Will Mobile Health End Up in the Same Quagmire as the Online Video Industry?

Recently, when presenting projects, investors often argue that in the healthcare sector, appointment scheduling and physicians constitute the upstream segment. They particularly view appointment-scheduling platforms as the primary gateway to all mobile health services, frequently asking, “What would you do if your project also entered the appointment-scheduling market?” Their tone suggests that once giants like Baidu, Alibaba, and Tencent (BAT) enter a space, no other players can survive. In reality, however, numerous formidable companies—such as 360, JD.com, Xiaomi, LeEco, Didi Chuxing, Meituan-Dianping, and Ctrip—have emerged and thrived even after BAT’s dominance was established. More recently, people cite Didi Zhuanche’s sweeping success across the premium ride-hailing, carpooling, designated driver, and test-drive markets as evidence that controlling a high-frequency upstream gateway enables one to capture the entire market. Consequently, many investors are eager to fund appointment-scheduling platforms and physician appointment-addition platforms. But is this truly the case?

The Bible says: “What has been will be again, what has been done will be done again; there is nothing new under the sun.” In the mobile healthcare industry, I personally believe that appointment registration and physician platforms will not become strong entry points akin to Didi Chuxing, but are more likely to fall into a chaotic competitive landscape similar to that of the online video industry. Initially, the online video sector attracted immense enthusiasm from users and investors due to its clear profit model, rigid and strong user demand, vast market potential, and exceptionally long user engagement times. This boom prompted former Sohu President Victor Koo to found Youku, former COO Gong Yu to establish iQIYI, and former Editor-in-Chief Li Shanyou to create Ku6. Meanwhile, CEO Charles Zhang launched Sohu Video, and eventually Tencent and LeEco joined the fray. After burning through billions of dollars and experimenting with models such as YouTube and Hulu,
After more than six years of fierce competition across various models, the streaming wars reached a “game over” moment last month when Alibaba fully acquired Youku. This has resulted in a “3+2” landscape: three platforms wholly owned by the BAT tech giants (Youku, iQiyi, and Tencent Video) and two independent players (LeEco Video and Sohu Video). Despite the massive traffic generated by these top platforms, which collectively boast over 100 million daily active users, no single dominant monopoly has emerged, and profitability in the online video industry remains elusive.

From the perspective of service models, both video streaming platforms and physician appointment platforms operate in sectors characterized by significant differentiation in content and services. In these ecosystems, strong ties exist between users and service providers, whereas the relationship between the platform and its users remains weak. Users follow the content, and patients follow specific hospitals and physicians rather than the platform itself. Consequently, such platforms are unlikely to evolve into monopolistic gateways.Consider this analogy: online appointment registration platforms and physician networks are akin to video streaming sites; physicians resemble actors and celebrities; hospitals correspond to television stations; private hospitals are somewhat like pirated video websites—profitable but lacking in reputation. All these entities share a common regulatory "parent": the National Health and Family Planning Commission (NHFPC), which parallels the State Administration of Press, Publication, Radio, Film and Television (SAPPRFT). Alibaba Health, Baidu Doctor, Guahao.com, DXY, and Chunyu Doctor correspond to Youku, iQIYI, Tencent Video, LeTV, and Sohu Video, respectively. Numerous small and large mobile health companies appear poised for consolidation. Apart from the low-frequency, sporadic nature of healthcare utilization—which has prevented the formation of massive traffic volumes comparable to those in the video industry—the mobile health sector mirrors the video industry’s earlier landscape in terms of both capital enthusiasm and market potential. However, its ultimate outcome remains uncertain. If the trajectory truly resembles that of the video industry, platforms focusing solely on traffic will face significant challenges, as traffic entry points cannot be monopolized or unified. Content and services constitute the core value; medical and health services will become as valuable as films, television dramas, and variety shows. Companies and physicians providing medical and health services, regardless of size, will generate revenue similar to production companies and star actors. Platforms will prioritize service ecosystems but will be unable to monopolize entry points to dominate the market. DXY and Chunyu Doctor have launched clinics to build their ecosystems, with clinics serving as hardware-based entry points. Does this scenario seem somewhat familiar?

From the perspective of service characteristics, most mobile healthcare services involve low-frequency, high-value decisions that require careful consideration by users. This sector relies on expert-driven models rather than the "high-frequency displacing low-frequency" dynamic. Consequently, it is unlikely to produce a single dominant giant akin to Didi in the ride-hailing industry. The ride-hailing sector allows for service standardization, where reaching the destination is the primary need and variations in the service process are of secondary importance. In contrast, healthcare is a service with unpredictable outcomes, where the patient experience during the process is crucial yet difficult to standardize. This resembles the video content industry, which is characterized by significant personalization and differentiation.The equalization of public resources and the differentiation of services often fail to create market monopolies, whereas the essence of business lies in monopoly rather than competition. The competition among multiple internet platforms brings convenience to users but renders platform profitability indefinitely elusive.In this ecosystem, high-quality content (TV dramas, variety shows, films) and premium medical services will become increasingly valuable, while platforms must expend substantial capital to attract more resources and services, making profitability increasingly difficult.

