In the trillion-dollar medical market battle of 2019, what were Alibaba, Tencent, Baidu, and JD doing?

Looking back at 2019, the capital winter is still spreading, and not only institutional investors but also internet giants seem to be starting to consider investment returns. Spending money has become more cautious.

 

According to Lianxian Insight data, in the first half of 2019, Tencent's new acquisitions of affiliated companies and increased investments in existing affiliated companies totaled 8.459 billion yuan, while the figure was 31.976 billion yuan in the same period last year.

 

Spending money wisely and becoming rational has become the true portrayal of giants this year.

 

In this context, in the trillion-yuan medical market, where internet giants have already established a presence and fiercely competed, how will they deploy their forces, seize more strategic heights, connect the dots, and map out their strategic paths in the medical field?

 

To address this, we have compiled the major actions of the four giants, Alibaba, Tencent, Baidu, and JD.com, in the medical field in 2019. Based on 'what they are doing,' we have also made a preliminary summary of what BATJ is 'thinking' this year. Further discussion is welcome.

 

Baidu

Restarting Healthcare, Reorganizing Search, AI Becomes the Keyword of the Year

 

 简评 

 

Looking back at 2019, Baidu's actions in the medical field can be described as "making a comeback," closely following its all-in AI strategy.

 

This year, acquiring Kangfuz, collaborating with Dongsoft, creating Lingyi Wisdom, entering the ophthalmology AI field... Baidu has not hidden its ambition in the "medical + AI" field. Baidu is also very determined, increasing its investment. In the ranking of the number of Chinese artificial intelligence patent applications this year, it ranked first with 5712 applications, 2.4 times that of last year.

 

Overall, in 2019, whether it was the focused efforts on medical AI, the renewed reorganization of medical search, or the layout of medical devices, Baidu's intention to replenish its ammunition in the medical field has become clear.

 

Major Events

 

Added Medical Device Sales Qualifications

 

On February 11, the business information of Baidu Online Network Technology (Beijing) Co., Ltd. (100% owned by Baidu Inc.) changed, and the business scope added "sales of Class Ⅲ medical devices" and "sales of Class Ⅱ medical devices," etc.

 

This change is considered to be Baidu's renewed efforts in the medical business. However, according to Baidu's response at the time, this was "in accordance with the plan of AI empowerment of medicine, Baidu will donate AI fundus screening integrated machines to 500 impoverished county medical points nationwide. According to national regulations, it is necessary to add medical device business qualifications to the business license."

 

Acquisition of Kangfuz, Intending to Restart Healthcare Layout

 

On February 28, open reports showed that Beijing Baidu Netxun Technology Co., Ltd. acquired all equity of Beijing Kangfuz Health Technology Co., Ltd.

 

Beijing Kangfuz Health Technology Co., Ltd., founded in 2015, is a provider of medical artificial intelligence technology, knowledge, and data services. It uses knowledge extraction, reasoning, and representation knowledge graph construction technologies and has an APP product, "Left Hand Doctor.". This move is also considered a major springboard for Baidu's entry into the medical field.

 

Robin Li: Reorganizing the Search System, with Healthcare Taking Priority

 

Medical search has been one of the most criticized aspects of Baidu's healthcare layout.

 

In February of this year, Baidu released its Q4 2018 and full-year unaudited financial reports. Among them, "Baidu Core," represented by search services, had total revenue of 78.3 billion yuan, a year-on-year increase of 22%. At that time, Robin Li said, "The rectification and cleanup of medical advertisements is an ongoing process...Especially in this quarter and the next quarter, we will update the search system, and the medical industry will be the first priority."

 

It is reported that by May, Baidu had rejected 35 million medical variant words in online promotion and removed 237 million non-compliant advertisements.

 

Strategic Investment in Dongsoft, Accelerating the Large-Scale Landing of AI

 

On September 10, Baidu announced a strategic investment in Dalian Dongsoft Holdings Co., Ltd., with a total investment of 1.443 billion yuan. Baidu CTO Wang Haifeng became a director of Dongsoft Holdings.

