Mengge Health: A C2M-Driven Digital Health Platform Poised to Disrupt China's Internet Healthcare Market

Internet Healthcare Gains a New Force.

Huayi Tencent Entertainment (00419.HK) released its 2022 interim results report on August 30. The report showed that in the first half of this year, Huayi Tencent Entertainment achieved revenue of approximately HK$673 million, a year-on-year increase of 267%. Among this, Mengge Health, the company’s flagship health management platform, contributed HK$346 million in revenue, driving Huayi Tencent Entertainment’s transformation of its core business from film and television entertainment to the medical and healthcare industry.

Mengge Health may still be an unfamiliar name to most healthcare professionals. Founded in July 2021, the company is dedicated to building a C2M innovative smart health service platform. C2M, which stands for “Customer-to-Manufacturer,” originated in the industrial internet sector. Its core principle is to connect consumers and manufacturers on the same platform, eliminating intermediate distribution channels and allowing production to be driven directly by consumer demand.

According to Dong Yu, founder and CEO of Mengge Health, the C2M model is equally applicable to the healthcare sector, or more precisely, to the health management segment. All products and services related to health management can reach users through the platform’s connectivity, following the same underlying logic.

“Mongoose Health is like a one-stop health hub, where users can easily purchase health supplements, book medical check-ups and vaccines online, and access health management services—just as simple as shopping at a mall—enabling continuous and effective personal health management.”

If you delve deeply into the business landscape of Mengge Health, it is hard to imagine that this is a company that has been established for just one year.

Mongoose Health comprises 12 subsidiaries, with business operations spanning the wholesale and retail of pharmaceuticals (primarily OTC), equipment leasing, consumables sales, vaccine and medical check-up appointment services, internet hospitals, medical software development, and personnel training. Within Mongoose Health, these subsidiaries are categorized into three major business segments: Health Consumption, Medical Services, and Health Management.

It is relatively straightforward to understand that pharmaceutical wholesale and retail, equipment leasing, and consumables sales fall under the health consumption segment. Currently, these physical transactions account for approximately 90% of Mengge Health’s revenue, representing the core business upon which the company was founded. Vaccine and medical check-up appointment services, along with internet hospital offerings, belong to the medical services segment. Targeting consumer-end (C-end) users, this segment emphasizes high-quality, standardized services and serves as the key focus of the company’s business expansion this year. Medical software development and personnel training are categorized under the health management segment, aiming to empower healthcare institutions and deliver more compassionate health management. This also aligns with Mengge Health’s long-term vision.

Dong Yu stated that she and the company’s senior leadership team spent a year building the business framework, guided by two unwavering principles. First, the company avoids “serious medical care” and focuses solely on “consumer healthcare.” In other words, Mengo Health targets not patients in the strict clinical sense, but users with health-related needs, including vaccination, medical check-ups, medical aesthetics, weight loss, skin management, and nutritional wellness. Second, no business line exists in isolation; instead, each follows commercial logic and creates mutual synergies.

“In each phase, one business segment must take the lead. For instance, in the early stages of a startup, consumer health products should be prioritized; they have a large market base and low gross margins, serving primarily to establish our brand presence within the industry. With a recognized brand, we can negotiate partnerships with medical institutions, at which point medical services should follow to address C-end user acquisition. Finally, armed with an established user base and partner institutions, we can reverse-engineer the supply chain based on user needs, thereby building our self-operated health management platform.”

In Mengge Health’s business logic, one can discern echoes of Babylon. Babylon is a UK-based digital healthcare company that primarily leverages information technologies such as artificial intelligence to provide health management services for users and reduce disease-related claim costs for insurers, thereby achieving a closed-loop business model. As a third-party service provider in health management, Mengge Health has developed a similar intervention system capable of assisting medical institutions in patient management through knowledge graphs, deep learning, and intelligent interaction.

Unlike Babylon, Mongoose Health not only empowers medical institutions but also extends upstream into the supply chain and has developed a self-operated health management platform downstream, thereby solving the problem of monetizing traffic. “We have observed that many health management companies in the market are largely unprofitable because they only address a single fragment of the process. In contrast, we cover the entire value chain. This may reflect the characteristic approach of internet professionals, as we retain a certain platform mindset,” said Dong Yu.

For a company that approaches health management with a platform-oriented mindset, the caliber of medical institutions it can secure as partners determines its growth ceiling. In Mengge Health’s strategic plan, prioritizing collaborations with large public tertiary hospitals is a established objective. Taking physical examination center partnerships as an example, Mengge Health’s intelligent digital solutions for health screenings have, to date, been implemented in 21 hospitals across 19 cities, with more than one-third of these being Grade A tertiary hospitals.

