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　　 　　 Open any medicine cabinet in America or other Western countries and an assortment of bottles is sure to fall out. Tylenol and pain relievers, sleep aids, syrups to battle the common cold and multivitamins will be well stocked. What won’t be are the herbal and natural supplements of traditional Chinese medicine (TCM).
　　That may be changing as TCM suppliers, like Tongrentang, expand operations abroad, and, more importantly, as foreigners begin to embrace this age-old medicinal style.
　　A case in point is Simon Coburn, a 20-year-old student from Sydney, Australia. Coburn, who has been studying Chinese in Beijing for two years and enjoys traveling, never embarks on an excursion around China without first making sure he has a few packets of Yunnan Baiyao bandages and Tongrentang Banlangen Granules to treat colds.
　　“I learned about TCM from my Chinese roommates, and quickly got used to them because they cause less side-effects than Western medicine,” said Coburn.
　　Since becoming a fan of TCM, Coburn has also introduced the medicine to his parents. “Nowadays, my father regularly goes to a Tongrentang store in Sydney for acupuncture to cure his neck pains,” said Coburn.
　　Old Tongrentang
　　Tongrentang is the oldest and largest producer of TCM in the country and has become a household name in China. The Coburn’s experience with TCM is also a vivid reflection of how this centuries-old company plans to extend its reach beyond China’s borders.
　　The appeal of TCM is in its treatment. While Western medicine treats symptoms, TCM focuses on addressing the underlying causes of illness. Tongrentang, in particular, outshines competitors by producing more than 1,000 TCM products.
　　While Tongrentang dominates the domestic market, its overseas forays have been no less aggressive.
　　In 1993, Tongrentang set up a joint venture in Hong Kong. The financial strength, logistics efficiency and trade freedom of the metropolis significantly helped the company step onto the world stage.
　　Despite the sweeping financial crisis in 2008, overseas business has maintained double-digit growth rates annually in both revenues and profits during the past decade, according to Ding Yongling, Vice General Manager of Tongrentang. Last year, Tongrentang exported $33.92 million of TCM products, accounting for nearly 20 percent of the country’s total and making it the largest TCM exporter of China.
　　In its latest move, it opened a new store in Dubai, the United Arab Emirates, the first one in the Middle East.
　　“The new store marks a remarkable step toward overseas expansion, though we still have a long way to go before building a global market foothold,” Ding said. “Our goal is to own at least 100 overseas stores by 2015, and make TCM more accepted by global consumers.”
　　Standard and flexibility
　　Tongrentang’s first footsteps outside China were slow and cautious. Before looking to the West, it first approached Southeast Asia where overseas Chinese provided a solid customer base.
　　In a move to boost its brand recognition, the time-honored enterprise standardized its overseas operation model. Now, whether in Hong Kong, Singapore, or Seoul, Tongrentang drugstores are located on the most bustling commercial streets. All drugstores are furnished in classic Chinese style, with wooden shelves and red lanterns hanging at the entrance. In addition, veteran physicians are on hand to consult customers and give herbal prescriptions.
　　“When our first store in Hong Kong opened in 1993, customers lined up to get our medicine,”Ding said. “The rapid growth in Singapore was also beyond our expectation. We believed the market would be saturated with just one store in such a tiny nation, but now we have five stores in Singapore.”
　　But Tongrentang’s outbound inroads were not without barriers. A lack of market access was the biggest one since TCM products are regulated in foreign countries to varying degrees due to ingredients such as heavy metal and some natural herbs.
　　Singapore, for instance, prohibits the use of coptis chinensis, an ingredient in Dahuoluo pills that treats rheumatism and strokes. In an effort to enter the Singaporean market, Tongrentang had to restructure components of the pills.
　　“Every country has its own unique standard for regulating TCM, and all we can do is to tailormake our products,” said Ding. “That strategy has, however, led to an increase in costs.”
　　Cultural influence
　　While Tongrentang fared well in Asia, its journey into Western markets has been a bumpy one.
　　In the United States, the Food and Drug Administration recognizes some TCM products as “dietary supplement” while Australia only acknowledges some as healthcare products. That means Tongrentang products are not covered by medical insurance programs, posing an acute impediment to its acceptance and accessibility.
　　On top of those stumbling blocks came the EU’s ban on TCM. In May 2011, all unauthorized TCM products were pulled from shelves in the EU. Under a directive announced in 2004, a seven-year grace period was given to manufacturers of herbal medicines to register their brands. No Chinese TCM producers were able to obtain a license due to high costs and difficulties meeting the EU’s stringent criteria.
　　As the world’s biggest herbal medicine market, the EU accounts for more than 40 percent of the world’s herbal medicine sales.
　　“Tongrentang was less affected because of its limited presence in the EU,” said Ding.
　　Despite the setbacks, Tongrentang remains committed to the European market, she added. “The next step is to reinforce consumer education about TCM and lay a solid groundwork for future development.”
　　The real dilemma is that Chinese people have been using TCM for thousands of years, but most Westerners know next to nothing about this ancient medicine, said Ding.
　　Efforts to boost global recognition of TCM are already underway. Tongrentang has spared no effort to make its products and packaging more user-friendly and has added detailed instructions in local languages. But what set Tongrentang apart from competitors were attempts to lure customers with its cultural attractiveness.
　　Ding said Tongrentang is making preparations to launch a Chinese culture center in Warsaw, capital of Poland. The center plans to host exhibitions to display traditional elements of China’s culture, such as TCM, paper-cutting, tea and martial arts.
　　In another move, the Tongrentang store in Dubai has joined hands with the Confucius Institute to hold seminars and lectures about TCM. In Australia, the company invited local primary school students to visit TCM stores and hear stories about the history of Tongrentang.
　　“Those stiff efforts are part of our deep commitment to sparking customer interest with the charm of Chinese culture and increasing their understanding about TCM,” said Ding.
　　Daunting challenges
　　For Chinese firms eyeing global markets, lack of experience can undermine cross-border operations. Managing an overseas workforce and dealing with local unions also proved a challenge that Chinese companies did not anticipate and have been unable to handle. Tongrentang is no exception.
　　“It takes only three months for Tongrentang to open a new store in China. But outside the country, it takes at least half a year,” said Ding.
　　The cultural sensitivity needed to establish a global footprint can not be achieved overnight. But when it comes to decision-making in joint ventures, Tongrentang has tried to have a greater say. The company has a 51-percent stake in joint ventures in Malaysia, Indonesia and Canada.
　　“Maintaining a majority stake is the only way to ensure that our overseas stores retain the original Tongrentang characteristics, no matter how far away they may be from China,” said Ding.
　　Although it has been cautious, Tongrentang faces looming risks overseas, such as local economic downturns, higher labor costs, fake and counterfeit products, as well as intensifying competition.
　　“With strong brand influence and superior medicine quality, we have confidence to overcome those challenges and become a real global player,” Ding said.

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