Insights

Key Opportunity in 2015 - Digital Health to Chinese Patients

February 24, 2015

China will become the world’s second largest drug market within the next year. China's healthcare management sector is growing close to 40% a year and will hit $38 billion in the next five years.

With sales growth declining in most mature markets, pharmaceutical corporations and brands look to China as a key opportunity for maintaining and developing their global prominence.

Prospects of greater intellectual property protection, an evolving regulatory regime and the transition from being a supplier of ingredients and generic drugs market to becoming a leading LSHC market are strong indicators for pharmaceutical companies that the time is right to ramp up their presence in China through drug licensing and acquisitions.

Digital health plays an increasing role as China revamps a healthcare management sector impaired by chaotic patient data, underfunded rural health centers, overburdened city hospitals and a catastrophic nationwide shortage of doctors (1,5 doctor per 1000 citizens). In fact, patients often travel hundreds of miles to see a specialist in one of the big city centers. Furthermore, the doctor-patient relationship in China is far from ideal; a recent survey stated that 67% of patients don’t trust the diagnosis and treatment provided to them by their doctor.

With a staggering mobile penetration of 91%, the market of mobile health in China is projected to exceed CNY ten billion by the end of 2018. The app Chunyu Yisheng - which raised $50 million in funding in 2014, the biggest single funding round into a Chinese healthcare startup to date - connects patients with doctors remotely to discuss and diagnose their conditions. Chunyu Yisheng has set an ambitious target of gaining 100 million users by the end of 2015.

Chinese Internet giant Tencent Holdings recently took a major stake in popular drug information platform DXY.com and led a $100 million round of funding into healthcare platform Guahao.com. Furthermore, E-commerce giant Alibaba has stated its ambitions to build a platform for online prescription drug sales and become the e-payment platform for healthcare.

The active social media penetration in China is currently 47%. Powerful social platforms like WeChat (600m users), Tencent Wiebo (580m users), Sina Weibo (556m users) are utilized by digital first-mover brands to promote disease awareness and mobile-based patient resources directly to Chinese patients.

So what is the best market penetration strategy in 2015? Putting digital health in the hands of as many patients as possible is definitely a strong contender.

Valtech’s recommendation is that pharmaceutical brands promoting digital health services should run campaigns on DXY.com to compete for the attention of doctors and on WeChat to compete for the attention of patients. A parallel campaign approach will not only create a patient-doctor loop reinforcing the reach, application and validity of the digital health services offered, it will eventually result in better access to care, improved health outcomes and added prescription value.

Valtech has in 2014 advised international pharmaceutical brands on how to develop and promote mobile-based digital health in China.

Please reach out if you want to know more about how we work with healthcare strategies and how we can help you as well.

Sources:

  • Reuters.com (2014), Digital doctors: China sees tech cure for healthcare woes
  • Linked.com (2014), China’s giants setting up foothold in digital health era
  • Nuvian.com (2014), Digital Health in China: Part I—Healthcare in the World’s Largest Economy
  • Wearesocialnet.com (2014), Social, Digital & Mobile in China 2014
  • edition.cnn.com (2014), Feeling sick? Cyber doctor is just a click away
  • reportsandintelligence.com (2014), Research and Investment Prospect of China Mobile Health Market, 2014-2018
  • sciencedirect.com (2014), Mobile technology for health care in rural China
  • mhealthwatch.com (2014), China using eHealth to fix healthcare
  • www.bain.com (2014), Embracing China's brave new pharmaceutical world
  • deloitte.com (2014), The next phase: Opportunities in China's pharmaceuticals market
  • statista.com (2014), Active social media penetration in Asian countries in October 2014