By Dr. Edward Tse and Jason Zhang
May 4, 2017
Aging societies are driving growth in innovation and new business models
China’s health care industry is infected. Not with some lingering malaise, but with a passion for high technology that promises a cure for the problems of a rapidly graying population.
The widespread application of advanced technology, such as artificial intelligence, big data and the internet of things (IoT), is transforming how the country views health care.
With the largest online population in the world, a vibrant startup and venture capital ecosystem, and growing demand for healthy lifestyles, China has seen explosive growth in both technology and innovative business models. The numerous problems with health care — lack of qualified doctors, disparity in distribution, and inefficient hospital operations, to name a few — are actually seen as sources of opportunity by a new generation of players.
But given the dynamism of China’s market and abundance of disruptive technology, incremental strategy is no longer sufficient for companies to succeed in this environment. Traditional competitors are being tested, and new types of players are constantly emerging.
The winners will be companies that develop game-changing strategies by challenging business-as-usual assumptions. These companies leverage technologies to develop radically new solutions that address major problems. In this way, they create paradigm shifts by exploring new markets and finding new ways to compete.
A number of Chinese startups have established themselves in the connected health arena, which fuses IoT technologies with the traditional health care sector. For example, WeDoctor, an online portal, focuses on hospital appointment services. Ali Health, a subsidiary of Alibaba Group Holding, is now a leading pharmaceutical e-commerce platform. And Chunyu Doctor provides a telemedicine platform for remote doctor consultation.
These companies have adopted an incremental strategy to alleviate problems in the health care industry.
The game-changers, however, are those like Shenzhen-based iCarbonX. The company has teamed up with seven other technology companies around the world to gather different types of health data; everything from metabolites and bacteria to sleep hours, fatigue and pain levels. It then uses AI to sift through the data. Based on the analysis, a digital avatar will tell the user what to eat, when to sleep and what activities they should be doing. Established in 2015, the company has raised $600 million in funding, as investors zero in on precision medicine, precision nutrition and other extended preventive measures.
Zhejiang POCTech Medical Corp. is also an interesting company to watch. It has developed a wearable device that enables continuous glucose monitoring. Using biosensors that gather information through 3,000 sensor data points updated every three minutes, the device allows doctors to diagnose and treat diabetes patients more accurately. China is the world’s largest market for diabetes-related medical products.
Source: Zhejiang POCTech Medical Corp. website
TAKING ON THE WORLD
After decades of its one-child policy, during which life expectancy rose and fertility rates fell, the country will soon find itself with more seniors than it can adequately care for. But China’s rapid embrace of a technological revolution in health care offers a rich breeding ground for a range of technology innovations that could have global significance.
Being aware of the many opportunities ahead, Chinese entrepreneurs will remain overwhelmingly positive. As Wang Jun, the founder and CEO of iCarbonX, said: “We represent a new model of an international Chinese organization. China has a legitimate shot to be a lead player on the international stage. Our technology can change the world.”
Edward Tse is founder and CEO of Gao Feng Advisory Co., a global strategy and management consulting firm, and the author of “China’s Disruptors.”
Jason Zhang is a Senior Associate of the firm.