The technology sector in China is currently focusing on the online healthcare market as JD Health prepares for its public offering, anticipated to be one of the largest IPOs in Hong Kong this year.

Similar to Amazon, major Chinese e-commerce companies Alibaba and JD.com are actively expanding into the substantial healthcare industry. Their services encompass a broad spectrum, including 24/7 medicine delivery, the provision of consumer health services such as cosmetic surgery, remote patient diagnoses, digital solutions designed for hospitals – like appointment scheduling – and advertising options for pharmaceutical companies.

Alibaba Health originated as an investment within the e-commerce company and evolved into a subsidiary through a series of mergers and acquisitions. JD Health, conversely, was established as a separate entity from JD.com in 2019 and rapidly attracted significant investment.

This expansion into healthcare aligns with these companies’ objective to become comprehensive, all-inclusive service providers. The following data offers a comparison of these digital health leaders:

Revenue

Both companies primarily generate revenue through the sale of medications – both over-the-counter and prescription – and other health-related products, such as vitamins. They operate both direct-to-consumer pharmaceutical businesses, involving greater control over supply chains, and act as marketplaces for external suppliers, earning revenue through commission charges. Each also has a growing services sector catering to individual consumers, hospitals, and pharmaceutical manufacturers.

Alibaba Health – 7 billion yuan or $1.07 billion (for the six months ending in September)

JD Health – 8.8 billion yuan or $1.35 billion (for the six months ending in June)

Profitability

Alibaba Health reported its first period of profitability this year, achieving a profit of 278.6 million yuan for the six months ending in September, a significant improvement from the 7.6 million yuan loss during the same period last year.

JD Health experienced a loss of 5.4 billion yuan in the six months ending in June, contrasting with a profit of 236.3 million yuan during the corresponding period in 2019. This loss was largely attributable to adjustments in fair value following the issuance of additional convertible preferred shares.

Active users

Despite generating less revenue, Alibaba Health benefits from a larger user base due to Alibaba’s extensive ecosystem. During the year ending in June, a total of 250 million users completed purchases through Tmall, Alibaba’s business-to-consumer marketplace’s online pharmacy. Additionally, Alibaba Health’s direct-to-consumer drugstore had 65 million annual active users.

In contrast, 72.5 million individuals made at least one purchase via JD Health’s platform within the past year.

Doctor resources

Both companies offer online health consultation services, which experienced increased demand during the COVID-19 pandemic. Alibaba Health had a network of over 39,000 doctors as of September, while JD Health’s network included over 65,000 doctors, comprising both in-house and third-party professionals.