Specialist
Former Director at Beijing Jingdong Health Co Ltd (JD Healthcare)
Agenda
- JD Health’s overall business structure and internet hospital and pharmaceutical e-commerce business competencies vs peers
- JD Health’s prescription circulation and chronic disease management business development
- O2O drug delivery business, plus competition with players including Dingdang Kuaiyao
- JD Health’s cooperation with local Health and Family Planning Commissions and Healthcare Security Administrations – project types and implementation
- Internet healthcare medical insurance payment policy impacts on JD Health
Questions
1.
According to its prospectus, JD Health has two major business lines at the moment, namely retail pharmacy business and internet healthcare business. The former contributes the majority of its revenue. Can you analyse JD Health’s two major business lines? What are the main competitors to it in the two fields? What is the competitive landscape like among them?
2.
JD Health claims that it currently operates the largest online retail pharmacy and the largest internet healthcare platform in China. In 2019, Alibaba Health reported an annual operating revenue of a little less than RMB 10bn, and JD Health recorded an annual operating revenue of around RMB 10.8bn. We know that Alibaba Health first engaged in pharmaceutical e-commerce business earlier than JD Health did. JD Health used to focus mainly on the development of Yaojingcai (药京采), a drug wholesale trading platform, and pharmaceutical supply chains. Is it really the operator of the largest online retail pharmacy in China for the time being? How come it can surpass Alibaba Health in operating revenue so rapidly? What are its main competitive edges?
3.
We had an interview about JD Health last year, and the specialist told us that JD Health let several business departments, including the logistics business department, handle supply chain business at the same time. Now that the company is planning for an IPO, has it set up a specialised supply chain business department?
4.
Let us take a closer look at JD Health’s internet healthcare business. You once worked on JD Health’s early stage prescription circulation projects. Can you tell us how the company cooperated with hospitals, doctors and regulatory authorities on prescription circulation projects at the time? What problems did it encounter?
5.
You said that JD Health’s prescription circulation projects do not quite address the interests of doctors. Do you think doctors will be more willing to transfer prescriptions to internet healthcare platforms, with the tightening of regulations on kickbacks? What can JD Health do to increase doctors’ willingness to transfer prescriptions to its platforms?
6.
After JD Health implemented the Version 5.0 prescription circulation project, how much can a doctor contribute to the prescription volume? Can you compare the prescription volumes before and after the implementation of the aforementioned project with some examples?
7.
Is it feasible to convince local healthcare security administrations to increase the ceiling? The overall trend of the healthcare reform is to control healthcare expenses. Large internet healthcare platforms such as JD Health have their own internet hospitals. Does it make sense to compare the upper limits on medical insurance reimbursements for them and that for their competitors or some offline hospitals?
8.
What is the contribution of JD Health’s online prescription circulation project to the sales of pharmaceutical products? JD Health has invested a lot in its own offline medical institutions and full-time doctors. Can you comment on the ROI?
9.
As for prescription structure, what type of prescriptions account for the largest proportion? How should internet platforms increase their ARPC? What kind of high-priced prescriptions are hard to get?
10.
JD Health has long been engaged in the O2O business model. Which tiers of cities is JD Health focusing on right now? How does it evaluate cities of different tiers and design development strategies for local markets?
11.
Does JD Health enjoy an edge over players such as Dingdang Kuaiyao in terms of their models and operations in this segment? It seems that Dingdang Kuaiyao has been exploring enterprise-facing business and trying to have its own central pharmacies. Which do you think will go faster in this segment, JD Health or Dingdang Kuaiyao?
12.
We have covered some businesses of JD Health such as prescription circulation, medical insurance-based business and drug delivery. You mentioned that probably not all the revenue of such businesses would go to JD Health. Which businesses do you think will be the main contributors to the sustainable growth of JD Health after it gets listed? Which business sections do you think we should pay more attention to?
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