There are no disruptive players in the healthcare industry yet.Welcome to the WeChat subscription number of “Sina Technology”: techsina
Text / Han Xinye
Source: Haike Finance (ID: haikecaijing)
In the past two years, the signboard on the east side of Beijing Zhongguancun e World Wealth Center has been renamed three times.
From “e World Wealth Center” to “Songguo Clinic” and “Xiaohe Clinic”, to the soon-to-be-replaced “New Zhongguan Yihe Clinic”, these changes are all related to the domestic Internet company ByteDance.
This generally reflects ByteDance’s recent three important advancements in the big health ecology, and the background of the latest change of the above-mentioned signs is a well-known trend – ByteDance has spent tens of billions to acquire offline high-end Private Women’s and Children’s Hospital Meizhong Yihe.
Such a capital operation of this magnitude can no longer be described by careful testing. It is closer to the methodology that Zhang Yiming, the founder of ByteDance, at least once highly praised – “power to create miracles”.
Haike Finance has learned that, in addition to the changes in the industrial and commercial name and external brand, the original mini-program of Xiaohe Outpatient Clinic, the big health business of ByteDance, has stopped updating on September 26, and was officially offline after October 31. The U.S.-China Yihe Mini Program will be launched at that time.
A large number of details are gradually gathered and clearly point to one point, that is, the big health business of ByteDance is saying goodbye to the stage of individual fighting and entering the acceleration period of resource integration. With the successive splicing and embedding of related business units, a “Byte Health” ecosystem that may be comparable to or even surpass that of Ali Health, JD Health and other commercial organizations is slowly emerging.
ByteDance has never disclosed its big health strategy and progress to the outside world so far. The high probability of Jiguang or Xiaohe’s health reported by the media earlier is not the full picture.
Different from the relatively mature industry leaders such as Ali Health and JD Health, the newly emerging Byte Health has not yet clearly defined itself. However, we can see from its investment, mergers and acquisitions, self-research and other actions that ByteDance is now focusing more on medical services in the field of big health. As far as we can see, ByteDance does not fully hope to use the Internet to transform traditional medical and health care. Instead, it is based on the aforementioned Xiaohe Health and expands both online and offline.
Online, ByteDance is no different from other Internet players, with services such as online consultation, medical science popularization, medical e-commerce, medical appointments, and health information. Offline, ByteDance launched two years ago. It is preparing for offline diagnosis and treatment services, and plans to achieve a closed-loop service through its own hospitals. In addition, it is also involved in pathological testing, clinical recruitment and other links.
In addition to medical services, R&D is also gaining momentum. At present, ByteDance has invested manpower and material resources in new drug R&D and other businesses.
Medical and health care emphasizes professionalism and reputation. It has never been easy for online players to get involved in this field. Although ByteDance has absorbed some knowledgeable players, such as the team from Baidu, and gained certain resources and experience, the real dilemma is still obvious.
The biggest long board of ByteDance is traffic and algorithms, but whether domestic medical and health care is online or offline, the utility of this long board is really limited, not to mention regulatory factors. And how to make its constantly enriching medical and health business realize collaborative transformation within the scope permitted by the policy based on the long board, and even derive more breakthrough forces in addition to Ali Health, JD Health and other friends, this is a pair of Bytes Beating is still a problem.
01
Byte after start
ByteDance’s big health business is generally believed to have started from “pine cones”.
According to the developer information of the App Store, the “Green Pine Fruit” APP (now renamed “Xiaohe Health” APP) was launched on November 7, 2019, hoping to build an online patient community by providing services such as medical record inquiry and online consultation. However, the APP did not make much splash on the market at first, and even few data platforms counted its early downloads. Of course, this is partly because ByteDance did not promote it on a large scale.
A few months after the APP was launched, ByteDance began to prepare for the Songuo Clinic, an offline medical institution. In 2020, Byte Health upgraded for the first time. Since then, the brand names of the online APP and offline medical institutions have evolved from “Songguo” to “Xiaohe”.
