Richard Eu’s family has been boiling up seahorse, deer’s tail and caterpillar fungus for 138 years, since his great-grandfather started selling traditional Chinese medicine to tin miners trying to wean themselves off opium in what is now Malaysia.
But with younger consumers much more demanding than their forebears, his company — Eu Yan Sang — is stepping up efforts to modernise traditional medicines, from better manufacturing processes to snazzier packaging and easier-to-consume capsules, rather than the cook-at-home concoctions of old.
“Traditionally our customers, over the last 20-odd years, would have been young mothers and older folks but in recent years we see an interest from the millennial market,” said Mr Eu in an interview at the company’s flagship outlet in Hong Kong, which looks more like a Walgreens or Boots than the Harry Potter-like traditional outlets that predominate elsewhere in the region.
“[Traditional medicine] is time-consuming, and nowadays the young people don’t have time to do all this so it’s much easier to pop a capsule.”
Traditional medicine, which uses herbs and animal products to remove blockages in the body’s flow of energy, or Qi, is big business in China, Hong Kong and other places with sizeable Chinese populations such as Singapore and Malaysia.
The market for packaged products in mainland China grew from $6.4bn in 2011 to $11.5bn last year, while the Hong Kong market expanded from $402m to $503m over the same period, according to Euromonitor, a market research company.
Companies such as Eu Yan Sang and rivals such as Hong Kong-listed Beijing Tong Ren Tang and China Traditional Chinese Medicine Holdings, a subsidiary of Chinese state-owned pharmaceutical group Sinopharm, are intensifying their efforts to appeal to young consumers.
In the past, customers wanting a calming tonic to help their babies sleep had to boil up a none-too-appetising mix of insects and herbs for an hour. Now, Eu Yan Sang, which operates 190 stores across China, Hong Kong, Singapore and Malaysia and distributes further afield, sells the remedy in tea-bag form, which takes just two minutes to prepare.
Manufacturers have started to make other popular products such as caterpillar fungus, which is meant to promote vitality, and snake bile, meant to be good for the lungs and liver, available in more convenient forms, such as capsules and powders.
They are also expanding into new markets beyond Asia, from Australia to the US, as they try to capitalise on the growing interest in natural products and alternative lifestyles.
Tong Ren Tang, which is known for its Lingzhi mushroom powder that is used to treat insomnia and asthma, opened four stores in the US and Canada last year, adding to footholds in the Middle East and eastern Europe.
Eu Yan Sang has a joint venture in Australia that operates a chain of health food stores called Healthy Life.
Traditional manufacturers are trying to improve their production and quality assurance processes to persuade those deterred by the many scandals that have afflicted the industry over the years, especially in China.
“In every industry there are cheats and they have damaged the reputation of TCM,” said Mr Eu. “The modern consumer demands to have a certain quality level and paramount, of course, is safety.”
Eu Yan Sang is intensifying its modernisation programme after the formerly Singapore-listed company was taken private last year by a consortium including Mr Eu, the company’s chairman, and Temasek, the Singapore state investment fund, in a deal that valued its equity at S$269m ($195m).
At its factory in Yuen Long in the far north of Hong Kong, it puts raw ingredients through a testing and extraction process that is overseen by chemists using laboratory equipment similar to that used in the pharmaceutical industry.
Justin Wu, a professor at the Chinese University of Hong Kong who is trying to integrate traditional medicine into modern medicine, says new technologies are helping the industry develop a better understanding of TCM.
“For example, we have managed to extract active compounds from Chinese herbs and also have a better understanding of the role of acupuncture through brain imaging,” he said.
But he argues that it is misguided to try to replicate the sort of rigorous testing used in the pharmaceutical industry, such as randomised clinical trials.
“We can’t use the benchmark of oranges to measure apples,” he said. “Some of the laws that regulate western medicine may not be applicable to Chinese medicine.”
Meanwhile, traditional practitioners such as Alan Poon, who are still big players in this heavily fragmented industry, believe that by standardising traditional treatments into pills and capsules, companies risk undermining the essence of natural balance and personalisation.
“Nowadays pills are popular because people work long hours,” he said at his old-world store in Hong Kong, where he still uses an abacus to calculate medical formulas and invoices. “But it is easier for these ingredients to be absorbed if they are boiled in the traditional way.”
Additional reporting by Nicolle Liu and Tom Griggs