Aichong Doctor Files for IPO: Bridging C2B in China's Booming Pet Healthcare Market

In the pet healthcare industry, a single trick is no match for a comprehensive strategy.

How Can Platform-Based Companies Survive? This Has Always Been a Major Test for Startups. When Applied to the Pet Healthcare Industry, Which Has Gained Significant Attention in Recent Years, the Question Becomes Even More Pressing.

According to data provided by VBInsight, the pet market represents a substantial opportunity. In 2015, the market size of China’s pet industry exceeded RMB 100 billion, and it is projected to surpass RMB 220 billion by 2020. Within this sector, the pet healthcare market accounts for more than 30%, with its market size expected to exceed RMB 70 billion by 2020.

The market is vast, with numerous entrants. Since 2014, the number of veterinary hospitals in China has surged from over 6,000 to more than 13,000 in 2017, representing an annual growth rate of nearly 30%. The number of veterinary hospitals in China is projected to exceed 30,000 by 2020.

How to carve out a share of the market amid increasingly fierce competition remains an ongoing challenge for players in the pet healthcare industry. Against this backdrop, Ai Chong Yi Sheng (Pet Doctor), which has been operating in the industry for nearly four years, initially entered the pet hospital sector through online lightweight consultations and gradually diversified its offerings to include “Ai Chong SaaS,” “Ai Chong Procurement,” “Ai Chong Installment Payments,” and “Ai Chong Academy.” As a result, it has emerged as a one-stop service platform for China’s pet healthcare industry.

In a rapidly evolving market, how can companies identify the right strategic direction and achieve sustainable growth through effective business models? iPet Doctor has provided a methodology worthy of reference. This has also led to an expanding list of investors for iPet Doctor, which has completed four rounds of financing, attracting backers such as Probes Fund, Shanghai CICC Capital, Puhua Capital, and Mengdian Assets.

Ma Qian, founder and CEO of Aichong Doctor, began his career as a product manager at the 2345 Mobile Reading platform, embodying the quintessential internet professional.

Driven by his love for pets, Ma Qian volunteers in pet-related activities during his spare time. Through this experience, he identified significant information asymmetry in the pet healthcare market. First, when pets fall ill, pet owners struggle to identify reliable veterinary clinics due to inconsistent management practices across offline animal hospitals and considerable variations in diagnostic feedback from veterinarians. Second, lacking essential knowledge of pet healthcare, pet owners are unable to discern the vast and complex information available online, often resulting in delays in receiving optimal treatment for their pets.

“It was precisely because we identified this gap in the market that we founded Ai Chong Yi Sheng (Pet Doctor). Initially, our positioning was somewhat akin to ‘Chunyu Doctor’ for the pet industry: based on users’ LBS data, the platform displays nearby veterinary clinics, allowing users to seek online consultations. Professional veterinarians conduct the consultations, enabling rapid and accurate assessment of pets’ health conditions,” Ma Qian told VCBeat.

Pet Doctor Wins Grand Prize at the 3rd “i-Chuang Cup” Internet Innovation and Entrepreneurship Competition(Image provided by the interviewee)

To address the difficulties pet owners face in locating veterinary clinics, Ai Chong Yisheng has established connections with pet hospitals. On the Ai Chong Yisheng platform, users can locate nearby pet hospitals based on LBS (Location-Based Services) and directly contact veterinarians.

In just about a year, the Aichong Yisheng platform has onboarded more than 5,000 certified veterinarians, partnered with over 3,000 veterinary hospitals across more than 100 cities, and attracted over 500,000 registered pet owners on its consumer-facing side, making for highly impressive figures.

However, the platform nature of online consultations largely determines the ceiling of Aichong Doctor’s commercial value. In response, Ma Qian decided to target B-end users as the future direction of the platform.

“For pet hospitals, their core pain points are nothing more than ‘revenue generation’ and ‘cost reduction.’ The online lightweight consultation platform provided by Ai Chong Yi Sheng has effectively addressed the ‘revenue generation’ challenge for pet hospitals. Therefore, at that time, our focus was on how to help them achieve ‘cost reduction,’ namely, assisting them in minimizing time and financial costs to the greatest extent possible.”

Based on this, AiChong Doctor has successively launched the following platforms: an intelligent SaaS management system for veterinary hospitals—AiChong SaaS; a supply chain finance service platform for veterinary hospitals—AiChong Installment; a one-stop B2B procurement platform for the pet industry—AiChong Procurement; and a professional training platform for veterinarians—AiChong Academy.

