Alibaba's Jack Ma pointed out its company's long term strategy as 'investing in Chinese people's health and happiness' in 2014. The "Two-H strategy" drawn by Asia's one of the wealthiest people seems to be accomplished mainly in the last two years.
Alibaba (BABA: NYSE) has subscribed to around 159 million shares of Meinian Onehealth Healthcare Holdings (美年健康) (002044: SZ) in private placement worth CNY 1.84 billion and bought 4.06% of its shares of the medical checkup provider. Following the transaction, Alibaba and its affiliated private equity arms held over 9.39% of the equity of Meinian Onehealth, becoming the hospital chain's largest stakeholder after the company's founder Yu Rong (余蓉).
Alibaba's foray into traditional healthcare services provider and an offline hospital chain stem from Alibaba's strategic deployment in the Mainland's health scene.
Earlier in 2017, Alibaba Cloud (阿里云) teamed-up with Meinian Onehalth to improve its cloud computing platform with mass medical data produced by the hospital chain, to carry out core big data analysis, and worked together to build an online healthcare services platform for Alibaba.
The company's semi-annual filings revealed that the number of medical checkups in Meinian Onehealth was around 10.38 million for the first half of 2019. The average prices of group inspection and individual inspection were CNY 499 and CNY 609, respectively, for per person. The chain clinic is currently serving with over 400 hundreds of outlets.
Besides Alibaba's strategic ties up with offline healthcare providers, medical checkups are seen as a rising business themselves to generate profit, and their competitive power comes from their ability to close institutional clients.
Alibaba' s medical arm Ali Health (阿里健康) (0241: HK), is mainly generating its revenues from B2C drug delivery, yet striving to provide more online clinic and consultation related services, just like another Chinese internet giant Tencent's healthcare consultation company Tencent Trusted Doctors.