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TikTok buys China’s largest chain of women’s and children’s hospitals

ByteDance, the Chinese company that owns the controversial video blogging platform TikTok, quietly took control of China’s largest chain of private obstetrics and gynecology hospitals in June.

The South China Morning Post (SCMP) on Friday reviewed documents that showed ByteDance taking full ownership of Beijing Amcare Medical Management Company.

This completed a takeover process that began in September 2021, when ByteDance’s health investment subsidiary Xiaohe Health Technology bought 17 percent of Amcare. Xiaohe later bought another 13 percent. Amcare recently delisted from the public stock market in Shenzhen, paving the way for the final stage of the corporate takeover.

The takeover deal was approved without reservations or conditions by China’s state market regulator in mid-June, according to SCMP report. Several ByteDance executives quickly appeared on Amcare’s board.

ByteDance is apparently seeking a foothold in China’s growing market for online healthcare services, a product that exploded in popularity during the coronavirus pandemic. ByteDance’s Xiaohe division launched two medical apps in late 2020: an online “medical advice” app for those seeking healthcare services, and a matchmaking app that validates the credentials of doctors willing to offer themselves as providers.

The SCMP reported estimates that online healthcare was a 22 billion yuan industry in 2020, but will grow to 198 billion yuan ($29 billion) by 2025. Most of China’s tech giants are entering the market, including heavyweights such as Tencent and Alibaba.

Similarly, acquired a chain of 188 clinics called One Medical last month, aiming to create an online service that will become the digital “gateway” of clinics.

Amazon’s corporate planners believed they could greatly improve the “consumer experience” at clinics, apparently by handling all office functions and paperwork online so patients would spend less time in the office waiting to see doctors.

China’s online healthcare systems include some remote interaction between doctors and patients, sometimes eliminating the need for patients to visit brick and mortar clinics at all. Before the Wuhan coronavirus pandemic broke out, a pioneering project called the Wuzhen Internet Hospital offered online diagnoses and instant delivery of medicines to patients. Wuzhen Online Hospital has maintained the smallest possible physical facility to comply with Chinese law, having only 20 beds for the entire operation.

China’s growing online healthcare market he received a blow in November 2021, when the communist government published a series of stricter regulations, including a ban on using online consultations to make an initial diagnosis and a ban on using artificial intelligence systems to answer patient questions instead of a qualified doctor.

Apparently, these practices were widespread, because online health providers lost up to 30 percent of their stock value overnight. Chinese state media has hinted that more regulations on prescription drug sales and user privacy could be coming, which will further depress the industry.

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