In recent years, health-oriented and personalized dietary trends, exemplified by new-style tea beverages, have rapidly gained popularity among young consumers. Building on this foundation, with an increasing awareness of health and wellness, traditional Chinese medicine (TCM) health drinks, with their unique health philosophies and rich cultural backgrounds, have gradually won recognition among younger demographics.

Reports from the China Securities Journal indicate that it’s not just beverage products; under consumer demand, renowned TCM brands such as Tong Han Chun Tang, Tong Ren Tang, Lei Yun Shang, and Hu Qing Yu Tang are actively launching new products featuring TCM ingredients, including medicinal dishes, herbal scents, and skincare items, tailored to meet the genuine needs of younger consumers. Experts believe that as these brands expand their product lines and target consumption scenarios, it will help rejuvenate the long-standing TCM brands.

Targeting Youth to Enhance Product Offerings

Historically, traditional TCM shops have not been particularly attractive to young consumers, leading to a gap in consumption and a loss of brand image. Industry insiders assert that rejuvenating the brand is the key to long-term success for these time-honored brands. To better meet the needs of younger users, many classic TCM pharmacies are transforming to adopt a “youthful” approach, infusing their products with fresh vitality.

In Shanghai’s Yuyuan shopping district, the ancient and dignified facade of Tong Han Chun Tang stands out. Upon entering the store, one can see an interior layout specifically designed to resonate with young consumers. Reportedly, the store underwent a major renovation and re-opened in early 2021, aiming to create a fresh concept experience in TCM culture.

Inside the Tong Han Chun Tang store, young consumers’ favorite tea beverage section is prominently situated, offering a series of herbal teas that blend Eastern and Western wellness concepts. The foot traffic suggests that even on weekdays, many customers are purchasing these tea drinks. Industry insiders believe that Tong Han Chun Tang has successfully turned the low-frequency concept of TCM into a high-frequency wellness consumption experience, thus maintaining brand continuity and engaging younger consumers.

The store also features aromatic candles and scented sachets made from a blend of essential oils and traditional herbal components, which are highly sought after by young customers. Some young consumers mentioned that two previously launched sachet products had sold out in some locations, and they have long been eager for the newly introduced aromatic products, promising to keep an eye on future releases.

Not just Tong Han Chun Tang, many other time-honored TCM brands are targeting this market by enhancing their product offerings for young consumers through either in-house development or collaborations. For instance, Hu Qing Yu Tang has established its own beauty brand, “Qing Yu Beauty,” which includes skincare, makeup, and personal care products, with skincare items featuring TCM extracts like masks, lotions, and serums. On Hu Qing Yu Tang’s official mini-app, it was noted that a mushroom extract eye cream had already sold out.

“We strive to understand young consumer trends and continually explore a variety of products, helping many young consumers learn about traditional services like moxibustion and massage. The proportion of young people, especially those born in the '90s, seeking TCM consultation is steadily increasing,” said the store manager. More and more young people are beginning to hope to use TCM methods to systematically regulate their health under the guidance of professional TCM practitioners.

“In this process, depending on the condition, a professional TCM practitioner will provide guidance on whether medications, external treatments, or dietary adjustments are needed. We hope to provide young people with a holistic solution rather than just addressing individual issues,” the manager stated.

Actively Developing TCM Wellness Products

Industry insiders believe that while TCM companies possess significant professional backgrounds and resource advantages in the pharmaceutical field, they must also find new growth opportunities in the face of market uncertainties and competitive pressures. The burgeoning tea beverage market presents a promising entry point.

Research by iiMedia Consulting shows that more consumers are beginning to pay attention to and try TCM tea drinks, with a growing intention to purchase. Approximately 75.47% of consumers expressed a greater willingness to buy TCM tea drinks over traditional ones. Furthermore, over 70% of consumers are satisfied with the functional effects of TCM tea beverages.

