China’s digital health care start-ups get a boost from the coronavirus, Beijing and investorsSeptember 10, 2020
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BEIJING — The coronavirus pandemic is proving to be the accelerator that China’s health care technology start-ups needed.
In a country of 1.4 billion, many people who used to travel and wait for hours to see doctors are turning more to online products, companies say. The government is rolling out needed policy support for internet-based health care. And investors are pouring in money.
Before the coronavirus outbreak, much of the health-tech investment in China was focused on scientific research for medical treatments, said Kitty Lee, Singapore-based partner and head of the Asia Pacific health and life sciences practice at Oliver Wyman.
Going forward, she expects the portion of investment focused on consumer health care and infrastructure will grow more rapidly than biotech.
In the second quarter, global health-care funding to private companies reached a quarterly record of $18.1 billion, according to CB Insights. Health-care funding in Asia nearly doubled from the prior quarter to $5 billion, and deals to China-based start-ups recovered to pre-coronavirus levels, the analysis found.
“The entire Chinese health industry has really only begun to be cultivated after the passing of the (coronavirus) epidemic,” JD Health CEO Xin Lijun said in an interview last week, according to a CNBC translation of his Mandarin-language remarks.
The company is a subsidiary of Chinese e-commerce giant JD.com and is set to receive an investment of more than $830 million this quarter from Hillhouse Capital.
During the worst of the outbreak in China, JD Health offered free online consultations, drawing roughly 150,000 patients or more a day, who then realized they didn’t necessarily have to go to a physical hospital, Xin said. He now claims that in less than three years, his health tech company has the highest income among its peers in China.
Covid-19 first emerged late last year in the Chinese city of Wuhan. The disease began to spread within the country in January and February, before hitting the rest of the world in a global pandemic that has infected more than 27.6 million people and killed more than 900,000 people. In an effort to curb the outbreak, authorities have restricted social gatherings, forcing people to turn more to online platforms.
In the first six months of the year, visits to health care institutions in China dropped 21.6% from a year ago, according to data released Aug. 21 by the National Health Commission. Visits were still down 9.7% year-on-year in June to 630 million, the commission said.
On the other hand, Tencent-backed WeDoctor said that during the coronavirus outbreak, customer orders for online consultations increased 3.6 times from a year ago. More than 50,000 doctors joined the platform for a total of about 250,000 physicians, according to WeDoctor.
More high-level support
The Chinese government has also stepped up efforts to back the health tech industry’s development. Notably in July, 13 major national departments…