ByteDance has worked hard behind this.
Recruiting troops to buy horses, bear the brunt.
It is worth mentioning here that Wu Haifeng, who has Baidu’s resume, and his entrepreneurial team joined as a whole.
Wu Haifeng has worked for Baidu for 13 years. After graduating from Zhejiang University School of Computer Science and obtaining a master’s degree in 2006, he went north to Baidu. In 2017, he was promoted to Baidu’s vice president and head of Baidu’s search division. After Dou was fully responsible for the search for the company’s user products, he turned to search for the company’s commercial products. In May 2019, he left to start a business. Together with Sun Wenyu, a former director-level executive of Baidu, he established an Internet medical company.
According to previous reports from various media such as Wandian, a year later, Wu Haifeng and others were recruited by ByteDance, and Yaoling Ersi was acquired by the latter. Wu was transferred to be the head of the Byte Health Department “Aurora” and reported to Zhang Yiming, Aurora’s business has a unified brand name “Xiaohe Health”.
Wu Haifeng was selected as the person in charge of the big health business of ByteDance, not only because of his experience in Internet medical entrepreneurship, but also because he had been in contact with the medical business during his work at Baidu, and accumulated some third-party service provider resources. When it turns to bytes, some of these service providers also start serving bytes.
Wu Haifeng and other Baidu personnel supported the basic disk of early byte health. “At that time, the executives of Byte did not know much about the health industry.” A former Xiaohe employee told Heike Finance.
Byte has always been stingy in recruiting talents. The above-mentioned employees mentioned one point: Xiao He’s salary was far ahead in the industry, and Byte Health was still a relatively marginal business in the ByteDance system at that time.
Active investment in mergers and acquisitions is another big move of Byte Health.
If you want to quickly form a medical and health map, it is indeed faster to spend money to buy it than to do it yourself. From the completion of the wholly-owned acquisition of “Encyclopedia Famous Doctor” in August 2020 and its name change to “Xiaohe Medical Dictionary”, since then, the system such as One Zero Two Four and Good Mood Internet Hospital belong to this category.
Byte Health once benchmarked the industry leader. Because there are two major traffic portals in the camp, Toutiao and Douyin, coupled with the powerful algorithm blessing of ByteDance, it is not impossible for Byte Health to catch up with leading platforms such as Ali Health and JD Health.
But these alone are not enough. The reason why the aforementioned Xiaohe employees feel that their business department is marginalized is largely because the abundant traffic of ByteDance has not brought explosive growth to Xiaohe, which has been tepid for a long time. Not only that, at present, most domestic Internet medical companies have lost money so far.
The long-term important problem of Internet medical care is that it is easy to provide online services, but it is extremely difficult to open the offline market, especially the diagnosis and treatment of difficult and serious diseases, which must go offline after all.
The extension logic of byte health will be known to more people after 2021. It can be seen that the byte health ecosystem is not only one of Internet medical care, but also comprehensively online and offline. For example, Hongda Airui, Meizhong Yihe, etc. focus on offline, and the aforementioned Good Mood Internet Hospital also has offline diagnosis and treatment business.
At present, the byte health ecology has covered a number of items, including online medical science popularization, digital consultation, consultation appointments, offline clinics and hospitals, as well as drug research and development, drug wholesale and retail, etc., and the puzzles are still increasing.
02
Traffic algorithm access
The new crown epidemic has pushed the domestic health industry forward vigorously.
According to data from iiMedia Research, a research institute, from 2014 to 2021, the overall revenue of China’s big health industry has maintained steady growth. In 2021, the revenue scale will be 8.0 trillion yuan, an increase of 8.1%. The development of the global health industry is basically the same. Considering the scale of China’s economy and the gap with developed countries in the proportion of medical and health expenditure in GDP, the industry still has a lot of room for development.