 

In the field of smart healthcare, Baidu and Dongsoft's cooperation includes medical intelligent cloud, AI auxiliary diagnosis, medical big data mining, smart health management, and cloud hospitals. The industry generally believes that this strategic cooperation is an important sign of Baidu's large-scale implementation of artificial intelligence and a milestone event for accelerating the intelligent upgrading of key areas such as smart cities and healthcare.

 

In fact, as early as March of this year, Baidu began to invest in Dongsoft Medical. On June 5, the two sides signed a strategic cooperation agreement. In the field of healthcare, Baidu Smart Cloud will join forces with Dongsoft to jointly upgrade cloud-based HIS (Hospital Information System). The two sides will also jointly establish an "AI-based CDSS (Clinical Decision Support System) Special Group" to jointly promote the exploration and application of AI auxiliary decision-making systems in medical institutions.

 

Joining Hands with Scicent Healthcare, Deepening Cooperation in AI Healthcare

 

On October 30, Scicent Healthcare's wholly-owned subsidiary, Scicent Healthcare Technology Co., Ltd. (hereinafter referred to as "Scicent Technology") signed a "Deep Cooperation Agreement" with Baidu. The two parties reached a framework agreement on cooperation in AI medical innovation application projects. Scicent Technology is responsible for the product integration and operation of its own products and Baidu's AI products. Baidu, based on its artificial intelligence technology advantages, will assist Scicent Technology in the construction and application development of AI in the field of medical informatization.

 

Released the Industry's First Group Standard for AI Fundus Photography Annotation

 

On September 21, Baidu's "Lingyi Zhihui" and the Zhongshan Ophthalmic Center of Sun Yat-sen University jointly launched the industry's first group standard for "AI Fundus Photography Annotation." The "AI Fundus Photography Annotation" group standard will widely incorporate experts from industry, academia, research, and application, ensuring data quality from the data source and promoting the standardized development of the ophthalmology AI industry.

 

Alibaba

Deepening into the Core of Serious Medical Care, E-commerce Still Plays a Major Role

 

 简评 

 

Internet hospitals, "medical + AI," health management, medical beauty... Alibaba seems to have covered all these hot words this year.

 

In 2019, Alibaba's biggest move in the health field was undoubtedly bringing the two major physical examination giants, iKang and Meinian Health, under its umbrella, seizing the huge market of health checkups.

 

Of course, judging from the financial reports, Alibaba Health's pharmaceutical e-commerce still plays a major role this year, and the model paths in innovative medical fields are still being explored. But what is certain is that Alibaba Health is gradually delving into the core of serious medical care on the road of boundary expansion and commercial exploration.

 

Major Events

 

Large-Scale Acquisition of iKang

 

On March 11, Aier Kang Guobin's parent company, Aier Kang Guobin Health Management Group Co., Ltd., completed a merger and acquisition. The investors were Alibaba, Suning, Yunfeng Fund, and Boyu Capital. This was only two months after its delisting.

 

This led to speculation in the industry that "Alibaba may be seriously tackling the difficult nut of the medical industry." Some analysts believe that Alibaba's acquisition will not only gain strategic medical assets but also have the opportunity to leverage Aier Kang Guobin's strong pre- and post-physical examination extension services to create synergies in pharmaceutical e-commerce and health management, and to vertically extend based on physical examination centers in first- and second-tier cities.

 

Investing 7.3 billion to enter the Meinian Health industry

 

On October 28, following the acquisition of Aier Kang Guobin at the beginning of the year, Alibaba made its second move into the health check-up industry. It is reported that the total capital investment by Alibaba this time reached approximately 7.3 billion yuan. After investing in Aier Kang Guobin and then Meinian Health, Alibaba has brought two major physical examination giants under its wing, significantly increasing its industry influence and opening up the huge market of health check-ups.

 

Jointly creating a "Future Hospital" with Wuhan Central Hospital and Alipay

 

On March 27, Alibaba Health announced the official launch of the "Future Hospital," jointly created with Wuhan Central Hospital and Alipay. After binding their medical information on Alipay, Wuhan residents can enjoy cashless medical treatment at Wuhan Central Hospital, enjoying online medical services covering the entire process from in-hospital navigation to waiting and collecting medicine at the window.