"So even if the mobile healthcare industry shares similar characteristics with video, is there no hope at all? Not necessarily.""In industries characterized by significant service differentiation and fragmented traffic sources, the most effective profitability model is often to build a self-contained, closed-loop ecosystem."Since the establishment of a content, platform, and entry-point ecosystem by LeEco, the video industry has demonstrated a viable profitability model. Platforms such as Youku, iQIYI, and Sohu Video have all made attempts at producing original content, with Sohu even achieving quarterly profitability through its film *Jian Bing Man* (Mr. Six). What insights can be drawn from this? The key takeaway is that this industry requires the construction of a self-contained ecological loop, placing equal emphasis on traffic entry points and services, with services taking precedence over entry points. It is more important to develop unique characteristics and high-quality service standards. Whether one starts by building a traffic entry point or by enhancing service capabilities, it is not too late to enter the market, provided there is no monopoly on entry points. Furthermore, there is no need to be overly concerned about platforms with existing entry points launching similar services. Each company has its own strategy; as long as you excel in your vertical service sector, more entry-point platforms will be willing to collaborate with you. For instance, e-Peizhen (e-Escort) has already partnered with companies possessing traffic entry points and resources, such as the 114 Appointment Registration Platform, AliHealth, and the Beijing Community Association.

So, are there still opportunities for entrepreneurs in the mobile health industry to provide medical services or capture traffic by carving out a niche as an entry point for linked services? After all, the healthcare market has naturally been Baidu’s domain. Starting from connecting people with information and extending to connecting people with services, and evolving from information services to transactional services, Baidu indeed possesses incomparable advantages. However, this market was forcefully penetrated by Meituan and Dianping in the realm of mass consumer spending. The same holds true for mobile health: preoccupied with earning revenue from Putian-affiliated hospitals, Baidu missed the optimal window to strategically position itself in mobile health. Tencent invested in Guahao.com and DXY.cn, while Baidu only managed to secure stakes in Health Road and Haodf.com, and more recently invested in Quyi Network, none of which are controlling interests. Its own initiative, Baidu Doctor, has yet to gain significant traction. Being one step behind in strategic layout has led to continuous passivity. This is precisely what has allowed the mobile health sector to flourish with diverse players.However, the primary entry points for the mobile health industry lie more in offline hospitals and clinics than in online channels. With hundreds of prestigious Grade 3A hospitals operating independently and maintaining their own spheres of influence, there has never been a unified, monopolistic gateway in this sector, allowing various players to sustain their businesses.Even the major appointment-booking websites, which are integrated with the Hospital Information Systems (HIS) of numerous hospitals, are essentially ticketing platforms rather than true healthcare gateways, because the core medical resources reside with the hospitals, not with mobile health companies.

Standardized, high-frequency B2C O2O models tend to achieve success more easily in industries such as ride-hailing and express delivery, where resource integration can be rapidly accomplished and market share can be captured through aggressive capital investment. In contrast, for non-standardized, low-frequency services that involve cautious consumer decision-making, the optimal approach is B2B or B2B2C. Pure B2C models entail excessively long market education cycles and prohibitively high marketing costs; while not unfeasible, they are exceptionally arduous. These sectors are often deeply entrenched traditional industries with decades of accumulated interests and complexities. It is largely unrealistic to expect that simply applying the “Internet Plus” framework could bring about transformative change within a few months or even two to three years.The advantage of the B2B model is its ability to filter out a portion of non-standardized demands; however, it requires considerable patience. The typical ramp-up period for B2B industries is 18 months, a timeline that deters most startups. Consequently, success hinges on whether investors have the patience to take this long-term bet. Unfortunately, urgency prevails across the board. Investors are impatient: while proclaiming they only invest in founders born after 1990 and sharing anecdotes about making investment decisions in ten minutes, they simultaneously decry the “capital winter.” Media outlets are impatient: they concurrently report on new financing rounds and waves of startup closures. Entrepreneurs are impatient, expecting dramatic business transformations, surging user growth, and effortless fundraising within mere months. Even the Premier appears impatient, visiting Startup Street twice in one year in the hope that mass entrepreneurship will rescue the Chinese economy from peril, much like the real estate sector did in the past. As a result, those who secure venture capital feel pressured to generate data quickly, while those genuinely committed to building sustainable businesses but lacking funding cannot survive the extended cycle and are forced to give up. This makes achieving success in the mobile health sector even more challenging. Consider the successful consumer-facing (B2C) mobile health companies in the U.S., as well as Chinese platforms such as DXY, Haodf, WeDoctor, and Health Road—none have operated for nearly a decade without yet identifying a viable profitability model. In contrast, healthcare companies that have achieved profitability, such as Meinian Onehealth, iKang, Guokang, and Huakang, predominantly began with B2B operations.The essence of this phenomenon is the lack of insurance payers in the healthcare service industry. China’s basic medical insurance covers treatment but not prevention. At the Great Wall International Congress of Cardiology held a few days ago, Professor Hu Dayi advocated that the core of healthcare lies in disease prevention. However, since patients do not pay for preventive services and insurance does not provide reimbursement, B2B models essentially aim to resolve this payment issue.

Of course, the service offerings and industry characteristics of the two sectors differ vastly, appearing as unrelated as wind, cows, and horses. Video consumption is far more frequent, whereas healthcare services are relatively infrequent. Users make decisions about watching a video with much greater ease, while approaching medical services requires considerable caution. The value proposition of mobile health is significantly greater than that of video; the former is just emerging as a hot trend, while the latter is already game over. Otherwise, why would I be willing to forgo the generous compensation package of a senior executive at an internet company to start up e-escort (medical accompaniment) services? This comparison merely draws on certain superficially similar aspects and is essentially nonsensical. It is offered solely as an industry reminder—perhaps an undue worry, but one worth considering.

The views expressed in this article are those of the author and do not represent the position of VCBeat.
This article is published on VCBeat with authorization from the author, Yue Jianxiong. Reproduction without permission is prohibited.