the latest financial reports of the three internet medical giants: making money steadily, strategic shifts and destiny
2024-09-14
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recently, alibaba health, jd health, and ping an good doctor have successively released their latest financial data.
in terms of revenue, alibaba health and jd health maintained revenue growth on a large base, but the growth rates both fell back below 5%; ping an good doctor's revenue scale continued to shrink, but it achieved profitability at the financial report level for the first time.
in terms of the latest strategies and business layouts, the three internet medical giants are all moving along their respective established strategies, and all business adjustments are subject to the overall strategy of the group company. jd health is still committed to building an integrated online and offline medical and health service ecosystem, but the dream of family doctors has been handed over to ai; ali health has given up the ambition of building a closed loop from consultation to drug purchase to subsequent health management, and resolutely turned to the pan-health track; ping an good doctor is close to completing its strategic transformation, and its new kpi is to serve the medical and elderly care needs of the group's financial customers.
in the brilliant years of the past, everyone was exploring the boundaries and possibilities of the internet medical industry. they tried various business directions such as tod (doctor), to i (insurance), toh (hospital), top (pharma), and finally found their own position in the industry.
this industry, born out of ideals and technology, is gradually returning to its commercial essence. with the liberalization of online medical insurance and the rise of instant retail, the end of this race is far from over. the choices made by various companies have also brought about the division of their respective destinies.
the ceiling of selling medicine
in terms of revenue, jd health, ali health and ping an good doctor are ranked from high to low, and the gap is quite obvious. in the first half of this year, jd health achieved revenue of rmb 28.3 billion, rmb 1.3 billion more than ali health's revenue for the entire fiscal year 2024. ping an good doctor continued to reduce its core business, with revenue of only rmb 2.09 billion in the first half of the year.
although there is a big overall gap, if we only look at the definition of internet medical services, the three companies are almost on par with each other.
jd health divides its revenue into two categories: goods and services. services include commissions from e-commerce platforms, online consultations, digital marketing, etc. in the first half of this year, the total revenue from this category was rmb 4.4 billion. after significantly reducing its physical sales business, ping an good doctor classified all of its rmb 2.09 billion revenue as services. in ali health's latest semi-annual report, its service revenue was around rmb 1.5 billion.
it is worth noting that whether it is jd health or ali health, their basic plate - sales of self-operated products have entered a bottleneck period of growth.
in the first half of this year, jd health's self-operated revenue was rmb 23.9 billion, only rmb 700 million more than the rmb 23.2 billion in the same period last year, which directly lowered jd health's overall revenue growth rate to 4.6%. for a simple comparison, in the 2023 interim report, jd health's self-operated revenue increased by rmb 5.7 billion, and the company's overall revenue growth rate was 34%.
ali health's slowdown trend is even more obvious. according to data from the 2024 fiscal year, ali health's self-operated revenue was rmb 23.74 billion, almost no growth compared to the 23.6 billion yuan in the 2023 fiscal year. as a result, ali health's revenue growth in the 2024 fiscal year was only 1%, while this indicator was 30% in the 2023 fiscal year.
"for the category of pharmaceuticals and medical devices, no matter which channel it is in or how big the channel dividend is, it will eventually reach a ceiling." an investor who has long focused on the pharmaceutical field told jianwen consulting that since their establishment, jd health and ali health have achieved double-digit or even multiple growth in annual revenue, but as the market approaches saturation, this momentum will inevitably be interrupted, "everyone will fluctuate at a relatively stable scale."
compared with these two e-commerce platforms that are good at "selling medicine", ping an good doctor has gone the other way in recent years, shrinking its drug sales business. although its revenue scale has been declining (down nearly 40% from its peak), its profit margin has been steadily rising. since last year, ping an good doctor's gross profit margin has remained stable at around 32%, 10 percentage points higher than jd health and ali health, and finally turned losses into profits for the first time in this year's interim report.
of course, it is undeniable that changes in labor costs have also greatly affected the profit curves of these three companies. for example, in the past three years, the number of employees of ping an good doctor has been reduced from 4,561 to 1,446, a reduction of nearly 70%. however, the number of employees of ali health has increased from 1,033 to 1,435, and the number of employees of jd health has increased from 2,576 to 3,177.
