JD Health Expands Offline Presence Amid Strong Online Growth to Drive Integrated Healthcare Ecosystem

At this year’s Partner Conference, JD Health presented an impressive performance report. Xin Lijun, Vice President of JD.com and CEO of JD Health, announced that JD Health’s revenue reached RMB 8.8 billion in the first half of 2020, representing a 76% year-on-year increase.

JD Health has continuously strengthened its online business operations. In the first half of 2020, JD Health’s average daily number of online consultations increased sixfold compared to the same period in 2019. As of June 30, 2020, JD Health had reached 72.5 million annual active users, with more than 65,000 registered physicians on its platform. According to a report by Frost & Sullivan, JD Health became China’s largest online healthcare and medical services platform and online retail pharmacy by revenue in 2019.

Given the growth of our online business and the remarkable achievements attained,JD Health has reaffirmed its commitment to accelerating the digital and intelligent transformation of the healthcare industry. The company stated that it will further deepen its offline business operations, continuously advance omnichannel development, and intensify efforts in penetrating lower-tier markets. JD Health aims to achieve symbiotic growth and collaborative development with its supply chain partners.

Xin Lijun, Vice President of JD.com and CEO of JD Health

Zhang Yuhui, Deputy Director of the Health Development Research Center of the National Health Commission, stated at the conference that, according to calculations by the Health Development Research Center of the National Health Commission, “In 2018, the total scale of China’s health service industry (value added of the health industry) reached RMB 6.3698 trillion, a 12.4% increase from 2017, accounting for 7.08% of GDP.”

In contrast to industrial research data, Zhang Yuhui emphasized, “This figure has undergone rigorous accounting and is accurate data based on GDP accounting.”

He also pointed out that the target set forth in the Outline of the “Healthy China 2030” Plan—namely, for the total scale of China’s health service industry to exceed RMB 8 trillion by 2020—required an average annual growth rate of 12.2% from 2018 to 2020. “Currently, although affected by the epidemic, a growth rate of 12.9% can still be achieved this year,” fully meeting the target. This also underscores the broad market prospects for the health service industry.

Xu Lei, CEO of JD Retail Group, also stated that driven by the trend of consumption upgrading, increasingly fragmented, diversified, and personalized consumer demands—characterized by the ability to purchase anytime, anywhere, and at will—have created a multitude of new consumption models and scenarios. Technological advancements are facilitating the digital transformation of commerce, while the normalization of epidemic prevention and control measures has further accelerated the digital and intelligent development across various industries. Favorable policies supporting “Internet + Healthcare” are also continuously propelling the industry forward.

The digital transformation and upgrading of the broader health industry are driving changes in the scenarios, channels, and models of healthcare services, ushering in new development opportunities for the sector.Xu Lei stated, “This will enable the scale of China’s health and wellness industry to exceed RMB 10 trillion in 2020, and it will continue to maintain rapid growth for a considerable period of time.”The Frost & Sullivan report further points out that the market size of China's big health industry will reach 21.8 trillion yuan in 2030.

Currently, JD Health’s core businesses encompass the pharmaceutical supply chain, internet healthcare, health management, and smart healthcare. In the pharmaceutical supply chain segment, it engages in the retail and wholesale of pharmaceuticals, medical devices, and general health-related products. The internet healthcare segment primarily focuses on patient needs, offering medical services such as online appointment scheduling and online consultations. The health management segment provides users with family doctor services, as well as consumer healthcare services including physical examinations, medical aesthetics, dental care, genetic testing, and vaccine appointments. The “Smart Healthcare” segment mainly serves hospitals, government agencies, and other partners by providing informatization and intelligent solutions to facilitate the interoperability and sharing of medical and health information.

Bullish on the highly promising healthcare industry, JD Health will continue to accelerate improvements in the quality of medical and healthcare supply and service standards, thereby contributing to the health of the nation.

From the early stages of its development, JD Health has prioritized omnichannel infrastructure, collaborating with partners to establish a comprehensive omnichannel service system and setting a benchmark for the transformation of pharmaceutical and health product supply chains. Having become the largest online medical health platform and online retail pharmacy, JD Health’s next strategic focus is to strengthen offline omnichannel capabilities, thereby meeting consumers’ demand for convenient, on-demand access to health products and services anytime and anywhere.

Offline,JD Health, through its self-operated JD Pharmacy, JD Health Alliance Pharmacy, and unmanned medicine vending machinesTo provide users with convenient, high-quality supply chain and medical services, meeting the differentiated needs of consumers.As of the first half of 2020, its O2O service “JD Medicine Express” covered more than 200 cities, with delivery available within 30 minutes.Meanwhile, leveraging JD Group’s advantageous supply chain infrastructure network, JD Health provides rapid delivery services that meet users’ personalized needs through 11 pharmaceutical warehouses and over 230 other warehouses.JD Health has even achieved same-city delivery in over 100 cities., expanding the range of pharmaceutical products while continuously improving fulfillment efficiency.

