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China technology

Ping An Good Doctor blazes trail in developing unstaffed, AI-assisted clinics in China

  • China’s biggest online health care services provider plans to build ‘hundreds of thousands’ of its telephone booth-sized, AI-powered clinics and roll these out across the country in three years
PUBLISHED : Monday, 19 November, 2018, 6:30am
UPDATED : Monday, 19 November, 2018, 6:30am

Japanese billionaire Masayoshi Son, the founder and chief executive of technology conglomerate SoftBank Group Corp, is known for making solid bets in China’s hi-tech sector. Around 18 years ago, Son’s company invested US$20 million in a small Chinese online retail platform that rapidly grew to become e-commerce giant Alibaba Group Holding.

Son in July invited the heads of fast-rising Chinese companies Ping An Good Doctor and Didi Chuxing to a party he hosted in Tokyo, in a testament to how far these two firms have grown since SoftBank invested in them.

Wang Tao, the founder, chairman and chief executive of Ping An Good Doctor, acknowledged Son’s contribution amid the Hong Kong-listed online health care provider’s efforts to innovate and extend its operations outside the mainland.

“Mr Son helped us a lot in our international expansion,” said Wang in an interview with the South China Morning Post on the sidelines of the fifth World Internet Conference held earlier this month in Wuzhen, a town in China’s eastern coastal province of Zhejiang.

Ping An Good Doctor to expand medical services platform in Southeast Asia this year

The overseas foray by Ping An Good Doctor, which is formally known as Ping An Healthcare and Technology Co, is part of its major expansion programme after raising US$8.5 billion in proceeds from its initial public offering in Hong Kong in May.

That programme is led by the development of an extensive network of unstaffed, artificial intelligence-powered clinics on the mainland. The capabilities of this clinic were shown at the conference in Wuzheng.

“We plan to build hundreds of thousands of these unstaffed clinics across the country in three years,” Wang said.

Each clinic, which is about the size of a traditional telephone booth, enables users to consult a virtual “AI doctor” that collects health-related data through text and voice interactions. After the AI consultation, the information gathered is reviewed by a human doctor who then provides the relevant diagnosis and prescription online. Customers can buy their medicine from the smart drug-vending machine inside the clinic.

Ping An Good Doctor’s first-half losses narrow amid expansion into offline business and Southeast Asia

Ping An Good Doctor’s AI clinic expansion has come amid Beijing’s commitment to drive its “Healthy China” strategy. In April, China’s State Council issued a statement to accelerate the country’s online health care market by establishing proper service systems, a support network and regulatory framework.

That domestic market is expected to reach 100 billion yuan (US$14.4 billion) by 2025, up from 15 billion yuan last year, according to estimates by Frost & Sullivan.

Founded in 2014, Ping An Good Doctor was spun off from the Ping An Insurance Group and operates the biggest online health care platform on the mainland, with 228 million registered users and 48.6 million monthly active users as of June 30.

Its Good Doctor smartphone app, which was launched in 2015, provides diagnosis, treatment and online appointment booking. It also enables users to communicate with health care professionals through text, photos, and video. The app has a database of articles on health care and supports a microblog-style discussion forum on health-related topics. There is also an online store that sells medicine, health care products, cosmetics and gift vouchers for medical services.

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The company has described its operations as a “closed loop health care ecosystem”, which enables users to conveniently get medical consultations and drug purchases online, as well as offline follow-up medical treatment.

The planned AI-enabled clinics, each of which costs 30,000 yuan to build, would help further expand Ping An Good Doctor’s reach in the mainland’s growing internet health care market.

“Although we are still losing money, we have helped a lot of people in health care. That’s what matters to me,” Wang said.

Ping An Good Doctor narrowed its loss to 444.2 million yuan for the first six months of this year from 456 million yuan in the same period a year ago. Revenue jumped 150 per cent to 1.1 billion yuan from the year-earlier period.

Still, Wang said his company has come a long way in fostering the growth of the internet health care market in the world’s second largest economy.

“Some great doctors I talked to three years ago did not believe in online consultancy at all. They didn’t think a patient can get treatment without going to the hospital, ” he said.

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“That’s what people said about shopping before Taobao – you cannot do shopping without visiting the physical store. But when a person is sick, it’s more inconvenient for him or her to go to the hospital.”

Ping An Good Doctor has reported 1,037 members in its medical team and signed cooperation contracts with 4,650 external doctors as of June 30. It also reported more that 3,100 hospitals in its hospital network, as well as one-hour drug delivery services covering more than 80 cities on the mainland. In addition, the company has amassed 300 million online medical consultation records that would help improve its AI algorithms, according to Wang.

Wang said the doctors who have followed the company believed it would be “the Alibaba of health care”.

Ping An Good Doctor has also amassed 300 million online medical consultation records that would help improve its AI algorithm, according to Wang.

He said the company was inspired by the operations of CVS Heath Corp, a New York-listed firm that runs a network of pharmacies and heath care services across the US. His goal was to create a company that would allow Chinese consumers to get medical advice at any drug store across the country, which is what CVS provides to consumers in the US.

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Ping An Good Doctor, however, faces stiff competition from Alibaba, the parent company of the Post. As of March 31, nearly 23,000 medical practitioners, pharmacists and nutritionists had signed up with the New York-traded e-commerce giant’s subsidiary, Alibaba Health Information Technology, to provide online health consultation services. There were 28 million active users on the subsidiary’s “My Health” service on the Taobao mobile app. Alibaba Health has also announced plans to expand its AI investment and to launch a range of new services,

Wang, however, can take comfort in the potential major investors like Son see in Ping An Good Doctor. He said it only took him 10 minutes to persuade Son into investing in the company’s pre-IPO round.

Son initially wanted to invest US$1 billion in Ping An Good Doctor so it could postpone its Hong Kong flotation. Wang said he turned down that offer because he was confident a public listing would be better for the company’s development. Convinced, Son invested US$400 million in the company in December last year.

In August, Ping An Good Doctor formed of a joint venture with Southeast Asian ride-hailing giant Grab, in which SoftBank is a large investor. Their venture aims to give users in the region access to AI-assisted online medical consultations, medicine delivery and appointment bookings.

Wang, who had previously co-founded Alibaba’s software business that developed into Alibaba Cloud and served as chief technology officer at Chinese software provider Kingsoft Corp, said he believes a person can live to reach 120 years old. “When I envision that can happen to my family and friends, I’m more motivated to do my job.”