Medical and Healthcare Services as a Major Segment of Big Health
China is a major healthcare country, with a large and steadily growing healthcare expenditure.China ranked second globally in terms of total healthcare expenditure in 2019, which reached CNY 6,520 billion in 2019.
Chinese healthcare industry is a major segment of the big health industry.
China's major healthcare market is an important part of the healthcare industry, including products and services related to maintaining, restoring and enhancing health. It consists of five main segments: (1) pharmaceutical retailing; (2) retailing of non-pharmaceutical health products; (3) medical and healthcare services; (4) consumer healthcare services; and (5) healthcare infrastructure.The market size of China's major healthcare industry reached RMB813.1 billion in 2019.
In 2019, among the major health segments, the market size of medical and healthcare services is RMB454.3 billion, with a market share of more than 50%; the market size of pharmaceutical retailing is RMB163.3 billion, with a share of 20.06%.
Digital Technology Transforms the Big Health Industry
The advancement and accessibility of digital technologies such as big data, cloud storage, and artificial intelligence have essentially changed the way health products and services are provided. The digital health market mainly includes online retail pharmacy, online medical consultation, online consumer healthcare and digital healthcare infrastructure.
Currently, China's healthcare industry is still in the early stages of digitization. in 2019, only 2.4% of medicines in China are distributed through out-of-hospital online retail pharmacies. Similarly, in 2019, in terms of outpatient visits in China, online consultations accounted for 6.0% of total consultations. In addition, in 2019, the size of China's digitalized health market is $218 billion, and the proportion of the health market that is digitalized accounts for 3.3% of China's total healthcare expenditures.
Online retail pharmacy and digital health infrastructure markets are the major forces in the digitalized major health market in 2019, with market sizes of $218 billion and $105 billion, accounting for 48.17% and 27.98%, respectively.
Multiple Factors Contribute to the Growth of the Digital Big Health Market
Changes in the Healthcare Market Provide Opportunities for the Growth of the Digital Big Health Market:
Expansion of Prescription Drug Outflow. Prescription outflow is an important new trend in the healthcare industry. The scale of out-of-hospital sales is increasing year by year.In 2019, the scale of out-of-hospital offline sales and out-of-hospital online sales in China's pharmaceutical market reached 481 billion yuan and 39 billion yuan, respectively.
In recent years, the proportion of pharmaceutical product online channel sales to out-of-hospital channels has been increasing. It is expected that prescription outflow will be gradually promoted in the next 5 to 10 years. Hospitals already linked to basic medical insurance and pharmacies near primary care organizations are expected to benefit from the trend in the short term; however, platforms with a large number of SKUs, strong supply chain capabilities and prescription flow capabilities are expected to be long-term beneficiaries.
Increasingly sophisticated healthcare payment system. It is expected that by 2030, the payment structure of China's healthcare expenditures will be more evenly distributed among basic medical insurance, commercial insurance and out-of-pocket expenses. The implementation of online payment for basic medical insurance programs is conducive to the development of online medical consultation as it acts as a gateway connecting offline hospitals and prescription streams, thus increasing the user base. Platforms with brand recognition, technological advantages and service network strengths will be the leaders in integrating with basic medical insurance. Commercial insurance has long focused on user experience, so platforms with strong service capabilities and dense networks can fully develop deep partnerships with them. In addition, digital platforms have attracted a large number of self-funded users in the past. Going forward, such users are expected to continue to prioritize platforms with brand recognition, trust and superior user experience.
Digitalized healthcare segment booming
"Internet+Healthcare"" policy framework and technological transformation have led to a booming online retail pharmacy market in China. China's online retail pharmacy market increased to RMB 105 billion in 2019, growing at a CAGR of 23.7% from 2015 to 2019.
The market size of China's online consultation industry in 2019 is RMB 9 billion. Online consultations generally cover consultations and prescription renewals, follow-up consultations, hospital appointments and chronic disease management.The COVID-19 epidemic not only raises health and wellness awareness, but also leads to increased acceptance of the service, which in turn leads to consumers developing a long-term habit of using online consultations. Combined with an enabling policy environment that is expected to further standardize the service, online consultations will become more efficient, reliable and of better quality.
-- For more information, please refer to China Health Industry Market Outlook and Investment Opportunity Analysis Report
.