Is Now the Best Time for Innovation and Entrepreneurship in China's Healthcare Industry?

The 7th Qike Health Investment Forum (formerly the China Healthcare Investment Summit, CHIC) was held in Shanghai from March 29 to March 31. The conference explored topics such as biopharmaceuticals, genetic testing, healthcare services, and medical investment opportunities. It invited founders from industry-leading companies—including OrbiMed, Vivo Capital, F-Prime Capital, Sequoia Capital, Johnson & Johnson, and BGI—to jointly discuss the most promising healthcare innovation projects. VCBeat has compiled the key highlights of the conference for our readers.



Dr. Lu Hongbo, Chairman of the CHIC 2016 Conference and Managing Director of Orbimed Asia Pacific, stated, “Against the backdrop of the continuous development and increasing globalization of the health industry, innovation remains the key to corporate success.”

Innovation is the Core Driver of the Healthcare Industry

Is now the optimal time for innovation and entrepreneurship in China’s healthcare industry? The guiding principle of the 13th Five-Year Plan is to expand China’s healthcare industry, with innovation as its core driving force.

A representative from the Institute of International Economic Studies under the National Development and Reform Commission (NDRC) stated that the government has placed innovation at the core of China’s economic and social development during the 13th Five-Year Plan period. The accelerating aging of China’s population is driving growing demand for the health and elderly care industry. The medical and health-elderly care sectors hold enormous market potential in China. Under the existing institutional framework, new products and business models are poised to capture significant market share.

McKinsey’s analysis notes that science-based innovation in China remains weak. Although significant emphasis and substantial investment have been placed on innovation, the effectiveness and quality still require improvement. Zhang Fangning, a Global Director at McKinsey, stated that innovation is imperative for China. Multi-industry research categorizes China’s innovation landscape into four areas: 1. Science-based innovation in the pharmaceutical industry; 2. Engineering-based innovation (such as medical devices or high-speed rail); 3. Customer-oriented B2C models (e.g., Alibaba); and 4. Efficiency-driven innovation. However, with regard to science and engineering, China still has a long way to go.

In terms of scientific innovation, the impact on healthcare is not immediately visible. The transition from laboratory to market requires time; however, China’s vast market is accelerating the pace of product updates. It is only a matter of time. Innovation can also be global, and China’s medical innovations need to integrate into the global innovation ecosystem. This integration can help attract global talent and advanced expertise more effectively. In pharmaceutical innovation, China needs to develop its own distinctive approach rather than simply copying foreign models, thereby leveraging its unique advantages. Innovation in China’s healthcare sector is accelerating, with both speed and scale that cannot be underestimated. If new approaches emerge in entrepreneurship and innovation models, they will significantly influence the overall effectiveness of entrepreneurship and innovation across the entire industry.

How Is Mobile Health Innovating?

Driven by policy and capital, China’s digital and mobile health market has witnessed rapid growth. “The absolute size of China’s patient population is enormous, harboring immense data value,” pointed out Li Yiping, co-founder of CHIC. “How to leverage data platforms to effectively enhance the accessibility of healthcare services and reduce health management costs is a critical issue that mobile health companies should consider in the coming phase.”

Zhang Yusheng, CEO of Xingshulin, stated that China’s innovations in internet healthcare are not merely following foreign trends; rather, China can lead global innovation in this field by bringing its homegrown advancements to the international stage. It is reported that Xingshulin has launched an English version of its “Medical Record Clip” app in the international market, with doctors from more than ten countries already using it. Zhang remarked, “Internet healthcare solutions that fail to address real problems are akin to scratching an itch from outside one’s boot—they do not tackle the substance of the issues or expand the overall market, but merely redistribute existing resources.”

At the forum, Kuang Ming of Zhangshang Tangyi stated that services and products can embody both standardization and personalization. Standardization refers to a standardized service system; a clear standard not only enhances physicians’ efficiency but also allows users to clearly see the outcomes. Personalization, on the other hand, caters to individual clients by tailoring the service process to each patient’s specific condition. These two seemingly contradictory approaches are harmonized through a rational combination.

Gengmei CEO Liu Di stated, “The healthcare industry is currently facing a significant upgrade in service-level consumer demand. It is no longer just about spending money to treat illnesses, but also about pursuing a better quality of life. We need to keep pace with user needs.”

Highlights: Key Insights from On-Site Guests

For internet healthcare to develop healthily in China, the most critical factor is efficiency—solidifying business operations. Mobile healthcare is technology-driven; those who master the cutting edge of technology will ultimately prevail.

High valuations are an inevitable issue in any industry. Looking back at the companies invested in today, many high-quality firms will command even higher valuations in a few years, yet they may not necessarily deliver the returns expected by investors. Nevertheless, the influx of substantial capital will drive rapid development across the entire industry.

As an investor, it is best to position oneself at the forefront of emerging trends before they become mainstream, while also promptly identifying sectors that are undervalued or whose potential has not been fully recognized.

Investors are highly focused on a company’s future commercialization strategy, specifically how it will generate revenue and sustain normal operations, before addressing growth issues. Adhering to this principle from the outset, rather than relying on the next investor to foot the bill, allows more time for self-development.

The primary factor for investors is to identify a team with the right values, which also serves as the foundation for long-term collaboration. Secondly important is the entrepreneur’s ability to “lead teams” and “mobilize resources,” specifically manifested in whether the founding CEO can build a core team centered around themselves, while maintaining an open mindset for external cooperation rather than attempting to accomplish everything within their own internal system.

Entrepreneurs should focus on their core domains to genuinely create corporate value, rather than crafting narratives tailored to investors’ expectations or getting carried away by market opportunities.

Physician groups and hospitals are two distinct concepts, representing both a future trend and a business model. The most critical requirement for physician groups is differentiated competition; only by possessing unique expertise and specialized skills can they maintain an invincible position. Initially, the primary challenge for physician groups was not a lack of capital, but rather marketing and promotion.

Companies that identify with an internet mindset and operational style should not be controlled by publicly listed entities; otherwise, the inevitable outcome is a parting of ways. For internet entrepreneurs, the key metrics are user count and monthly active users (MAU), with losses accepted in the early stages. In contrast, publicly listed companies prioritize profits. This inherent contradiction is not a problem attributable to founders or entrepreneurs, but rather a flaw in the structural mechanism.