 

Launching the "Epilepsy EEG Analysis Engine"

 

On May 9, the "Epilepsy EEG Analysis Engine" product developed by Alibaba Health's artificial intelligence laboratory was officially launched. Tested by Wang Yuping, director of the neurology department of Xuanwu Hospital of Capital Medical University, the engine has a significant role in assisting doctors in judging various abnormal discharges, seizure types, and syndromes in epilepsy patients, and can reduce EEG analysis time by up to 70%.

 

It is estimated that in real-world scenarios such as temporal lobe epilepsy, Alibaba Health's AI engine can process two hours of EEG data in just 5 minutes. After verification by a doctor, an analysis report can be completed within 10 minutes.

 

Releasing the "Organ Transplant Follow-up Platform"

 

On July 18, Alibaba Health announced the launch of the "Organ Transplant Follow-up Innovation Platform." This platform was jointly built with authoritative medical experts in the field of transplantation, hoping to shift the traditional offline follow-up model online to help improve the current difficulties in post-operative management of organ transplantation in China.

 

It is reported that this is also the first time Alibaba Health has built a doctor-patient communication management platform through Alipay and DingTalk.

 

In the view of Yang Feng, vice president of Alibaba Health, "This platform is very significant for Alibaba Health. We have done a lot of things in the Internet field and are constantly moving forward, but not many things involve the core of medicine. As a medical and health company, we must delve into the core of medicine, and transplant follow-up is a very good area."

 

Hema Fresh enters the pharmaceutical e-commerce market

 

On July 18, Hema and Guoyao Health Online announced a strategic partnership, becoming new retail partners in pharmaceuticals.

 

It is understood that this is the first major cooperation between Hema and a pharmaceutical and health company. Guoyao Online is the only pharmaceutical e-commerce operator under China National Pharmaceutical Group, focusing on online operations and offline new retail synergy. Hema stated that the consumer data and data mining capabilities accumulated by Hema's online and offline platforms can also bring huge imagination space for future entry into the health industry.

 

Tmall Medical Beauty creates an offline service platform

 

On September 3, Alibaba Health officially launched Tmall Medical Beauty's "Renewal Plan" to help Brands and institutions connect with 300 million beauty-seeking consumers on Tmall. It is understood that the core of this "Renewal Plan" is to help the industry establish its own stores on Tmall, thus owning its own user operation base, and growing together with the future development dividends of Tmall Medical Beauty.

 

At the same time as launching the "Renewal Plan," Shen Dichan, CEO of Alibaba Health, revealed that as an e-commerce platform with over 700 million users, Tmall and Taobao will provide corresponding traffic support to Tmall Medical Beauty. At the same time, Tmall Medical Beauty will also cooperate with Alipay to recommend good services to Alipay users.

 

In terms of offline access, Alibaba Health will try to cooperate with Gaode to integrate medical beauty institutions into Gaode to meet users' needs for medical beauty services. In addition, Alibaba Health will also cooperate with Alibaba's local life platform (Ele.me and Koubei) to integrate medical beauty services into local life services.

 

Tencent

A year of implementation for the "3+2" health strategy

 

 简评 

 

In the future, Tencent's medical and health business will focus on three core capabilities and two key disciplines: firstly, the construction of basic infrastructure such as electronic health cards and medical insurance payments; secondly, professional and efficient Tencent Medical Encyclopedia services; and thirdly, medical AI; the two key disciplines are oncology and maternal and child health.

 

Looking at it now, promoting innovative applications of electronic health cards, assisting medical insurance electronic certificates, upgrading Tencent Medical Encyclopedia, deploying AI medical care, and joining hands with Sanofi and Novartis... In 2019, Tencent's "3+2" strategy in the medical field has gradually been implemented.

