Mugwort, or wormwood, has been used in traditional Chinese medicine for centuries to treat everything from diarrhea to breech births. Much of the mugwort products are produced in Henan province in the city of Nanyang, which accounts for more than 70% of the market share.
These days, the city’s mugwort manufacturers are going direct to consumers through e-commerce platforms like Pinduoduo, boosting their sales and receiving valuable feedback from customers that go into improving the products.
Song Qiuyan, 32, operates a factory producing mugwort pain relief patches on the outskirts of Nanyang. The 10,000-square-meter factory came into operation in 2006 and currently employs more than 100 workers. In November 2019, Song began to explore e-commerce options and opened a second store on Pinduoduo in March.
With the quickening pace of life, especially in the big cities, consumers are after more convenient ways of using mugwort. Younger, white-collar workers, for instance, prefer easy-to-use mugwort patches rather than the traditional medicinal ointment or burning dried mugwort shaped like joss sticks.
Such feedback is helping manufacturers like Song to tailor their products and keep up with consumer preferences. The mugwort industry is one of the many industries that are undergoing a digital transformation with the consumer-to-manufacturer (C2M) model pioneered by Pinduoduo.
By channeling customer insights to manufacturers who would otherwise have struggled to understand the market, C2M is enabling producers to create brands and products that are more suitable for customers. By cutting out layers of distributors and supplying directly to end-consumers, both operating costs and prices are kept low while ensuring profit.
Pinduoduo hosted nearly 3,500 stores from Nanyang in 2020, a doubling from the year before. The number of orders and sales have also more than doubled. E-commerce platforms like Pinduoduo are also helping to formulate group standards for mugwort products to boost product safety and quality for consumers.
"When we make a product, especially for health care, we have to make it with our heart, only then will consumers continue to buy from us,” said Song, whose grandmother uses the wormwood patches for her rheumatoid arthritis. “I am also very happy to allow people from my hometown to have a job, earn money, and take care of the family without leaving their homes.”