Ali Health and JD Health are two big banners in the industry. These two companies have been listed in 2014 and 2020 respectively. Although their stock prices have fallen significantly due to multiple factors recently, they still have reference significance. As of the publication of this article by Heike Finance, the market value of Ali Health and JD Health converted into RMB are 46.881 billion yuan and 132.951 billion yuan respectively. The idea of ByteDance should not stop there.
In terms of ByteDance, the layout of big health is also a blue ocean move after the main business encounters the ceiling.
ByteDance’s revenue growth has slowed in recent years. According to previous reports from the Securities Times and other media, on November 18, 2021, the commercialization product department of ByteDance held a general meeting, at which it was disclosed that its domestic advertising revenue had stopped growing in the past six months. Advertising revenue is the main source of ByteDance’s revenue, and its stagnation means that the entire company is stagnant. In terms of business, revenue from Douyin has stopped growing, and another core product, Toutiao, is even on the verge of loss.
At the data level, according to Reuters, ByteDance’s full-year revenue in 2021 is about $58 billion, a year-on-year increase of 70%, and the growth rate has slowed from 111% in 2020. You know, in the years before 2020, ByteDance’s revenue growth rate was more than 200%.
The anxiety of ByteDance can be imagined. Anxiety stems not only from the fact that the trump card business is no longer making great progress, but also from the fact that it is still difficult for the new business to be a big responsibility.
In addition to the continued increase in the Douyin business, ByteDance urgently needs to explore the second growth curve of the company’s development. It can be seen that ByteDance has increased in multiple directions in recent years, including corporate services, entertainment, games, education, e-commerce, finance, etc.
ByteDance had high hopes for education, and it also invested heavily in this regard. However, the double reduction policy came unexpectedly, and byte education, namely vigorous education, became the hardest hit area.
K12 is already a thunder point in the industry, and other education categories have also been affected to varying degrees, and its market space is difficult to compare with K12. The industry has been cleaned up for more than a year, and most domestic online education companies are still exploring the path of transformation. A practitioner in the online education industry recently expressed emotion to Haike Finance that compliance is the overriding factor, so don’t have any illusions.
In addition to education, games and corporate services have attracted much attention. However, although Feishu is quite energetic and has gained many star customers, its number of users still has a huge gap with Dingding and enterprise WeChat, and it is still in the stage of active investment, while the byte game has been accused of combat effectiveness. It is difficult to see Tencent games and NetEase games back, and they are only rich and rich, poaching and buying people with high salaries all the way.
As far as games are concerned, factors such as industry downturn and version number control have challenged the money-burning strategy of byte games. Byte Games has also been shrinking. In the first half of 2022, there have been news of batch layoffs of Byte Games, and some game studios such as Shanghai 101 Game Studio have been disbanded.
Leaving aside the overseas product TikTok, Douyin, whose growth rate is slowing down, can still play, but ByteDance has only one Douyin that can play in China. Adhering to the “traffic + algorithm” weapon, ByteDance has successively entered multiple tracks to try, and the importance of big health has been raised.
03
It’s hard to go either way
Compared with friends such as Alibaba and JD.com, ByteDance has been involved in the field of big health a little later. At present, ByteDance is focusing on this, which undoubtedly has its motivation and confidence basis, but whether it is catching up with friends or finding another way, it is not easy to see now.
As far as the past trajectory is concerned, Byte Health, as mentioned above, once included the Wu Haifeng entrepreneurial team of Baidu, and was once accused of benchmarking JD Health on the development path. These actions are linked together, and it is inevitable that Byte wants to copy Baidu. Or the meaning of the work of predecessors such as Jingdong, but this may not be true.
According to the observation of Haike Finance, Internet companies such as Ali, JD.com, and Baidu are basically laid out along the two branches of the river of the big health industry. One branch focuses on e-commerce, the other focuses on diagnosis and treatment, and ByteDance wants to do , and possibly more.
Due to the advantages of their parent companies Ali and JD.com in the e-commerce field, Alibaba Health and JD Health both entered the big health industry through pharmaceutical e-commerce in the early days. Today, the sales of generalized pharmaceutical products are still their main business.