One of the most compelling cases is Tianjin First Central Hospital. As the largest single-site public hospital in China, Tianjin First Central Hospital has entered into a strategic partnership with Mengge Health. Mengge Health provides a range of products and services, including equipment leasing, software systems, and operational management. Together, the two parties will jointly build an intelligent system for health management centers, creating health management services that cover the entire patient lifecycle.

 Master Plan for the New Campus of Tianjin First Central Hospital: To Become China’s Largest Single-Site Public Hospital Upon Completion

Notably, Mengge Health has developed China’s first digital integrated MK Digital OS in the health examination sector, comprising Tianshu (Intelligent Management Portal System), Tianxuan (Smart Health Management CRM System), Tianji (Smart Examination Guidance System), and Tianhe (Health Examination OS System), providing one-stop services for modern internet-based health management centers. Hospitals can choose to purchase either the full suite of systems or individual subsystems.

According to data from pilot institutions, the adoption of Mangge Health’s comprehensive system increased customer service satisfaction from 40% to 80%, reduced the error rate in scheduling health check-up items from 10% to 0.9%, and lowered system operational costs to as little as one-ninth of those associated with manual processes. Meanwhile, the system supports the development of smart hospital services and the collection of clinical research data, laying a solid foundation for future scientific research initiatives.

Dong Yu stated that after nearly a year of operational implementation, the collaborative channel between Mengge Health and public hospitals has been validated. In the second half of the year, the “100-City Initiative” will be launched, expanding business coverage to more than 100 cities and hospitals. Meanwhile, Mengge Health will continue to deepen its collaboration with private specialized medical institutions in the consumer healthcare sector.

From Dong Yu’s perspective, the more partner institutions there are, the larger the user base becomes. A larger user base enhances the platform’s ability to feed back into and strengthen the supply chain, making it easier to establish standardized services. Taking vaccines as an example, most e-commerce platforms are only responsible for selling vaccines but not for scheduling appointments, resulting in high refund rates for vaccine sales on such platforms. In contrast, on the Mengge Health platform, users can precisely schedule their injection times at the point of purchase. If they are unable to receive the vaccination at the scheduled time, the platform provides additional compensation.

“You can view it as a manifestation of the C2M (Consumer-to-Manufacturer) model, where we leverage direct user engagement to drive reverse management of the supply chain. This operates on a fundamentally different logic than mere product sales. Healthcare is often service-oriented; if you approach health management with a retail mindset without integrating with the industrial end, that path is unsustainable.”

Health, a word that is increasingly valued.

The “Healthy China Action (2019–2030)” explicitly states that by 2030, the health literacy of the entire population shall be significantly improved, healthy lifestyles shall be basically universalized, major health determinants affecting residents shall be effectively controlled, premature mortality due to major chronic diseases shall be markedly reduced, and healthy life expectancy per capita shall be substantially increased.

Thanks to the support of national macroeconomic policies, the health management service industry is entering a period of robust growth. According to the "White Paper on Insights into Trends in China's Comprehensive Health Management Service Industry," the market size of China's health and wellness sector reached RMB 9 trillion in 2020 and is projected to grow to RMB 14.8 trillion by 2025, with a compound annual growth rate (CAGR) exceeding 10%.

It is well known that health management is a “silent” gold mine. However, challenges such as a mixed-quality market with difficult-to-distinguish authenticity, the lack of a standardized service system, inefficient offline management, and unclear business models have long hindered further progress by industry participants. Those who can systematically address these issues will break through the competition and secure the first share of this trillion-yuan market.

“We believe this is a rare opportunity. The three-year pandemic has prompted healthcare institutions to prioritize consumer healthcare and accustomed users to seeking health solutions online,” said Dong Yu. Since its inception, Mengge Health has built its business framework and commercial logic using internet-centric thinking. In her view, the external environment is now favorable, and the company’s strategic layout is complete; what remains is the validation of its business model.

As for whether she could succeed, she was far from certain. Healthcare has long been the last fortress for the internet to conquer, and health management is arguably the toughest nut to crack within it. Thus, despite the financial and brand backing from a publicly listed company, Mengge Health faced more skepticism than optimism in its early startup days. Dong Yu recalled that an industry expert once bluntly asked her, “This is a problem the world has failed to solve for over a century; what makes you think you can?” Her response was, “We can’t just give up because it’s difficult.”

She hopes that this spirit of rising to challenges will become ingrained in the company’s deepest DNA. Like the meerkat—a small but agile viverrid native to the African savannah, which dares to confront even the most venomous snakes with both courage and strategy—this quality is precisely what inspired the name “Meerkat Health.”

Returning to the company’s long-term strategic planning, Dong Yu established two KPIs for Mengge Health. The first is revenue-related, requiring an annual growth rate of over 100%; the second is more long-term in nature, aiming to develop into a leading company in China’s health services sector within three to five years.

At least for now, Mengge Health is still on the right track.