‘Internet Plus’ nurturing China’s nascent digital health market

Back in April this Editor was surprised by the interest Chinese investment companies had in Scanadu–and vice versa. Two of the three, Tencent Holdings and Fosun International, led the $35 million Series B round. Scanadu in return reportedly is developing products primarily for the China market, such as a urine analyzer.

Somewhat surprising, but it should not be, is the extent that private money tacks to the winds of official Chinese government policy. Ecns.com, the online site of the state China News Service, reports that part of the government ‘Internet Plus’ initiative will be targeted to the health and social care needs of 212 million people over 60 in China–a surprising 15.5 percent of the population. The civil affairs vice-minister has publicly advocated the use of the Internet, cloud computing and big data to transform care for the aged. Oddly, this also includes the development of ‘e-commerce’ for seniors.The language is also interesting and very careful–“The country’s population also features a large number of elderly people who are disabled and who are faced with empty nests and poverty” and a similar to the West shortage of carers.

Additional evidence: in April Shanghai Daily reported that ZTE Corp, China’s biggest public telecommunications equipment maker, is expanding into health IT and services for older Chinese as part of ‘Internet Plus’ with ZTE Health. Initially it is offering Internet-based health care services in 36 communities in Pudong New Area. The article is typically light on specifics but mentions emergency call, GPS locators and ‘smart devices designed for them.’

A Reuters report adds telemedicine — virtual consults between hospitals at a scale unknown in the West (160 hospitals from a medical center in Hangzhou alone). Scanadu investor Tencent Holdings last October led a $100 million round of funding into healthcare platform Guahao.com and took a stake in a popular drug information platform DXY.com. E-commerce giant Alibaba invested in health data firm CITIC 21CN Co Ltd. So the IDC report Reuters cites that sizes investment in Chinese digital health as $5.6 billion by 2017 seems low for current activity–and the potential represented by China’s geographic size, population and demographics.

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