Three Major Challenges and Strategic Responses in Internet-Enabled Reproductive Healthcare Startups

/ By Wu Chong

As a fundamental mechanism for species propagation, the human reproductive system has nonetheless evolved to exhibit widespread dysfunction, affecting approximately 15% of the population. Entrepreneurship in “Internet + Reproductive Medicine” is a hot segment within the chronic disease management sector and remains a key focus of VCBeat.At present, the domestic “Internet + reproductive medicine” startups have actually launched two waves:

The first wave of mobile health apps focused on a broad health pathway of “tools–community–e-commerce,” which has limited relevance to the chronic diseases discussed in this article. Therefore, the following discussion will primarily center on second-wave products targeting infertility. It is worth noting, however, that first-generation period-tracking tools such as Dayima and Meiyou, each boasting hundreds of millions of female users, have effectively become massive traffic gateways for infertility-related services, making them unavoidable stakeholders for companies operating in the “Internet + Infertility” sector.What’s more interesting is that other internet healthcare companies driven by traffic are also targeting the infertility population. A typical representative is Chunyu International, incubated by Chunyu Doctor, whose key services include high-end overseas assisted reproductive technologies; it will also be a significant player in this space.

Back to the main topic, let’s discuss the triple challenges and strategic responses for startups in the infertility sector:

According to predictions by the World Health Organization, infertility is poised to become the third major disease category after cancer and cardiovascular/cerebrovascular disorders, and has already emerged as an epidemic in modern society. Data released in 2012 by the China Population Association indicated that individuals affected by infertility accounted for 12.5%–15% of the population of childbearing age in China, with an estimated 40 million people suffering from this condition. Medically, infertility is defined as the inability to conceive naturally within one year; a more precise term is “difficulty conceiving and bearing children.” The key takeaway is clear: if natural conception does not occur within one year, avoid futile self-directed efforts and consult a physician.

Although infertility has a high prevalence, most cases can be resolved within six months with persistent treatment. For patients with organic lesions, assisted reproductive technology (ART) is an option, primarily categorized into intrauterine insemination (IUI) and in vitro fertilization (IVF). Currently, the success rate of this treatment approach exceeds 30% in most hospitals. With advancements in medical technology, future success rates are expected to rise above 50%.

Combining the above two points, infertility is hardly considered a “favorable” chronic condition from the perspective of chronic disease characteristics: its course does not persist lifelong like diabetes or hypertension, and there are standardized treatment protocols with relatively high success rates.

The first wave of startups, such as Dayima and Meiyou, demonstrated strategic acumen by targeting menstrual health management—a domain spanning nearly half a woman’s life (approximately 40 years from menarche to menopause). This focus offers greater commercial value potential with faster monetization. In contrast, the second wave of startups has concentrated on the “hard” medical sector of infertility treatment, which carries stronger medical attributes (with founding teams primarily composed of healthcare professionals) and presents higher professional barriers. However, building reputation in this field is time-consuming. Moreover, while targeting the precise demographic of individuals facing infertility, the commercial value potential is narrower and realizes more slowly.

The reduction in audience size resulting from targeting precise users can be offset by high ARPU (Average Revenue Per User) values.Average Revenue Per User) to compensate. However, if the patient’s disease duration shortens to less than a year, entrepreneurs face the ongoing challenge of continuously acquiring new users and enhancing stickiness through added value. From another perspective, all Internet-plus healthcare initiatives should adhere to the original principle that “a good product is used and then left behind.” After all, one cannot expect users to remain ill indefinitely!

In this regard, a viable strategic response would be to elevate the focus from infertility treatment to eugenics and optimal child-rearing, thereby covering a longer customer journey and a broader scope. Currently, the second wave of enterprises is expanding from infertility services to scientific preconception care, extending their reach to the general health-conscious population served by the first wave of enterprises, while providing more comprehensive scientific guidance for preconception preparation beyond basic menstrual cycle management. If these services can further expand into scientific parenting in the future, their commercial value could be significantly amplified.

The core themes of chronic disease management are twofold: “Internet-based chronic disease management service providers (defining service standards, processes, and personnel) + chronic disease management insurance (distinct from critical illness treatment insurance).” The most critical issue in both areas is standardization: standardized service products and standardized insurance products. The former requires service providers to redefine services by integrating medical theories (along with multidisciplinary fields such as nursing and nutrition) with internet-based approaches; the latter relies on precise data to support actuarial development. Logically, without the customization of standardized services and the accumulation of data from the former, it is difficult to develop insurance products under the existing risk control framework. Therefore, it is predictable that investment opportunities will emerge first in Internet-based chronic disease management service providers, and subsequently in chronic disease management insurance.

