Alibaba Health 2.0 Launches with Strategic Focus on Rural Healthcare

Alibaba Health and Alipay’s Future Hospital are the two main pillars of Alibaba’s internet healthcare business, shouldering the critical mission assigned by Jack Ma to tap into the RMB 10 trillion healthcare market.

Alipay’s Future Hospital initiative centers on mobile entry points, aiming to complete all healthcare processes online—including electronic prescriptions, local medication delivery, referrals, real-time medical insurance reimbursement, and instant insurance claims—with the goal of transforming the entire hospital ecosystem. However, its progress has been far from satisfactory. According to Alipay’s latest “2015 ‘Internet+’ City Services Report,” the Future Hospital program has currently integrated only nearly 400 hospitals across China.

Alibaba Health was established in January 2014 through the acquisition and restructuring of the Hong Kong-listed company CITIC 21st Century by Jack Ma. In April 2015, the Tmall Pharmacy business was transferred under Alibaba Health’s umbrella. During the first half of 2015, Alibaba Health implemented a dual-app strategy: the Alibaba Health app focused on O2O pharmaceutical e-commerce, while the Yidiegu app served as a full-chain cloud hospital platform. At that time, Alibaba Health still treated pharmaceutical e-commerce and cloud hospitals as two separate business segments. Moreover, its cloud hospital initiative bore considerable resemblance to Alipay’s Future Hospital project, both aiming to build an online platform that integrates comprehensive medical resources across the entire healthcare system and value chain to deliver all-around medical services.

However, more than half a year later, Alibaba Health’s development strategy underwent a significant yet subtle shift. This time, the company chose not to disrupt the existing landscape of interests or undermine the interests of hospitals, but instead to forge a new breakthrough by targeting the weakest link in China’s healthcare system: rural areas.

Alibaba Health 2.0 is here.