In the southern foothills of the Daba Mountains, at the border of Hubei and Chongqing, a local herbal health brand called "Youyoucao" is quietly staging a "reverse breakout." While most regional enterprises are still anxious about traffic, the headquarters of Youyoucao Eyu has turned raw materials like mugwort and Gynostemma pentaphyllum from deep in the mountains into bestsellers on Tmall, JD.com, and even Southeast Asian e-commerce platforms, thanks to a self-developed industrial internet strategy. Behind this lies a vivid example of a traditional agricultural enterprise transforming into a digital service provider.
"Last year, our online revenue surpassed offline channels for the first time, accounting for 62% of total revenue," revealed Zhang Mingyuan, CEO of Youyoucao Eyu, at a recent industry closed-door meeting. Founded in 2016, the company began as a small workshop processing mugwort sticks at the junction of Hubei and Chongqing. The turning point came in 2020—the health consumption demand spurred by the pandemic made Youyoucao realize that if it didn't actively connect to the internet, it would remain trapped in regional wholesale markets.
Youyoucao's internet development path did not follow the common model of "burning cash on traffic." Instead, they chose a more arduous but solid route: building their own traceability system. Every batch of mugwort, from planting to harvesting, storage to finished product, is recorded on the blockchain. Consumers can scan a QR code to see the origin of the raw materials, processing time, and even the air quality on that day. This transparency strategy quickly built a reputation in an e-commerce ecosystem where trust is scarce. During the 2022 "Double 11" shopping festival, Youyoucao Eyu's flagship store broke into the top three in its category on the platform, driven solely by its "traceable mugwort patch" product.
Even more noteworthy is its digital transformation of "people." Youyoucao trained over 3,000 "rural health livestreamers" across more than 200 administrative villages in Hubei and Chongqing. Most of these livestreamers are left-behind women or returning young people. They broadcast in local dialects and record the mugwort harvesting process in short videos, creating a unique "earthy" trust economy. "City dwellers are tired of polished livestreams; they find the authenticity of the field more convincing," said Chen Xi, deputy general manager in charge of content operations. This "distributed livestreaming + centralized supply chain" model has allowed Youyoucao to achieve an average of 2 million livestreaming sessions per month, almost entirely without top-tier influencers.
Of course, Youyoucao's internet journey has not been without setbacks. In early 2023, a surge in orders caused the logistics system to collapse, leading to massive spoilage of fresh herbal patches due to backlogs. This pushed the monthly return rate to a staggering 18%. The crisis forced the company to launch an intelligent order-sorting system and establish deep cooperation with SF Express and JD Logistics, building a new cold-chain transit warehouse at the Hubei-Chongqing border. "The internet isn't just about selling goods on the front end; digitalization of the back end can make or break you," Zhang Mingyuan repeatedly emphasized during post-mortem meetings.
Today, Youyoucao Eyu's internet footprint has extended from pure e-commerce retail to B2B services. It launched a "Herbal Raw Materials SaaS Platform," providing one-stop services—including raw material procurement, quality inspection reports, and logistics coordination—to over 300 small and medium-sized health brands nationwide. In the first quarter of 2024, revenue from this SaaS platform accounted for 25% of the company's total revenue, becoming its second growth curve.
From deep mountain meadows to the digital cloud, the story of Youyoucao Eyu reflects a typical path of internet transformation for China's regional specialty enterprises: not blindly chasing traffic myths, but deeply cultivating supply chain digitalization, and using transparency and trust to rebuild the relationship between people, goods, and venues. As more and more "Youyoucaos" learn to tell rural stories in the language of the internet, a more vivid connection is forged between China's "sinking" and "upward" consumer markets.