If chronic disease management services are simply divided into in-hospital and out-of-hospital care, or alternatively, into expert-led clinical diagnosis and treatment versus standardized value-added services, Internet+ healthcare teams should focus primarily on out-of-hospital care. Specifically, they should determine: which services can be delivered online using low-cost digital tools? Which services can be provided through crowdsourced medical resources? And which services require high-cost, offline support? Ideally, the ultimate outcomes of these services should align with a few straightforward clinical indicators, such as blood glucose levels for diabetes, blood pressure for hypertension, and lipid profiles for hyperlipidemia. Currently, however, infertility lacks an intermediate surrogate marker, necessitating reliance on pregnancy as the definitive endpoint. Since confirming pregnancy requires at least six months of observation and involves numerous complex steps, this poses significant challenges to establishing standardized service protocols.Nevertheless, it is encouraging to note that infertility holds particular significance for high-end insurance clients. Even though service standards have not yet been fully accepted, insurers remain strongly motivated to pay for these services.

Chronic disease management inevitably involves changes in user behavior. Compared to chronic conditions such as diabetes, infertility has the advantage that users are more willing to modify their behaviors for the sake of treatment. The strong stickiness of menstrual tracking tools and the high activity levels on online forums further support this observation. The challenge across the field lies in determining how significant behavioral changes are to the ultimate therapeutic outcomes for infertility; currently, there is no empirical data to substantiate this. Validating direct medical efficacy requires lengthy clinical trials and substantial research costs. Therefore, a commercially viable strategy should focus on comparing the cost savings resulting from behavioral changes, given that a significant portion of infertility-related expenditures is wasted on delayed or incorrect treatments.

Overall, the lack of short-term indicators for infertility makes it difficult to establish value-added service standards effectively and rapidly, and there is currently no robust data supporting the impact of behavioral changes on the ultimate treatment outcomes for infertility. However, driven by insurers’ incentives and the advantage of reducing medical costs, the “Internet + Infertility” model can achieve faster development.

“Internet Plus” has one unchanging theme: traffic. Leverage mobile internet tools to capture users, then distribute traffic outward to achieve growth.value returns. At this stage, the traffic for “Internet + Infertility” is facing challenges:

Front-end traffic is dominated by platforms with hundreds of millions of users, such as Dayima, Meiyou, and BabyTree; acquiring traffic through offline channels is prohibitively expensive and therefore not a viable option.

Patient traffic allocation is monopolized by public medical institutions holding a limited number of licenses, forcing monetization efforts to target overseas markets. For high-ARPU customers worth hundreds of thousands, competition is fierce amid scarce supply.

Infertility care has emerged as a promising entrepreneurial opportunity within the “Internet + Healthcare” sector, largely due to the deregulation of pricing for assisted reproductive technologies (ART), which lends direct monetization potential to its traffic value. However, at the current stage, market-oriented pricing is the extent of this liberalization. Since service providers are predominantly part of the public healthcare system and their qualifications are constrained by licensing requirements imposed by the National Health and Family Planning Commission, the market-oriented nature of these services remains somewhat limited.

As of December 31, 2012, there were a total of 356 institutions in China approved to provide human assisted reproductive technology (ART) services. In recent years, most local governments have not approved any new ART institutions. Among these, 342 institutions are authorized to perform AIH (artificial insemination with husband’s sperm), 215 offer IVF-ET (in vitro fertilization and embryo transfer), 211 provide ICSI (intracytoplasmic sperm injection), 42 conduct AID (artificial insemination with donor sperm), and 15 are qualified for PGD (preimplantation genetic diagnosis). Notably, only 11 hospitals nationwide hold qualifications for all five procedures: AIH, AID, IVF-ET, ICSI, and PGD. The fewer the licenses issued, the higher the technical complexity involved, and the stronger the monopoly exerted by the public healthcare system over these services.

The medical reality reflected is that in first-tier cities, the average waiting time for in vitro fertilization (IVF) procedures exceeds six months, indicating severe supply shortages. As a result, the number of infertility cases handled annually by approved assisted reproductive technology (ART) institutions in China currently remains below 200,000, while the population of infertility patients reaches 40 million, revealing a substantial gap. From an investment perspective, this supply-demand imbalance highlights opportunities for suppliers but also underscores the strong bargaining power of existing providers. Consequently, there is virtually no incentive for domestic suppliers to engage in patient referral or traffic diversion strategies.

Therefore, both entrepreneurs and investors need to reconsider their strategic directions by moving beyond the traditional internet traffic mindset. A more ideal strategy is for “Internet + Infertility” enterprises to establish or partner with corresponding offline service institutions, thereby forming an independent, closed-loop service system. Encouragingly, licenses for reproductive medical centers are gradually being opened to private capital: Kunming Reproductive Center of Topchoice Medical opened in 2015, and United Family Healthcare’s Tianjin Reproductive Center was established in 2016.

Short patient journeys in infertility treatment, the lack of standardized value-added services, and the difficulty in monetizing internet traffic are the three major challenges facing the “Internet + Reproductive Medicine” sector. Confronting these dilemmas, the road ahead appears long; however, entrepreneurs in the “Internet + Infertility” space are still in the early stages, with ample time to reflect and break through. This article aims to provide analytical insights to help them avoid unnecessary detours.