Amid Recent Strategic Moves, What Drives Jianke's CEO Xie Fangmin?

Recently, the pharmaceutical e-commerce platform Jianke in ChongqingSigned a cooperation agreement with the Jiulongpo District Government at the “Chongqing Investment and Trade Fair,” announcing plans to establish a physical hospital in the area and build an internet-based+Chronic Disease Management Center. In addition, Jianke will establish its Southwest Operations Center in Chongqing, with plans to build a scale500Human Chronic Disease Service Call Center and Warehousing Center.

In just these two months, Jianke has frequently released announcements, first disclosing a $50 million Series A+ financing round, then announcing that its subsidiary had obtained the Class A license for online drug transaction services (pharmaceutical e-commerce), and completing the acquisition of Wuhan Xiongchu Hospital.

A steady stream of positive developments has also sparked external speculation about Jianke’s strategic intentions: What exactly is the company aiming to achieve, and does it have a clear timeline and roadmap? In light of these questions, VCBeat recently conducted an exclusive interview with Xie Fangmin, CEO of Jianke.

Xie Fangmin, CEO of Jianke

Online pharmaceutical e-commerce is the primary label associated with Jianke. As the first online pharmacy in Guangdong Province to obtain the necessary qualifications, Jianke secured the Class C Certificate for Internet Drug Transaction Services as early as 2009, formally entering the pharmaceutical e-commerce sector.

After nearly eight years of development, Jianke has become a leading enterprise in China's pharmaceutical e-commerce sector. In terms of business scale, Jianke operates 18 offline pharmacies and multiple DTP (Direct-to-Patient) pharmacies, with annual sales exceeding RMB 1.5 billion in 2016, representing a 50% increase from 2015.

Xie Fangmin himself is a widely recognized figure in the pharmaceutical e-commerce sector. The competitive factors he proposed—“technology, supply chain, management, and talent”—have sparked extensive discussion within the industry and have even become one of the evaluation criteria for ranking pharmaceutical e-commerce companies.

However, since the launch of “Jianke Doctor,” Jianke’s exploration in the healthcare sector has never ceased. Why did Jianke venture into healthcare, and why did it choose to do so through the most “asset-heavy” models, such as acquisitions or building its own infrastructure?

Xie Fangmin stated to VCBeat that medical services and pharmaceutical consumption are inherently inseparable, as pharmaceutical consumption cannot exist independently of medical services. Jianke’s goal is to provide users with a reliable smart health service platform, which undoubtedly integrates both pharmaceuticals and healthcare. Although Jianke had previously made attempts in the medical sector, large-scale promotion was not pursued due to various constraints.

“Healthcare and pharmaceuticals are like the two eyes of Jianke. Previously, our focus was on the pharmaceutical sector; over the next five years, we will prioritize the development of healthcare-related services, making healthcare the other eye of Jianke,” said Xie Fangmin.

Based on Jianke’s publicly disclosed strategic layout, medical services are indeed its recent focus. For instance, in March this year, Jianke announced the completion of its acquisition of Guangzhou Baiyun District Jingtai Hospital, exploring the “Internet + Hospital” model. In May, Jianke further announced its acquisition of Wuhan Xiongchu Hospital. Coupled with the recently announced investment to build a “Digital Hospital” in Chongqing’s Jiulongpo District, Jianke has now solidified its physical hospital footprint with three facilities in place.

According to Xie Fangmin, Jianke aims to establish six physical hospitals across China this year, with locations including Beijing, Guangdong, Hubei, and Hainan.

“All plans have either been initiated or implemented; however, we will not make any public announcements until everything is fully confirmed. This reflects our down-to-earth approach to healthcare,” said Xie Fangmin. He added that Jianke’s strategy for establishing physical hospitals is progressing steadily, and details will be disclosed gradually based on actual implementation progress.

Why physical hospitals? Xie Fangmin has his own perspective. He stated that the "Administrative Measures for Internet Healthcare (Trial) (Draft for Comments)," which leaked in May this year, serves as a strong warning to companies deploying "Internet + Healthcare" strategies. As Jianke explores internet healthcare, it will strictly adhere to regulatory requirements.

Xie Fangmin stated, “The future of internet healthcare must rely on physical entities to achieve long-term development, and Jianke’s layout in internet healthcare will not depart from the support of brick-and-mortar hospitals.”

