First e-Commerce, now Hospitals, Alibaba is changing lives in China

Written by Fiona Zhao || 03 Jun 2014

After setting up its strategy as “All in Mobile E-Commerce” at the beginning of this year, Alibaba has been gradually building up its Online2Offline business - now focusing on healthcare. 

The company first acquired AutoNavi Holdings Limited (“AutoNavi”), a mapping company and then purchased shares of Intime Retail (Group) Company Limited (“Intime Retail”), owner of department stores and supermarkets.

On May 28th, Alipay, Alibaba’s third-party payment service, announced the launch of “Hospital of the Future” plan. Alipay Wallet, a mobile App, is the centerpiece of the service which is planned to be implemented in three phases.

The first stage is to utilize Alipay Wallet platform to assist hospitals to establish a mobile medical service system. Using the system, patients can make appointments, receive diagnosis, make payments, pick up reports and interact with doctors via Alipay Wallet. Zhao Liansheng, the medical industry product manager in Alipay, commented that the direct effect will be saving patents’ time normally spent on payment and queuing at hospital. Moreover, Alipay’s data analysis technology could solve a unique local problem where scalpers grab queue numbers to sell to patients. Additionaly, Alipay will provide technical support including Wi-Fi services and indoor positioning services to guide patients for diagnosis, examination, payment and medicine disctribution. Currently, Alipay has reached intent of cooperation with over 10 Third-Grade A-Level hospitals in cities like from Beijing, Shanghai and Guangzhou. Among those, two hospitals have already entered in to the testing stage.

The second stage involves deeper penetration into medical services by completing prescription online; providing remote drug delivery and timely medical insurance reimbursement, which might take 3-5 years. The last stage is to cooperate with medical institutions and governments’ healthcare departments to build up healthcare management platform based on big data. It will take another 5-10 years, according to the plan.

Alibaba’s efforts will certainly help hospitals to enhance their IT systems, but Alibaba's main intent is likely to further establish its O2O business. In the mobile App era, smart phones have changed peoples’ habits dramatically. As people rely on smart phones more and more, the first question for e-commerce players is how to discover mobile users and gather them. When compared with its competitor—Tencent, who holds over 400 million Wechat users, Alibaba seems to be in a weak position. However, its “Hospital of the Future” plan is quite smart and could be a massive opportunity as hospitals have a large patient base. Also, if implemented successfully, Alibaba’s big data technology will provide amazing benefits for healthcare seekers.

However, China’s medical reform has been slow and the company will definitely meet challenges in implementing the "Hospital of the Future" plan. In addition to setting up partnerships with the hospitals, certainly Alibaba will need to be working with the regulators and government too. 

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