"in the past few years, you will find a very interesting phenomenon. ping an good doctor, which was the first to pursue user scale, began to tell the story of 'small but beautiful', while the platform that originally started out serving small and micro businesses is slowly becoming 'big and comprehensive'."
lu yang (pseudonym), a senior researcher in the pharmaceutical e-commerce industry, said that the number of active users on jd health and ali health's self-operated platforms is 180 million and 77 million respectively, which is comparable to the overall revenue scale of the two companies. ping an good doctor no longer reflects the number of individual users in its financial reports, but instead the number of strategic business paying users and service companies, turning to the group's main financial business and b-end market.
return to the "main business" and comfort zone
combining public reports and the latest financial report information, the strategic focus and business direction of the three companies are quietly changing.
from the perspective of jd health, the biggest moves this year are nothing more than two things.
first, the family doctor business, which was originally expected to be successful, was eliminated and adjusted. in may this year, jianwen consulting published an exclusive report. according to people familiar with the matter, jd.com's family doctor service has invested huge human, material and financial resources since it was launched in august 2020. the product positioning has also undergone multiple adjustments, but it has never been able to solve the sales problem. to put it bluntly, the input-output ratio is not proportional, and it is a money-losing business.
second, based on the "jingyi qianxun" medical model released last year, a one-stop smart medical service product "kangkang" was launched. jd health said that it hopes that "kangkang" can become a personal health assistant for ordinary users, that is, when users encounter health problems in life, they can ask "kangkang" and connect to a large number of online and offline medical resources through "kangkang", whether it is seeking medical advice or health science popularization, it can be solved in one stop.
seeing this, those who know the industry will find that "kang kang" is just an ai version of a family doctor. in other words, jd health still hopes to create an entry-level product, but in the past, real-life family doctors had high costs, high prices, and limited service numbers, while the ai version of the family doctor perfectly avoids these shortcomings.
the only question is whether the service capabilities of the ai version of the family doctor are worthy of user trust. jd health has also endorsed this point many times in its financial report for the first half of this year. for example, the "pre-diagnosis digital doctor based on a large language model" jointly developed by jd health and the first affiliated hospital of wenzhou medical university was selected as a typical case of innovative application of emerging technologies in hospitals in chima2024, including the launch of ai psychological companions, auxiliary diagnostic tools and digital management tools.
in contrast, ali health, which changed its leadership at the end of last year, seems to have made up its mind to downplay its serious medical focus and instead invest in a pan-health track that is more in line with the genes of e-commerce.
in the 2024 fiscal year, ali health's self-operated revenue remained flat overall, and several categories with year-on-year revenue growth of more than 50% were personal care, health care and massage equipment, and the revenue of protective gear (equipment) increased by more than 68% year-on-year. at the same time, ali health pharmacy also added slow health product categories such as pet medical care and some functional skin care masks. their common feature is that they are independent of the traditional medical system and are closer to the attributes of daily consumer goods.
even in the field of prescription drugs, ali health has chosen lighter categories for cooperation. for example, in cooperation with huadong medicine, it launched the first domestically produced glp-1 drug, liraglutide injection, online, which can be used to treat simple obesity patients with a bmi greater than 27. in addition, ali health also cooperated with pfizer to launch leveno, the world's only drug approved for the treatment of severe alopecia areata in adults.
among the three giants, the only one that wants to deepen its medical services is ping an good doctor, the smallest one.
a meaningful detail is that in june this year, after jd health took down its family doctor service package, ping an good doctor announced a comprehensive upgrade of its family doctor brand "ping an family doctor". the upgraded "ping an family doctor" has created an 11312 service system, including a professional and authoritative family doctor team, a world-class standard service path, 3 sets of proactive health management services and 12 scarce medical resources.
in addition, li dou, the ceo who took office in august last year, also brought another main business line to ping an good doctor - elderly care management. this part of the business was also separately listed as the company's main business item and disclosed for the first time in the first half of this year.
in order to support the two core hubs of family doctors and elderly care butlers, ping an good doctor has established a team of about 50,000 internal and external doctors covering 29 departments, and has signed contracts with about 2,900 expert doctors. in terms of ai capabilities, ping an good doctor's self-developed medical big model covers 1.43 million doctors and 1.42 billion consultation data, which can improve the efficiency of family doctor services by 30%.
after strategically abandoning the c-end market and introducing elderly care services, ping an good doctor's business goals have become very clear - to focus on the 17.7 million paying users of strategic businesses and to provide solid medical and elderly care services to this group of high-net-worth people.
when the external environment is not good, companies, like people, will instinctively retreat to the environment they are most comfortable in. but this does not mean the end of the adventure, there will always be a time for people to start again.
(this article comes from china business network)