 

Major Events

 

Closing Teng Ai Doctor

 

On the evening of January 24, Tencent's Teng Ai Doctor WeChat official account issued an announcement: Due to adjustments in the company's organizational structure and business strategy, Teng Ai Doctor will officially cease service at 12:00 noon on March 10, 2019. The Teng Ai Doctor APP, WeChat official account, and website will be completely shut down, marking the end of the three-year-old Teng Ai Doctor.

 

The industry was filled with astonishment and sighs.

 

Promoting innovative applications of electronic health cards on the WeChat platform

 

In January, the National Health Commission Statistics and Information Center and Tencent reached a strategic cooperation on innovative applications of electronic health cards. Based on the national standards and specifications for electronic health cards, and leveraging Tencent's deep technological accumulation and strong user reach capabilities, the two sides will use the WeChat platform as an innovative channel for the issuance and application of electronic health cards, promoting the popularization and application of electronic health cards nationwide, and helping to implement the "Internet + medical and health" public welfare service applications.

 

In this cooperation, Tencent will cooperate with the National Health Commission Statistics and Information Center and local governments to carry out pilot applications of electronic health cards, promoting the innovative development of resident health cards from "single offline entities" to "integrated online and offline," jointly forming a "virtual and real combined" service network for resident health cards, achieving integrated online and offline identity authentication services, promoting the optimization of medical service processes, ensuring the security of online applications, reducing the cost of issuing and using cards, and accelerating the widespread coverage of electronic health cards nationwide.

 

Strong cooperation with Philips to explore intelligent medical care

 

On March 22, Philips and Tencent reached a strategic cooperation, focusing on research and development cooperation in the field of intelligent medical care. Starting from the clinical needs of hospitals, the two sides jointly promoted the research and development of an AI-assisted diagnostic system for electronic colposcopy.

 

It is understood that Philips will provide real-time video and images to Tencent's colposcopy-assisted diagnosis system via an image transmission protocol, while Tencent's colposcopy-assisted diagnosis system will provide real-time auxiliary diagnosis information to the Philips electronic colposcopy system. Based on this, an integrated solution for the electronic colposcopy system and the colposcopy-assisted diagnosis system will be jointly developed to help clinicians operate on a unified display screen and obtain real-time auxiliary diagnostic information. This research project is also considered a trial run for strategic cooperation between the two parties in the field of intelligent medical care, and there may be deeper cooperation in the future.

 

Signing a New Strategic Cooperation Memorandum with Novartis

 

On March 22, Tencent and Novartis signed a new strategic cooperation memorandum, aiming to integrate innovative drugs, artificial intelligence, and social platforms to better benefit patients with chronic diseases.

 

This cooperation will leverage the technological advantages of Tencent's medical AI laboratory to expand cooperation in the field of heart failure, and gradually penetrate into more areas of diseases requiring long-term management. Relying on Novartis' global leading position and advantageous resources, Tencent's strategic partner, the UK mobile medical company Medopad, will also provide assistance to the cooperation between the two parties, in order to expand successful experiences to other countries around the world.

 

Strategic Cooperation with Sanofi

 

In November, Sanofi, the French pharmaceutical giant, announced a strategic cooperation with Tencent.

 

Sanofi stated that from now until 2025, Sanofi will introduce more than 30 innovative drugs and vaccines into China. After cooperating with Tencent, the two parties will focus on key disease areas such as rare diseases, neurological diseases, and diabetes, and through the deep integration of the Internet and the pharmaceutical industry, better meet patients' needs in early screening and disease management in a digital way.

 

Tencent Medical Encyclopedia Launches AI Intelligent Q&A Assistant, Layout 3D Visualization

 

At the Tencent Global Digital Ecology Conference, Tencent Medical Encyclopedia officially released its two new explorations in the field of medical science popularization: 1) Intelligent Q&A assistant, which uses a systematic medical knowledge graph and deep semantic analysis to meet the needs of patients and their families for accurate and personalized information acquisition; 2) 3D visualization of content, making complex and professional medical knowledge more approachable and improving doctor-patient communication efficiency.

