Why are tech giants flocking to the medical device field?

[Pharmaceutical Network Market Analysis] Recently, the business scope of Lenovo Group's wholly-owned subsidiary, "Shenzhen Lenovo Understanding Communication Co., Ltd." has changed, adding the "wholesale and sales of Class II medical devices" to its operations.
 
　　It is understood that China currently classifies medical devices according to the safety of medical device products. Class II refers to medical devices with moderate risk that require strict control management to ensure their safety and effectiveness. This includes several major categories such as general diagnostic instruments, physical therapy and rehabilitation equipment. Specific products include electrocardiographs, electroencephalographs, biochemical analysis systems, hearing aids, ultrasonic disinfection equipment, non-absorbable sutures, and small medical oxygen generators, etc.
 
　　In fact, as an industry widely affected by policies, since September last year, with the national expansion of the "4+7" volume-based procurement of drugs and the implementation of relevant pharmaceutical industry reform policies, waves of "price reductions" have occurred in government procurement of medical products across the country, with medical devices once occupying a large proportion of the price reduction categories. This has not only triggered major upheavals among medical device companies but has also brought development opportunities to the entire industry.
 
　　For example, the "Medical Devices Blue Book: China Medical Devices Industry Development Report (2019)" points out that the main business income of China's medical device manufacturing enterprises reached 638 billion yuan in 2018. China has become the world's second-largest medical device market, and is expected to exceed one trillion yuan in 2021-2022.
 
　　In addition, the Report also expects that the next ten years will be the "golden period" for the development of China's medical device industry, with a compound annual growth rate of over 10% in the next 10 years. Trends such as domestic substitution of imports, independent innovation, platform-based layout, and downstream industry chain extension will emerge. The scale of enterprises, especially large enterprises, will accelerate expansion, and AI intelligent medical devices in particular will rapidly rise.
 
　　Therefore, with the market prospects being optimistic, the medical device market has quickly become an area where tech giants such as Huawei, Alibaba, Tencent, and Baidu are vying to enter. For example, Huawei has always had a presence in many medical and health fields, such as digital hospitals, regional health informatization, and tiered diagnosis and treatment, but it has not made any major moves in the field of medical devices. However, in March last year, Huawei Terminal Co., Ltd. changed its Business Scope, adding multiple business areas, including the sale of medical devices (Class II medical devices).
 
　　In May last year, Hema Fresh, under Alibaba, added the sales of three categories of medical devices to its Business Scope; previously, its Business Scope already included Class II medical devices.
 
　　In September last year, Jiangsu Safe, a company controlled by JD.com founder Richard Liu, changed its Business Scope, adding the wholesale and sales of Class III medical devices, soft, hard, and orthokeratology contact lenses, and sales of care solutions, etc.
 
　　In February this year, Gree Electric Appliances established a wholly-owned subsidiary that will engage in the design, manufacturing, and sales of Class II medical devices.
 
　　Currently, from an overall perspective, the market for health-related businesses has become a popular choice for investors.