China’s luxury TCM bubble deflates as firms pivot to anti‑aging and tonics

Market correction after a decade of price inflation

Pien Tze Huang (片仔羹) and Dong’e Ejiao (东阿阿胶) — once emblematic of China’s luxury traditional Chinese medicine (TCM) craze — are now the visible casualties of a market correction. Pien Tze Huang’s 2025 first three quarters results showed operating revenue of RMB 7.44 billion and net profit of RMB 2.13 billion, declines of 11.9% and 20.7% year‑on‑year respectively; it has been reported that this is the company’s weakest performance since 2006. Share prices tell the same story: the market value that peaked near RMB 300 billion in 2021 has shrunk by more than 60% to about RMB 101.1 billion by February 2026.

Why the abrupt turn? Partly it was self‑inflicted. For years producers leaned on repeated price hikes justified by scarce raw materials — natural musk, bezoar, donkey hide — while distributors hoarded stock hoping for further gains. It has been reported that such a tacit “closed loop” between makers and channels amplified speculative demand. Now terminal demand has cooled, inventories have swollen (Pien Tze Huang carried about RMB 6.16 billion of inventory with inventory days jumping to 330.6), and some high‑priced TCM products have even been adjusted out of reimbursement lists as insurance payment controls tighten.

From ritual gift to mass market: the pivot to anti‑aging and tonics

With the “medicinal luxury” model under pressure, Chinese drugmakers are racing into anti‑aging and tonic segments aimed at a rapidly ageing population. China had roughly 323 million people aged 60-plus at the end of 2025, creating a large market for supplements, OTC tonic medicines and fortified foods. The shift is visible across firms: sales declines for flagship products are mirrored by new product launches and marketing pushes into “滋补” (tonic) and “抗衰” (anti‑aging) claims.

Not all pivots are winning trust. Kelun Pharmaceutical (科伦药业) sparked controversy when its 75‑year‑old chairman fronted promotions for an anti‑aging ergothioneine capsule in mid‑2025; it has been reported that prominent scientists publicly questioned the evidence base and accused the campaign of exaggerated claims. Regulators and insurers tightening reimbursement, together with more sceptical consumers, mean companies will need stronger clinical data and clearer positioning if anti‑aging is to replace the old price‑inflation playbook.

What it means for investors and consumers

For Western readers: this is less a cultural fad than a market mechanics story. A decade of price inflation backed by perceived scarcity, gift‑giving rituals and speculative hoarding created fragile pricing power. As that imploded, the winners will be firms that can demonstrate sustained end‑user demand and regulatory‑compliant claims, not those solely reliant on marketing, rarity and repeated markups. Who will credibly translate China’s demographic tailwind into honest, scalable products? That is the industry’s next test.