 

Tencent Medical Encyclopedia explores the application of AI to medical science popularization to achieve personalized and accurate coverage of medical science popularization. Currently, Tencent Medical Encyclopedia has launched intelligent Q&A assistants for lung cancer and breast cancer. Currently, 3D visualization technology has been widely used in medical training, clinical diagnosis and treatment, medical intervention, telemedicine, etc., but there are few successful applications in C-end education. Applying 3D visualization to public science popularization can be regarded as an innovative attempt by Tencent Medical Encyclopedia.

 

Supporting the Launch of the National Medical Insurance Electronic Certificate

 

On November 24, the national medical insurance electronic certificate launch ceremony was held in Jinan, Shandong Province. The medical insurance electronic certificate is the only identity certificate for online medical insurance business nationwide. WeChat, as the certified authorization channel of the National Medical Insurance Administration, has launched the national medical insurance electronic certificate in Hebei, Heilongjiang, Fujian, and Shandong provinces. Starting from this day, some cities in the above provinces will be able to open and use it through WeChat.

 

The medical insurance electronic certificate is uniformly issued by the National Medical Security Information Platform and is an electronic medium for medical insurance identity identification generated for all insured persons based on the medical insurance basic information database. It has prominent advantages such as convenience, rich scenarios, nationwide applicability, and security protection.

 

The 2019 Tencent Medical ME Conference That Took the Internet by Storm

 

"Within the next five years, all blood cancers can be cured through CAR-T therapy." In November 2019, the medical community was swept away by this statement from Carl June, a world-renowned cancer immunologist and member of the American Academy of Arts and Sciences. Behind this is the first Tencent Medical ME Conference.

 

On November 4, the first Tencent Medical ME Conference was held in Beijing with the theme of "Questions of Life." It aimed to explore the microscopic world of the human body, trace the path of human evolution, and illuminate the enlightenment of public understanding of rational medicine. Top medical scientists from around the world gathered to showcase the latest advances in fields such as cancer and AIDS, promoting the connection between cutting-edge medicine and public health and promoting understanding of real medicine.

 

JD.com

Strategic Comprehensive Upgrade: Late Entry Doesn't Mean Slow Progress

 

 简评 

 

JD Health is undoubtedly an important new business area for JD.com. Regarding this new business area, the industry commented that "five years after BAT entered the medical industry, JD.com is late." JD Health CEO Xin Lijun responded, "It's okay to be a little late. I can avoid the mistakes and pitfalls made by my predecessors. Being late doesn't mean slow progress."

 

Indeed, the speed is fast enough. It is reported that JD Health's current revenue has exceeded 10 billion yuan, and it has already achieved profitability. In addition, from the spin-off and independent financing, to focusing on internet hospitals, and to the new strategic upgrade focusing on "health management," JD Health's ambition and large-scale development in 2019 were impressive.

 

Of course, transitioning from a mature pharmaceutical e-commerce platform to a smart hospital and upgrading to health management, JD Health still faces twists and turns and challenges behind the model transformation.

 

Major Events

 

A Powerful Blow! "JD Internet Hospital Suqian Branch" Goes Online

 

On January 16, the "JD Internet Hospital Suqian Branch" officially went online. This is the first offline physical hospital to be connected to JD Internet Hospital. Suqian First People's Hospital has been "moved" to JD Internet Hospital, becoming the first online and offline integrated cooperation between a public hospital and a platform-type Internet hospital in China. At the same time, the Suqian medical insurance system is connected to JD.com, and online medical insurance payment on the pharmaceutical e-commerce platform has also been realized.

 

The two-way approach marks the first realization in Suqian of the Internet "medical treatment, medicine, and medical insurance" closed-loop that JD.com is working to build. JD.com Vice President Xin Lijun said that connecting "three medical coordinations" in Suqian is only the first step, and the future vision is that "ordinary people don't need to go to the hospital for minor and chronic illnesses, they can be solved directly at home, and the hospital will truly become a medical center."

 

Data shows that JD Internet Hospital has signed cooperation agreements with 30 hospitals and connected more than 30,000 doctors from 327 cities in 32 provinces, autonomous regions, and municipalities across the country. Among them, 62% are from tertiary hospitals, and 80% are attending physicians or above.

