JD Health Expands Medical Ambitions with Prescription Flow Initiative

By Zhou Chao, Hao Xueyang

JD.com, which started as an e-commerce business, has not only become the largest enterprise in China’s direct-sales e-commerce model but also accumulated significant advantages in online traffic, offline delivery, IT capabilities, and supply chain management. Healthcare has been a key focus for JD.com in recent years, with strategic expansions into five major segments: O2O pharmaceutical e-commerce, medical aesthetics, insurance, electronic prescriptions, and smart hardware.

The latest news is that on March 25, 2016, JD.com partnered with the Zibo Municipal Health and Family Planning Commission and Xinhua Grand Pharmacy, a subsidiary of Xinhua Pharmaceutical, to launch a “prescription circulation” project, marking JD.com’s deepening expansion in the healthcare sector.

An analysis of the underlying business logic reveals that these strategic initiatives are essentially an extension of JD.com’s four core capabilities—online traffic, offline delivery, IT infrastructure, and supply chain expertise—into the healthcare sector.

In fact, JD.com’s capabilities, advantages, and key business areas accumulated over the past decade extend far beyond this. For instance, JD.com has amassed extensive data on user shopping behaviors; its vigorously promoted JD+ smart hardware ecosystem will generate substantial volumes of user health data; and the company is also heavily investing in the development of its financial payment system.

Big data, financial payment services, and the four core capabilities mentioned above—online traffic, offline delivery, IT infrastructure, and supply chain management—have laid a solid foundation for the development of JD Health’s business. In the future, JD may further expand its strategic layout in areas such as health insurance product innovation, chronic disease management, regional health informatization, and medical insurance payment systems.