Traditional Chinese medicine (TCM) is a comprehensive medical system that encompasses a wide range of theories and methodologies, including herbal medicine, acupuncture, cupping therapy, massage and dietary therapy.
In addition to enjoying a rich culture and history, TCM is also a billion-dollar market that offers some surprising opportunities for Western medical and consumer brands.
What is TCM and how big is the market?
TCM is an alternative medicine practice that combines a range of remedies and physical treatments, with a history dating back more than 2,000 years.
Among the many kinds of TCM treatments on offer, herbal medicine is both popular and accessible. Pharmacies and online shops sell a wide range of prepared herbal remedies – some prescription only, some over-the-counter – that come in forms such as drops, tablets or granules, many of which are mixed with water to form a drink or soup.
In terms of physical therapies, acupuncture, a technique involving inserting thin needles into specific body points to balance energy flows, is widely practised, as is cupping therapy, characterised by creating suction on the skin to improve blood circulation and promote healing, which has also gained international popularity (especially since telltale cupping marks have been seen on the backs of professional athletes like Michael Phelps and Hollywood stars like Gwyneth Paltrow).
TCM doctors may also prescribe specific diets, such as avoiding meat or spicy food.
TCM coexists with Western medicine in China, complementing and contrasting with it. In hospitals across China, TCM is offered alongside Western medical services, and patients often combine both types of treatments to avail comprehensive healthcare, since TCM is said to be grounded in the principles of balance and identifying the root causes of conditions rather than treating the symptoms.
Due to this broad range of treatment options and cultural backdrop, the TCM market in China is huge. According to some reports, in 2019, the total volume of TCM commodity imports and exports in China was worth US$ 6.174 billion (£5.028 billion). TCM products are thought to account for around 40% of drug sales in China.
Moreover, in recent years, it has experienced unprecedented growth, fuelled by an ageing population, health fears around the Covid-19 pandemic, and rising support for Chinese culture and made-in-China products (often referred to as the ‘guochao’ movement).
The most valuable company in the TCM market is Yunnan Baiyao, which has a market cap of over RMB 91.42 billion (£10.2 billion). Other major companies include Beijing Tongrentang and Guangzhou Baiyunshan.
TCM Market challenges
Despite its size, the TCM market is not without its challenges. Regulatory hurdles, quality control issues and international scepticism are significant impediments. Standardising TCM practices and products for quality and safety assurance is a primary concern for the Chinese government. Furthermore, scientific validation of TCM principles and methods, compatibility with Western medicine protocols, and global acceptance and integration are ongoing challenges.
How Western brands can navigate the TCM market
A market that is so inherently entwined with Chinese culture and history may seem like one that is difficult to access for Western brands. But for those that understand its cultural, historical, and social intricacies, the opportunities are there.
In recent years, collaborative approaches that respect and integrate TCM’s essence while introducing trendy products or formats have proven very popular with Chinese consumers.
In sum, any Western brand considering the TCM market needs to consider the following principles:
- Integration: Combining Western technologies and TCM principles to offer hybrid solutions that actually meet patient needs.
- Education: Educating the market on the benefits of Western medicine, while being receptive to the values and benefits of TCM.
- Partnership: Collaborating with established TCM brands to co-create products and services that are culturally sensitive and globally competitive.
- Innovation: Infusing Western medicine with innovations that are compatible with TCM’s holistic, personalised, and preventive focus.
The TCM market in China is a dynamic and evolving entity. Western brands venturing into China’s medical market have the opportunity to create uniquely cross-cultural, multi-dimensional medical solutions by approaching TCM with respect and openness. As the health concerns of China’s ageing population grow, there will be opportunities for Western brands to penetrate this market.
