The Picture Of Health

Combining traditional Chinese medicine with modern marketing, Yunnan Baiyao is building a major pharmaceutical company

- Michael Schuman & Jane Ho

The aerosol cans rolling along an assembly line at a Yunnan Baiyao factory in southwest China tell you everything you need to know about the health care company’s unusual prescription for success. The process of filling, testing and packing the cans is so automated that the few people involved do no more than haul the boxes off the end of the conveyer belt. Yet the stuff inside harks back to a time before factories even existed. The pain-relieving concoction is rooted in ancient Chinese medical practices. “Combine Chinese traditional medicine with the life of modern people and convenience of use,” says Yin Pinyao, Yunnan Baiyao’s austere, bespectacled president. “That is the way we innovate.”

That combination—the ultramodern with the extremely old-fashioned—has transformed Yunnan Baiyao Group into one of the unlikeliest rising stars of Chinese business. Over the last five years, its revenue doubled to $3.4 billion in 2016, while net profits did even better, increasing by 140 percent to $440 million. The market capitalisation of the Shenzhen-listed company has surged as well—by two and a half times since the end of 2011 to more than $13 billion. Such vitality has landed Yunnan Baiyao on Forbes Asia’s Fabulous 50 list of the region’s best public companies for the second time; it also made the list in 2015.