Abstract: In recent years, with the increasing demand for medicinal materials, the medicinal materials market has a broad prospect.Shangri-La city is named as the ‘Hometown of Medicinal Materials’,which has an innate natural advantage in the production of Chinese medicinal materials.With the development of the country and the government′s attention to the traditional Chinese medicine industry, the planting area and output of Shangri-La are gradually increasing.However, due to improper management, blind seed collection, backward processing and other reasons, it is still facing great challenges to establish a foothold in the Chinese herbal medicine market, in order to increase the proportion of Shangri-La city in the Chinese herbal medicine market, expand the local Chinese herbal medicine industry and develop the economy, this study introduced the current situation of Shangri-La Chinese herbal medicine industry, analyzed it with SWOT method, and expounded its advantages, disadvantages, opportunities and challenges in the Chinese herbal medicine market.