 

JD Health Established with $1 Billion Investment in the Medical Industry

 

On May 10, JD.com announced the establishment of the "JD Health" sub-group in its 2019 first-quarter financial report. This is the third giant unicorn created by JD.com Group after JD Digits and JD Logistics.

 

The day before the financial report was released, JD Health received more than US$1 billion in Series A financing. JD.com revealed that this round of financing will further expand JD Health's core business, attract industry talents, and actively explore new businesses in the greater health field.

 

On July 17, Xin Lijun, Vice President of JD Group and President of JD Retail's Life Service Business Group, was appointed CEO of JD Health. "Because we are no longer doing retail, but providing medical and health services," Xin Lijun pointed out, "health is the service scenario, and personal health management is not a retail scenario." This led JD to split its big health business to expand independently.

 

Located in Xi'an Xianyang New Area, signed in Beihai

 

On September 6, the signing ceremony for the JD Health Northwest Regional Headquarters settling in Xi'an Xianyang New Area was held in Xi'an Building. According to the agreement, the JD Health Northwest Regional Headquarters will specifically establish a pharmaceutical retail subsidiary, a pharmaceutical settlement center, and a pharmaceutical warehousing and distribution center. After the project officially starts operation, the total revenue in the first three years will exceed 3 billion yuan.

 

As early as 2017, Xi'an Xianyang New Area and JD Group signed an agreement for the first JD Cloud E-commerce Innovation Center in the country to be located in Xi'an Xianyang New Area. The JD Health Northwest Regional Headquarters will establish a regional pharmaceutical headquarters covering the five northwestern provinces.

 

On September 23, JD Health held a signing ceremony for the Beibu Gulf Regional Headquarters project. It is understood that JD Health will cooperate with Beihai City to build a regional internet hospital using big data, artificial intelligence, cloud computing, the Internet of Things, and 5G technology.

 

Launched a comprehensive family health service package,Improving the family health service layout

 

In September, as one of the major events of the Super Category Day, JD's comprehensive family health service package made its debut. The comprehensive family health service package is committed to providing ordinary families with one-stop family health services, ranging from one-on-one doctor consultation services and medicine purchases to health management consultation and guidance for family members.

 

Specifically, the comprehensive family health service package can intelligently match professional doctors from major hospitals nationwide to form professional medical teams to provide one-on-one consultation services for families, targeting young people working far from their parents and young parents lacking professional childcare knowledge, focusing on common family health scenarios such as elderly chronic disease management, pediatric disease care, and male and female health regulation.

 

Proposed a new strategy of "core focus on health management"

 

On October 28, at the 2019 JD Health Partner Conference, JD Health proposed a new strategy of "core focus on health management," aiming to become everyone's "chief health steward." This strategy will focus on connecting and integrating the entire industry chain, integrating various medical resources, and providing users with products and services that cover the entire life cycle and all aspects of health.

 

Xin Lijun said, "If we cannot provide users with health guidance and management throughout their life cycle, we cannot be called a health company, and we cannot stand alone as JD Health."

 

At the same time, JD Health announced that it would leverage its business strength and advantageous resources, cooperate with partners, and focus on three aspects: pharmaceutical supply chain, medical services, and chronic disease management, launching three major initiatives: the "New Pharmaceutical Poverty Alleviation Plan," the "New Barefoot Doctor Plan," and the "New Chronic Disease Prevention and Control Plan."

 

JD Health completed Series A preferred stock financing,Post-investment valuation of approximately US$7 billion

 

On November 15, according to JD's Q3 2019 financial report, its subsidiary JD Health successfully completed Series A preferred stock financing, with a post-investment valuation of approximately US$7 billion.

 

The specific amount of this financing and the investors have not yet been disclosed. However, the financial report shows that in the third quarter, net cash provided by financing activities was 2.5 billion yuan (equivalent to US$300 million), mainly including the proceeds from the Series A financing of JD Health.