Over the last 10 years, we have witnessed how the sharing economy transformed business value chains, from information distribution, unlocking latent values, to payment and even consumption patterns. For example, the likes of Airbnb, Uber and Didi Chuxing, have changed the entire process of finding and booking services for consumers, while successfully reaching out to property owners and people who wish to earn extra income in their spare time.
In the U.S., the likes of Zocdoc is changing the way people consult doctors, instead of waiting in line you can now find and book the doctor of your choice on an app. Likewise, Oscar Health is also changing the way health insurance works stateside. So far, I noted that developments have been confined to a particular system or country only, and none has reached a global scale like Airbnb, established in 2008 and now covering 191 countries, or Uber, established in 2009 and now available in 66 countries.
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In Asia, We Doctor Group (previously known as GuoHao) a unicorn said to be worth north of US$1.5 billion after the latest funding round involved investors such as Ping An Insurance and Tencent, is likewise largely confined within China only.
Healthcare in Asia, like its counterparts in the Western economies, is an extremely regulated industry. Disruption will not happen overnight without some painful adjustments. While healthcare technology startups strive to scale in terms of reach and innovation, personally I expect companies that disrupt existing business value chains in a global scale such as the likes of Airbnb and Uber, can only emerge through consolidation in the healthcare space. Is healthcare ready to be transformed such that a truly global player can emerge, beyond just a national champion? It will be challenging in view of the uncertain regulatory environment, and enforcement and compliance which vary across borders. We have recently witnessed AliHealth, a subsidiary of Alibaba, postponing its IPO and shutting its online pharmacy store after the China FDA changed existing regulatory rules. Meanwhile Baidu which derived more than 80% of its revenue from advertising, 24% of which was from medical-related advertisements, suffered a 7.9% drop in share price at one point, wiping out $5 billion in market capitalization for allegedly selling listings to bidders without adequately verifying their claims.
I could tell that many technology giants with lots of resources, especially those from China (such as Tencent, Alibaba, Baidu) are extremely keen to enter the healthcare space given how lucrative it potentially can be. However, it will take time, experience and knowledge to navigate through the regulated industry as it fundamentally has to do with lives.