Meanwhile,JD Health covers a broad range of health-related products, including both pharmaceuticals and non-pharmaceutical items such as medical devices, health supplements, and nutritional tonics, through its retail and wholesale operations.While improving the pharmaceutical supply chain,JD Health is also ramping up its efforts in novel and specialty drugs for critical care by launching a dedicated platform for such medications,Multiple innovative specialty drugs from various multinational pharmaceutical companies have made their global debuts on JD Pharmacy.JD Health has also launched a category for traditional Chinese medicine (TCM) decoction pieces, establishing the first multi-dosage-form service platform for TCM decoction pieces across the entire internet., initiating the digital transformation of traditional Chinese medicine and providing users with decoction and home delivery services.

Currently, the JD Health platform hasWith more than 9,000 third-party merchants, the platform comprehensively supplements its offerings with new specialty drugs, cross-border health supplements, medical devices for critical care, injectables, traceable tonic products, and medications for rare diseases. This provides users with a rich variety of pharmaceutical products and creates a synergistic complement to its self-operated business.

In the process of building an omnichannel infrastructure, JD Health has delivered an integrated online-to-offline service experience to users. Its omnichannel layout across the pharmaceutical supply chain has enabled JD Health to continuously collaborate with B-side partners to co-build an ecosystem, further expand its business scale, and diversify its pharmaceutical product offerings while maintaining high quality and competitive pricing. This approach has earned user trust and fostered the healthy development of its ecosystem.

JD Health has identified the “third pole” of growth in the primary healthcare market through continuous deepening efforts, expanding its business by steadily tapping into lower-tier markets. To address the inherent shortcomings of primary healthcare—namely, inadequate diagnostic and treatment capabilities at the grassroots level and the propensity for disruptions in the pharmaceutical supply chain—JD Health leverages its accumulated advantages in medical resources to empower these sectors and enhance the service capacity of primary healthcare.

In enhancing medication management at the primary care level, JD Health focuses on improving pharmaceutical supply chain efficiency and accessibility to high-quality medicines.Currently, JD Health has established in-depth collaborations with a large number of high-quality pharmaceutical manufacturers across China. Targeting primary care settings, it introduces superior product portfolios and leverages internet-based solutions to achieve efficient matching of information and resources, thereby directly reaching the grassroots healthcare market.Particularly for new and specialty drugs, which previously faced significant barriers to entering primary healthcare settings and required lengthy periods to reach these levels, collaboration between JD Health and pharmaceutical manufacturers will greatly accelerate this process.

Through Yaojingcai, a pharmaceutical wholesale platform connecting over 170,000 terminals (including tens of thousands of primary care clinics and village health rooms), JD Health provides integrated, full-category, end-to-end, and omni-channel services.Primary care clinics can enhance supply chain efficiency, improve medication quality, and reduce drug prices through the Yaojingcai platform. Leveraging its technological strengths and internet healthcare capabilities—such as SaaS, cloud computing, big data analytics, and remote consultations—JD Health empowers primary care medical institutions, continuously elevating the standards of grassroots health management and clinical care.

in lower-tier marketsCounty-level pharmacies play a highly distinctive role. In addition to empowering them through the Yaojingcai platform, JD Health is also leveraging its own supply chain and medical service capabilities to establish the “JD Health–Alliance Pharmacy.”JD Health focuses on the county-level market, empowering offline retail pharmacies with supply chain, big data, and technological capabilities to continuously enhance their operational efficiency and patient service levels.

At the recent partner conference, JD Health launched the “JD Health 11.11 Family Care Initiative.” Fan Hui, General Manager of Marketing and Operations at JD Health, stated, “The launch of the ‘JD Health 11.11 Family Care Initiative’ responds to users’ online health management needs by expanding service coverage from individuals to families, and rewards user choice through preferential policies.”

“JD Health 11.11 Family Care Initiative” will combine JD Family Doctor, JD Home Medicine Chest, home medical devices, family health and wellness products, whole-family health checkups, and vaccines to deliver a “Family Care Gift Package” to users. Through this initiative, JD Health addresses health needs within the household setting by offering a diverse range of products and services, thereby creating greater opportunities for collaboration with its partners.

The rapid development over the past year demonstrates that,Leveraging JD Health’s base of 400 million active users on the JD.com platform, the company not only provides its partners with new collaboration models and scenarios but also offers brand merchants a one-stop marketing service suite that includes online premieres for new products, patient education live streams, physician training and education, co-branded products with renowned doctors, and C2M (Consumer-to-Manufacturer) solutions.JD Health will also pursue symbiotic growth and collaborative development with its supply chain partners as it continuously advances omnichannel construction and expands into lower-tier markets.