The parent company of TikTok is becoming a part of a hot recent trend, though this one doesn’t involve the video-sharing app’s signature dance challenges and addictive videos.
As an alternative, Chinese firm ByteDance is joining the ranks of fellow tech corporations like Amazon and Apple by pushing into the healthcare space, raising questions on health ethics and market consolidation.
Through its Xiaohe Health subsidiary, ByteDance spent a reported $1.5bn in August to accumulate Amcare Healthcare, a non-public hospital chain known for offering maternal, women’s and youngsters’s healthcare to the Chinese elite. Its VIP postpartum package, for instance, costs greater than $30,000 for a month stay in a luxury hotel-like hospital.
The acquisition is one in all the most important within the Chinese tech sector since authorities began to crack down on large-scale mergers and “disorderly capital expansion” in 2020.
It continues a string of health acquisitions for the corporate, which has invested in drug discovery, online mental health and digital medical encyclopedia corporations lately.
Rui Ma, founding father of investment consulting firm Tech Buzz China, told The Information on Friday that these online medical businesses, while popular, aren’t extremely profitable, so the corporate could also be in search of a footprint within the physical retail space.
“One of the best argument I’ve seen thus far on why they modified strategy is that, well the digital strategy isn’t working,” she said. “That is obviously an excellent market opportunity – I don’t know if it’s the very best opportunity, but it surely’s possible that given competition in other areas…that is the very best strategy left for ByteDance.”
Most Chinese people have state insurance, but a smaller portion of rich residents hunt down private care, and sometimes go overseas for treatments like in vitro fertilisation. Amcare is licensed to perform IVF inside China, a treatment recently added to the coverage list under state insurance.
ByteDance could also be hoping it may possibly find recent customers among the many roughly 600 million day by day users who’re hooked on Douyin, the Chinese version of TikTok, which features deeper integration with e-commerce than its US counterpart.
The pairing might sound a wierd one, but a variety of leading Chinese corporations – in addition to tech American giants – are racing to combine tech and health.
Tencent has experimented with opening brick-and-mortar clinics, while Alibaba and JD.com each run online pharmacies.
The health industry is valued at $89bn in China, in response to Bloomberg.
Silicon Valley corporations have pursued the same strategy.
In July, Amazon purchased the boutique clinic chain One Medical for $3.9bn, and Apple has increasingly integrated its Health app into products, allowing participating medical providers to make use of its devices to store patients’ medical records.
Chief executive Tim Cook once said Apple’s “best contribution to mankind” might be through its health technologies.