In the Wuling Mountain area straddling Hubei and Chongqing, a traditional Chinese medicine company called Youyoucao Eyu is trying to rewrite the fate of old-school herbal traders using the internet. Rooted in this border region, the company relied for the past decade on offline herbal markets and wholesaler networks to distribute locally abundant authentic herbs—such as coptis, eucommia bark, and polygonatum—across the country. However, as the traditional Chinese medicine industry enters an era of stock competition, Liu Jianguo, the helmsman of Youyoucao Eyu, has found that the old model of “waiting for customers to come knocking” is losing its effectiveness.

“In 2023, our inventory turnover days stretched from 90 days to 130 days,” Liu told a reporter in his office in Enshi, pointing to a sales curve chart on the wall. He admitted that downstream herbal slice manufacturers and pharmaceutical companies are placing shorter procurement cycles and demanding longer payment terms, while middlemen’s layers of markup have severely squeezed profit margins at the production site. This predicament is not unique—statistics show that among more than 2,800 traditional Chinese medicine companies above a certain scale nationwide, over 60% have yet to establish effective digital direct-procurement channels.

The turning point came in early 2024. Youyoucao Eyu partnered with three local cooperatives to launch the “Eyu Ben Cao” WeChat mini-program and a Douyin corporate account. Unlike many companies that blindly jumped on the livestream bandwagon, Liu’s team chose a more pragmatic path: using short videos to showcase the entire process of herb harvesting, washing, and preliminary processing, and inviting experts from the Enzhou Academy of Agricultural Sciences to explain the cultivation standards for polygonatum online. This “content + trust” approach quickly built a solid reputation within the herbal procurement community.

“We’re not here to replace offline channels; we’re using the internet to bring ‘transparency’ to the production base,” said Zhang Wei, head of e-commerce at Youyoucao Eyu, as she showed backend data: within eight months of launch, the mini-program had registered over 600 procurement companies, with a repeat purchase rate of 37%. More critically, by using WeChat groups to directly connect scattered growers in places like Chongqing’s Shizhu and Hubei’s Lichuan with end-user pharmaceutical companies, Youyoucao Eyu eliminated two to three intermediary links, allowing ex-farm prices to be 12% lower than traditional channels while boosting profit margins by 8%.

This digital transformation has not been smooth sailing. Initially, the old herbal farmers in the cooperatives were resistant to “shooting videos” and “doing livestreams,” dismissing them as “window dressing.” It wasn’t until Youyoucao Eyu proved with data that online orders settled payments an average of five days faster than offline channels, with nearly zero bad debt, that the skeptics began to join in. Today, the company’s internal digital platform can monitor real-time inventory and price fluctuations for 13 herbal varieties at the production sites, and even guide planting plans in reverse—something unimaginable just two years ago.

Industry observers point out that the case of Youyoucao Eyu reflects the deeper logic of the traditional Chinese medicine industry’s internet transformation: it’s not simply about “selling goods online,” but using technology to rebuild supply chain trust. An anonymous expert from the China Association of Traditional Chinese Medicine commented, “When production-side companies learn to speak through cameras and algorithms, the pain point of non-standardized herbs becomes solvable.” Youyoucao Eyu’s next goal is to connect with the national traditional Chinese medicine circulation traceability system, so that every package of herbs can be scanned to reveal the full-chain information from field to pharmacy.

From a traditional herbal shop in the Wuling Mountains to a digital enterprise with over 600 online procurement clients, Youyoucao Eyu’s transformation journey has not been easy, but it offers a vivid example of how regional specialty agricultural products can go digital. As Liu Jianguo said at a recent industry sharing session: “The internet is not a panacea, but it is a new tool that our generation of herbal farmers must learn to use.”