However, acquiring or building physical hospitals also entails high costs. Xie Fangmin stated that Jianke does not prioritize the profitability of physical hospitals; rather, it values their medical resources and the ability to address electronic prescription issues by leveraging these physical facilities.

In terms of medical resources, taking Jingtai Hospital in Baiyun District as an example, VCBeat’s experience with the “Jianke Doctor” platform revealed that physicians from this hospital are already providing medical consultation services on the platform, which can be regarded as a full utilization of medical resources. Xie Fangmin has previously noted that medical resources in internet healthcare will certainly not be provided by doctors from large hospitals, but rather by those from smaller hospitals. Doctors at smaller hospitals have both the capability and the time to provide online consultations for users, thereby fully leveraging their professional value.

Furthermore, the profitability of internet healthcare remains under exploration. Securing qualifications for electronic prescriptions and integrating them with pharmaceutical e-commerce to establish a value link between medical services and drug dispensing could represent one of the viable profit models for internet healthcare.

A week ago, Jianke announced that its subsidiary had obtained the Class A license for pharmaceutical e-commerce, indicating that Jianke may have the capability to build a third-party B2B pharmaceutical e-commerce platform. Meanwhile, Jianke has become one of the few enterprises holding all three licenses—Class A, B, and C—for pharmaceutical e-commerce.

Although the State Council announced earlier this year the cancellation of qualification reviews for B and C licenses in pharmaceutical e-commerce, the A license retains its significant value. According to data from the China Food and Drug Administration (CFDA), as of the end of May, only 43 enterprises held an A license for pharmaceutical e-commerce. Moreover, there are only about 10 active B2B pharmaceutical e-commerce platforms in the market. In other words, Jianke has secured a highly valuable entry ticket.

We have observed that a core keyword in Jianke’s “Internet + Healthcare” strategy is “chronic disease management.” Why does Jianke emphasize chronic disease management, and is this related to its business operations?

Xie Fangmin stated that pharmaceutical consumption related to chronic diseases constitutes a significant portion of overall healthcare expenditure. Taking Jianke as an example, patients with chronic diseases or repeat purchasers of chronic disease medications account for more than 90% of Jianke’s total user base. Therefore, Jianke’s exploration of “Internet + Chronic Disease Management” is a strategic move aligned with market trends.

Furthermore, the "Internet Plus" model for chronic disease management aligns closely with national policies. For instance, medical insurance cost-containment policies mandate a prevention-first approach, emphasizing early detection and treatment as well as therapeutic interventions to prevent disability, thereby reducing expenditures on chronic disease care. The "Healthy China 2030" initiative also calls for the full utilization of internet-based tools and information technology in chronic disease management to control the incidence of chronic diseases.

Currently, many chronic disease management programs lack a foundation in physical medical resources and even contradict the principles of evidence-based medicine. Similar to “Internet+ Healthcare,” “Internet+ Chronic Disease Management” requires practical implementation to optimize management standards. Jianke’s promotion of an “Internet+ Chronic Disease Management” model based on offline hospitals represents a commendable attempt.

Meanwhile, internet-based healthcare services are prohibited from conducting initial consultations. By integrating with physical medical facilities, initial consultations can be conducted offline, followed by offline follow-up visits, thereby reducing the time cost of seeking medical care and improving healthcare efficiency.

Xie Fangmin also mentioned that Jianke is exploring an inter-hospital “telemedicine” initiative, collaborating with top-tier hospitals and physician groups to conduct remote consultations among the medical institutions and physician groups in Jianke’s network. This allows patients to access care without traveling to first-tier cities or other areas with concentrated medical resources, thereby reducing healthcare costs.

He also emphasized that telemedicine was originally stipulated to be used solely for remote consultations between medical institutions. By establishing a linkage between hospitals and physician groups, this approach not only achieves the goal of remote consultations but also complies with policy requirements.

Therefore, taken as a whole, after consolidating its leading position in the pharmaceutical e-commerce sector, Jianke has progressively deepened its exploration of healthcare services, aligning with regulatory requirements and addressing genuine challenges within the medical field. The model advocated by Jianke—characterized by the parallel, dual-track development of pharmaceuticals and healthcare—offers valuable reference insights for the “Internet + Healthcare” sector.