PE investors commit $1b to JD.com's healthcare unit
A group including CITIC Private Equity, CICC Capital and Baring Private Equity Asia has agreed to invest $1 billion in the healthcare unit of Chinese e-commerce giant JD.com, acquiring a combined stake of 14.5%.
The fresh capital will enable the company to expand its core business, recruit talent and explore new healthcare initiatives, according to a filing. JD.com will remain the largest shareholder after the round.
The company, known as JD Health, consolidates a number of healthcare-related businesses that were previously managed in separate JD.com subsidiaries. These include a B2C online pharmacy, JD Online Healthcare, which provides online medical consultations from registered doctors, a B2B drug sales platform called Yaojingcai and a unit that uses artificial intelligence to study healthcare-related big data.
The aim is to build an online-to-offline (O2O) platform that provides both medical consultations and sales of drugs to patients and institutions. JD Online Healthcare currently has over 200,000 registered doctors, who come from more than 1,000 hospitals, according to the company.
Customers accessing the service will be directed to either consult with a doctor online or, depending on the seriousness of the condition, to an offline medical institution that has partnered with the platform. Those who consult online receive digital prescriptions, and the online pharmacy will compile a list of drugs for users to purchase either online or at a brick-and-mortar pharmacy.
JD Health is the latest attempt by JD.com, China’s second-largest online retailer after Alibaba Group, to enhance its healthcare business in the face of rising competition from other Chinese tech giants. Tencent Holdings, for instance, started to operate in the segment in 2014 with the launch of WeChat Intelligent Healthcare, a platform that allows users to book appointments and make payments at hospitals and other medical facilities.
As of 2017, over 38,000 medical facilities in China had WeChat accounts. 60% of those provide online consultation and appointments, and 35% support medical bill payment by WeChat pay. Tencent has also been involved with healthcare start-ups through investments in companies such as Trusted Doctors, an O2O platform that acquired Tencent Doctorwork in 2018.
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