Zhangshang Tangyi Carves Out a Niche in China's Mobile Chronic Disease Management Market with Innovative Business Model

According to the "2015 Annual Review of China's Mobile Chronic Disease Management Market" released by Analysys, the market size of mobile healthcare in China reached RMB 4.88 billion in 2015, with a growth rate of 62.0%. It is projected that the market size will reach RMB 29.15 billion by 2018, with a compound annual growth rate (CAGR) exceeding 60% from 2016 to 2018. Meanwhile, the trend toward specialization in mobile healthcare is becoming increasingly evident, with the mobile chronic disease management segment emerging as one of the fastest-growing areas.

Policy BenefitsRefined Chronic Disease Management Services Are Gradually Becoming a Mainstream Strategic Focus

From a national perspective, the successive introduction of favorable policies has created development opportunities for healthcare IT companies, internet enterprises, and mobile health companies. Last year, the National Health and Family Planning Commission announced the conditions for physicians to practice at multiple sites, thereby ensuring the opening up and enrichment of medical resources in the mobile health market. In September, the General Office of the State Council issued guiding opinions on promoting the establishment of a tiered diagnosis and treatment system, setting clear targets to basically establish such a system nationwide by 2020 and to ensure that patients with serious illnesses can generally receive treatment within their counties by 2017.

Meanwhile, according to a CCTV News online survey, “healthcare reform” emerged as the second most discussed topic during the recently concluded “Two Sessions.” As China’s healthcare reform gradually enters a more complex and challenging phase, “Internet+” has extensively permeated the medical sector, making internet-based healthcare a hotly debated subject among deputies to the National People’s Congress and members of the Chinese People’s Political Consultative Conference.

It is worth noting that internal demand fosters external supply. As current medical technology cannot yet cure chronic diseases and preventive measures remain limited, treatment requires regular, long-term follow-up and monitoring to control disease progression. However, the need for frequent hospital visits for such monitoring inevitably hinders effective disease management.

Given the characteristics of chronic disease management, mobile health is inherently equipped to meet patients’ diverse needs, including access to pharmaceutical products, precise and timely guidance for chronic disease management, data monitoring and analysis, experience sharing, and lifestyle improvements. Building upon the digitalization of chronic disease management services via the internet, mobile chronic disease management services transcend temporal and spatial constraints, thereby aligning more closely with patients’ demands for such care.

Analysys Intelligence points out in its report that the mobile chronic disease management service market is still in its early stages, with an unclear business model. In comparison, the mobile diabetes management market has more participants and is more developed. Taking Zhangshang Tangyi as an example, leveraging its advantages in a multi-dimensional medical service system, it integrates resources across the diabetes management service chain through various cooperation models, thereby achieving multi-channel aggregation of patients and potential patient resources. For instance, in collaboration with Meinian Onehealth, Zhangshang Tangyi provides post-checkup health management services focused on “prevention + control” for diabetes to Meinian’s users; similarly, by providing Ping An Good Doctor with a diabetes health management service model, it exports its systematic and multi-dimensional medical service capabilities to mobile healthcare enterprises.

An Alluring Cake: Innovative Business Model Carves Out a Unique Niche

The cake is tempting, but not easy to eat. The integration of mobile internet with chronic disease management will serve as an excellent tool, offering numerous advantages such as timeliness, efficiency, cost-effectiveness, vertical specialization, interactivity, big data, artificial intelligence, and mobility. The vast market potential has fueled intense market activity; however, how to innovate business models and secure a share of the pie in the highly competitive mobile diabetes management services market has become a key consideration for many companies.

In the report, Analysys Intelligence specifically analyzed the business model of Zhangshang Tangyi (Pocket Sugar Doctor), citing it as a typical case in the mobile chronic disease management service market to highlight the strengths of its approach. By adopting a “software + hardware” model design, Zhangshang Tangyi leverages its multi-dimensional medical service system to integrate resources across the industry chain.

The report highlights the following key achievements: (1) Establishment of a comprehensive health management service platform: Supported by a multi-dimensional medical service system, it integrates resources across the diabetes management service industry chain, thereby enhancing its capacity to deliver more comprehensive and complete services to users; (2) Intelligent glucose meters: The “Sugar+” module is compatible with approximately 70% of conventional glucose meters currently available on the mainstream market, facilitating monitoring of physiological data by users and physicians, timely optimization of diagnosis and treatment plans, and adjustment of lifestyle habits; (3) Exploration of commercialization pathways: Zhangshang Tangyi has extensively explored the integration of chronic disease management with commercial insurance, approaching the issue from the perspective of service payers, which effectively addresses challenges related to service payment and user education.

The “commercial insurance model” of Tangyi (Pocket Diabetes Doctor) has given investors in the mobile diabetes management service market more room for imagination. According to statistics from Analysys Think Tank, Tangyi has secured financing from multiple institutions since last year. Among them, in September of last year, Tangyi obtained $15 million in Series A financing led by IDG Capital, with participation from a well-known strategic investment firm, while angel investors Ping An Ventures and Matrix Partners China continued to increase their follow-on investments.

The expansion of the mobile health market size in 2015 indicates that this sector still has vast room for development, while the concentration of capital in areas such as chronic disease management has provided some direction for investors. How mobile health will evolve in the future remains to be seen.