The core revenue sources of AliHealth are the self-operated pharmaceutical business, the pharmaceutical e-commerce platform business (Tmall Pharmaceutical Platform), medical health and digital service business. Ali Health has always accounted for more than 90% of its total revenue.
The latest financial report shows that in the 12 months ended March 31, 2022, Ali Health achieved revenue of 20.578 billion yuan, of which the pharmaceutical self-operated business revenue was 17.911 billion yuan, accounting for 87.03% of the total revenue; the pharmaceutical e-commerce platform business The revenue was 1.996 billion yuan, accounting for 9.7%; the revenue of medical health and digital services business was 670 million yuan, accounting for only 3.2%.
The situation at JD Health is much the same. The latest financial report shows that in the six months ended June 30, 2022, JD Health achieved revenue of 20.225 billion yuan, of which commodity revenue (sales of medicine and health products) was 17.482 billion yuan, accounting for 86.4%; service revenue (platform, advertising) and other services) 2.743 billion yuan, accounting for 13.6%.
Baidu Health, Ping An Health, etc., are much weaker than Ali Health and JD Health, and take another path, that is, diagnosis and treatment.
Baidu Health is not listed independently, and its user and revenue data are not disclosed much even in Baidu’s financial report, but its core business is roughly based on search, big data, AI technology health science, online consultation, chronic disease management, Internet Hospitals, health malls, etc.
Ping An Health, a company listed on the Hong Kong Stock Exchange, can see it more clearly. The latest financial report shows that for the six months ended June 30, 2022, Ping An Health achieved revenue of 2.828 billion yuan, of which medical service revenue was 1.132 billion yuan, accounting for 40.0%; health service revenue was 1.696 billion yuan, accounting for 60.0%.
As mentioned above, Byte Health is backed by ByteDance, which has both traffic and algorithm longboards, as well as the support of a growing multi-modal e-commerce system. On the surface, even if you can’t come up with subversive innovative gameplay, but just follow the above two roads, with time, Byte Health can overtake and become the top.
But the reality is not so simple. Other things aside, the increasingly stringent industry regulation in this field has added more uncertainty to the development of all parties involved.
Taking recent regulatory actions as an example, in February and June 2022, the “Detailed Regulations on Internet Diagnosis and Treatment Supervision (Trial)” and the “Regulations on the Implementation of the Drug Administration Law (Draft for Comments)” were released successively, pointing directly to the above-mentioned two major health care industries. The direction has many shocks to the industry.
The detailed rules once again clarified the boundaries for Internet diagnosis and treatment. The document mentions that the prescription should be issued by the receiving doctor himself, and the use of artificial intelligence to automatically generate prescriptions is strictly prohibited; the doctor must conduct real-name authentication before receiving a consultation to ensure that the doctor provides diagnosis and treatment services by himself, and other personnel and artificial intelligence software must not use or substitute for it. Physicians themselves provide medical services. This puts forward higher requirements for entrants who focus on diagnosis and treatment, such as Baidu Health and Ping An Health.
The regulations set clear limits on the sale of drugs. Third-party platform providers are not allowed to directly participate in online drug sales activities, the document said. Affected by the news, the stock prices of listed companies such as Ali Health, JD Health, and Ping An Health all fell on the same day, with the largest drop as high as 17%.
ByteDance, which is in the process of exploration, is also in the game, and its impact is still difficult to measure.
Byte Health has gradually penetrated into offline medical care, but the development of the latter will not be less difficult.
Compared with the convenience and efficiency of Internet medical care, offline medical institutions are still traditional, and there are still many pain points, and the public is more accustomed to going to public hospitals when they need it. These problems involve many links, and change cannot happen instantaneously.
(Disclaimer: This article only represents the author’s point of view and does not represent the position of Sina.com.)
This article is reproduced from: http://finance.sina.com.cn/tech/csj/2022-09-27/doc-imqqsmrp0669791.shtml
This site is for inclusion only, and the copyright belongs to the original author.