to-offline service chain covering both disease management and health wellness—ranging from health education and consultations to online follow-up visits and the purchase of TCM and TCM-related health products. This approach embodies the company’s strategic framework of “from online to offline, from disease to health.”

Looking ahead, Hangzhou Ganzhicao Technology will continue to deepen its presence in internet-based TCM healthcare and TCM industry chain services, while placing strategic emphasis on the TCM general health product sector. By collaborating with research institutions, experts, and scholars, the company is committed to providing consumer-end users with a wider range of high-quality TCM health products, thereby actively contributing to the implementation of the “Healthy China 2030” initiative.