Although the overall frequency of TCM tea consumption among Chinese consumers is lower than for new-style milk tea and fruit tea, the increasing awareness of health, product innovation, and the integration of online and offline experiences are gradually boosting the popularity of TCM tea drinks, with rising consumption frequency and spending trends.

In response to this trend, several publicly listed companies are actively upgrading their businesses around TCM wellness. For example, Tong Ren Tang has launched a new retail brand called “Zhi Ma Health,” offering a range of “wellness coffees” including goji latte and rose latte. Dong E Ejiao has partnered with Nayuki Tea, introducing products like “Nayuki Dong E Ejiao Milk Tea.”

At “Zhenyuan Health Flagship Store” mini-app under Zhejiang Zhenyuan, a variety of products such as wellness teas, health pastes, wellness wines, and medicinal baths are available. Last year, the company rolled out several wellness products such as pear pastes and herbal teas that attracted a lot of consumer interest.

However, iiMedia analysts have noted that the current market competition is exceptionally fierce, leading to price wars, marketing wars, and channel wars. Additionally, the issue of product homogenization is severe, especially among popular items with noticeable similarities across brands.

Experts believe that to promote healthy industry development, TCM companies need to continuously improve product quality and enhance brand construction while the government and relevant institutions strengthen supervision to provide consumers with safer and more reliable products.

Continuously Building a Direct Supply Model from Source Areas

To consistently provide high-quality innovative products, ensuring the quality of “authentic medicines” is essential.

In interviews, it was noted that, for instance, wild ginseng can only be found in specific production areas that yield high-quality medicinal materials, affecting the innovation and upgrading of related products.

“To let consumers better experience the quality of ‘authentic medicines,’ last year Tong Han Chun Tang sourced wild ginseng from Huanren, Liaoning, which is its first national standardized direct supply base for wild ginseng, aiming to control the quality from the source,” said a representative from Tong Han Chun Tang. The company is one of the drafting units for national standards on wild ginseng and Shanghai’s wild ginseng group standard and is committed to offering top-quality wild ginseng with adequate aging, high nutrition, and without contamination.

According to national standards, ginseng grown naturally in forests for over 15 years can be called wild ginseng. In Liaoning’s wild ginseng base, ginseng is allowed to grow for at least 18 years without fertilizers or pesticides, maintaining its authentic wild characteristics.

This year, Tong Han Chun Tang has also established a 400-acre GAP-certified organic Dendrobium base in Gengma County, Yunnan, replicating the natural growing environment of Dendrobium to ensure no artificial substances are used during production and processing, thus guaranteeing traceability of each Dendrobium plant. Additionally, they have established bases for sea cucumber and cordyceps in Dalian, Liaoning, and Tibet, adhering to local cultivation practices and timely harvesting to ensure product quality.

Moreover, modern technology is employed for complete traceability. The wild ginseng base in Liaoning has a series of intelligent devices and platforms forming a “smart ecological traceability monitoring system.” Similarly, using the successful experience from the wild ginseng base, automated weather stations have been set up in the Dendrobium base to monitor the semi-wild growth environment.

The representative from Tong Han Chun Tang mentioned that they will continue to set up more upstream bases for comprehensive supply chain upgrades and traceable management of core raw materials, ensuring authentic quality and establishing industry benchmarks.

In fact, comprehensive supply chain upgrades have become a consensus in the industry. To further strengthen control over raw medicinal materials, Lei Yun Shang is digging deeper into the advantages of Huai Shan resources in Jiaozuo and is establishing a planting base in Huai Shan’s production area. For anti-counterfeiting and traceability, Lei Yun Shang utilizes NFC anti-counterfeiting labels, ensuring each product has a unique “identity card” reflecting its origin, production date, shelf life, and more.

Lei Yun Shang stated that it adheres to a comprehensive traceability system for TCM materials within its quality assurance framework, continually expanding the scale and variety of its raw medicinal material planting bases and further supporting the high-quality development of the TCM industry through scientifically rigorous traceability systems.

Source：https://finance.eastmoney.com/a/202409133182327121.html