By establishing a closed-loop business model, Ai Chong Doctor has unblocked critical operational bottlenecks in the pet healthcare sector, thereby expanding the boundaries for future growth. This has laid the foundation for Ai Chong Doctor to later capitalize on the rising tide of the “pet healthcare” industry, continuously gaining favor from both investors and users.

With the direction clearly identified, profitability becomes the key.

“Pharmaceutical supply and supply chain procurement installment financing services are currently the two main revenue streams for Ai Chong Yisheng,” said Ma Qian. “Ai Chong Yisheng’s services primarily target independent veterinary clinics. Compared with chain veterinary hospitals, independent clinics are more numerous, growing at a faster pace, and hold relatively weaker bargaining power across the upstream and downstream segments of the industry chain. Leveraging several years of accumulation, our platform has amassed extensive user demand data, which provides strong guidance for optimizing our services for independent clinics.”

According to data from relevant industries, the primary sources of material procurement for veterinary hospitals are small-scale distributors in various cities. For chain veterinary hospitals, benefits derived from economies of scale and standardization result in lower time and capital costs for procurement compared to independent veterinary hospitals. Independent veterinary hospitals, lacking bargaining power, often face challenges such as complex procurement processes, disordered pricing structures, and slower logistics.

To this end, AiChong Doctor has established a centralized procurement platform for independent veterinary clinics, which not only enhances their bargaining power with upstream suppliers but also reduces their overall procurement costs.

In addition to aggregating individual pet hospitals to achieve economies of scale and reduce costs, Ai Chong Doctor has recognized that single pet hospitals, due to their varying financial strengths, often struggle to make upfront purchases of relevant medical equipment. To address this challenge, Ai Chong Doctor has partnered with third-party financial service providers to offer installment financing solutions, thereby alleviating this issue to a certain extent.

After addressing the pain points of single-location veterinary clinics, how does Ai Chong Yi Sheng generate revenue from these services?

Industry media reports indicate that the gross profit margin for veterinary medical equipment generally ranges from 15% to 20%. If customers purchase equipment through installment payments, Aichong Yisheng’s gross profit margin stands at approximately 10% after deducting bank interest. For domestically produced pharmaceuticals and consumables, the gross profit margin from ex-factory price to hospital selling price is typically 50%–60%, while imported pharmaceuticals generally yield a gross profit margin of 30%–40%. Currently, the average gross profit margin on Aichong Yisheng’s procurement platform is around 25%.

As Ai Chong Doctor continues to expand its coverage and aggregate more individual veterinary clinics, the scale effects of its centralized procurement model will gradually increase its future gross profit margins.

“The pet healthcare market is still evolving, with a growing number of aspiring and professional veterinarians in need of more specialized knowledge and skills—a significant untapped market opportunity. Aichong Academy will provide them with training in these areas, which will also become a key revenue stream for Aichong Doctor.” Ma Qian is undoubtedly confident in Aichong Doctor’s ability to generate sustainable internal growth.

Ma Qian, Founder of Ai Chong Doctor(Image provided by the interviewee) 

According to official data from AiChong Doctor, the platform has partnered with over 10,000 veterinary hospitals and onboarded more than 20,000 veterinarians, covering over 200 cities across China. It collaborates with more than 300 manufacturers, offers over 5,000 types of veterinary hospital products, and has achieved a gross merchandise volume (GMV) of RMB 300 million on its sales platform.

Backed by a community of tens of thousands of veterinarians and over two million pet owners on its platform, iPet Vet has amassed sufficient data to support diverse business expansion opportunities.

Looking ahead, Ai Chong Doctor will continue to expand its brand empowerment model, providing independent veterinary clinics with a one-stop suite of services including brand licensing, interior design and renovation, SaaS systems, one-stop supply chain procurement, supply chain finance, and training and recruitment. This aims to build an ecosystem that combines an “offline asset-light chain of veterinary clinic brands” with an “online one-stop service platform for veterinary hospitals.” In simpler terms, any veterinarian looking to open a pet hospital can access everything they need—from branding and resources to operational services—through the Ai Chong Doctor platform.

Ma Qian stated, “Aichong Doctors is diligently strengthening its core competencies. We believe that only by solidifying our foundation can we deliver higher-quality services to our clients, thereby making our own contribution to the pet healthcare industry.”