Two Emerging Opportunities in Western China's Healthcare Startup Sector Highlighted in Recent IPO Filings

Based on the 2015 GDP data, it has become increasingly difficult for China’s overall consumption growth to sustain double-digit high-speed expansion. However, the pharmaceutical and healthcare consumption segment was the only consumer sector to achieve double-digit growth, with its increase nearly equaling the combined growth of all other sectors. This indicates that China’s consumption structure is currently undergoing optimization. Healthcare consumption, previously a market weakness, is experiencing breakthrough growth driven by the development of the internet.

By the first half of 2016, the sector’s popularity—“unexpected yet understandable”—continued to rise rather than wane, with total investment approaching RMB 14 billion.

According to VCBeat’s compilation and analysis, China’s internet healthcare financing hotspots are divided into three tiers:

The first tier naturally consists of the first-tier cities—Beijing, Shanghai, Guangzhou, and Shenzhen—with their profound market foundations.

The second tier comprises the radiating peripheral areas of the first tier, primarily consisting of Zhejiang, Jiangsu, and Fujian provinces;

The third tier consists of resource-backed inland regions, primarily comprising provincial capitals in central and western China such as Wuhan, Chengdu, Chongqing, Xi’an, and Guizhou.

Currently, platform-based companies that secured substantial early-stage financing have yet to achieve comprehensive coverage of regional markets, particularly in terms of multi-dimensional and in-depth control. In cities such as Chengdu, Chongqing, Xi’an, and Wuhan, VCBeat has observed that some relevant companies are deeply cultivating their local markets, establishing a favorable development trajectory. This may present a strategic opportunity for regional platforms over the next one to two years.

The key financing hotspots in the third tier primarily exhibit two major characteristics:

1. Government Support: The government encourages innovation and entrepreneurship by relaxing policies and providing supportive resources, with particularly significant support for domestic companies. For example, regions such as Chongqing and Guizhou have established smart health industrial parks and designated national-level economic new areas.

2. Clear Demand: Local companies have an accurate grasp of the pain points in the local medical market and a clear product direction. Compared with branches of listed companies, these companies demonstrate stronger drive and are more likely to gain market recognition.

From this perspective, the Internet is broadening the horizons of innovation and entrepreneurship among third-tier players, who are breaking down barriers and rapidly entering a path of high-efficiency growth through learning and replication.

Amid the prevailing narrative of a “capital winter,” VCBeat has consistently focused on Western China as a key region.

To this end, the Fosun “InnoStar” Global Innovation Contest, co-hosted by Fosun Tonghao, VCBeat, Yunji Technology, and Weilian, will be held in Xi’an and Chongqing. Concurrently, VCBeat’s flagship event, the Future Healthcare City Forum, will also take place.

This competition aims to discover global entrepreneurial elites and provide investment and incubation services for outstanding startup projects, while also seeking to build a major platform that showcases the new entrepreneurial thinking of Western China to the world.

We focus on healthcare startups targeting the Western China market, including those in intelligent technologies, biotechnology, innovative models of medical services, and innovative applications of medical devices.

Time: Tuesday, September 13, 2016, 13:30–17:30

Location: To be announced

Event Registration:

Scan the QR code to register for the on-site event.

(Reserved for attendees only)

Scan the QR code to register for the Innovation and Entrepreneurship Competition.

(This channel is exclusively for participant company registration)