Amid a wave of closures of private hospitals and rising demand for medical services and drugs in China, some of the country’s tech giants are stepping in — both online and in bricks and mortar.
ByteDance, the parent company of TikTok, received approval last month for its subsidiary Amcare Healthcare to open a new 800-bed private hospital in Beijing. Tencent has made two investments in the medical field already in 2025, including into a company specializing in super-resolution imaging technology, according to the Chinese data platform Tianyancha.
Meanwhile in December, Chinese food delivery giant Meituan became the first online platform to gain permission to sell obesity drug Tirzepatide, developed by American pharmaceutical giant Eli Lilly. Some tech companies have already built up significant businesses selling drugs online over the last decade: Alibaba, still one of China’s largest tech companies, generated nearly 30 billion yuan ($4.1 billion) in 2024 from drug sales, online consultations, and other medical services, for example, according to its subsidiary Alibaba Health’s earning report.
These companies lack control over crucial medical resources, including access to top doctors. Most of China’s premier doctors remain affiliated with public hospitals.
Zhang Hongliang, who leads a Chinese podcast dedicated to medical issues
The attraction of healthcare for tech firms lies in the scale of the potential market in China. Fueled by both an aging population, annual healthcare spending in China could reach 205 trillion yuan ($28 trillion) by 2030, investment firm Invesco projects.
Yet despite their substantial cash reserves and massive online traffic, tech companies face challenges in crucial areas such as being able to hire qualified personnel and gaining public trust. Moreover persistent issues with China’s healthcare model are making it hard for any company to generate profits from private hospitals.
Tech firms are trying to “straddle the line between consumer services and public welfare,” says Jonathan Liu, a veteran medical industry consultant. As a consequence, he says, “while this sector offers substantial business opportunities, it also presents considerable regulatory challenges.”
To date, figures suggest that tech companies have made the best return on their healthcare investments in the area of online drug sales. While the healthcare divisions of Alibaba and JD.com have turned profitable, for example, the overwhelming majority of their revenue stems from online drug sales, according to their financial reports.
“People joke that the essence of China’s Internet healthcare is selling medicine, because that’s the only way to make money,” says Liu.
When it comes to building hospitals, meanwhile, big tech firms face significant structural headwinds.
For sure, the number of private hospitals in China has boomed in recent years: from 2011 to 2021, their number increased by nearly 200 percent, according to a paper in medical journal The Lancet. As of 2023, there were 26,583 private hospitals in the country, more than twice the number of public ones, according to Chinese government data.
However, private hospitals attracted only 16.5 percent of total hospital visits, according to government data. Such hospitals often struggle to attract high quality medical staff and obtain the best equipment, in part because, unlike public hospitals, they receive no government funding, rent reductions or other subsidies.
Problems for private hospitals began to mount during the years of strict lockdowns in China during the Covid pandemic, as it became harder for patients to journey to their facilities. Moreover, while China’s public health insurance program covers some medical services provided by private institutions, the country’s healthcare insurance fund has come under strain in recent years, meaning private hospitals have found it increasingly difficult to receive full reimbursement from the government.
One doctor at a private hospital in Jinhua, Zhejiang Province, says that when funds are tight, the government prioritizes payments to public hospitals while delaying reimbursements to their private counterparts. He said his hospital is owed between 20 million and 30 million yuan ($2.7 to $4.1 million) in insurance payments each year, forcing private hospitals to absorb the losses. The doctor spoke to The Wire China on condition of anonymity.
The upshot has been a surge in private hospital bankruptcies, which topped 1,200 in 2024, up from 800 in 2023 and 500 the year before, according to the government’s National Enterprise Bankruptcy Information Disclosure Platform.
“These companies lack control over crucial medical resources, including access to top doctors,” explained Zhang Hongliang, who leads a Chinese podcast dedicated to medical issues. “Most of China’s premier doctors remain affiliated with public hospitals.”
The question facing tech companies is whether they can succeed where others have failed. Some are already struggling: Tencent, for example, is phasing out dozens of offline clinics under its Tencent Doctorwork brand, a venture it co-founded in 2016. After a series of mergers and rebrandings, it gradually faded from the market during the pandemic.
Why, then, are companies like ByteDance investing in this sector, given the challenges? One possibility is that ByteDance, with its substantial cash reserves, is positioning itself for the future.
“ByteDance wants a presence in every industry. It has sufficient cash, so it can afford to take risks,” said Michael Ma, an independent doctor who was once in charge of a Sino-foreign joint venture private hospital in Beijing.
Healthcare has a lot of data and inefficiencies, so those who might not be fully aware of the complexities of these regulated markets might see the sector as ripe for disruption.
Helen Chen, head of LEK Consulting’s healthcare practice in Shanghai
“Big Tech has invested in healthcare all along – internet hospitals, retail e-commerce product platforms, healthtech and healthcare IT,” says Helen Chen, head of LEK Consulting’s healthcare practice in Shanghai. “Healthcare has a lot of data and inefficiencies, so those who might not be fully aware of the complexities of these regulated markets might see the sector as ripe for disruption.”
Beijing is progressively easing its regulatory constraints, opening the healthcare sector to more private investment: Last November, the government also announced plans to ease entry conditions for foreign-funded hospitals. The same month, Singapore-based Perennial Holdings became the first foreign entity to receive a license from Chinese authorities to operate a wholly-owned tertiary hospital in the country — China has a three-tier hospital system, with the third tier usually having the best medical staff, equipment and bed numbers.
How much more investment will transpire remains unclear, given the continuing uncertainty over China’s broader economic outlook and a lack of trust in the regulatory outlook following government crackdowns on industries such as online education and video gaming in recent years.
Ma, the independent doctor, said he asked his former employer about its interest in expanding investment in China following the announcement of the new policy. “They told me that the overall strategy now is to withdraw from the Chinese market,” he says.
Yi Liu is a New York-based former staff writer for The Wire. She previously worked at The New York Times and Beijing News. Her work has also appeared in China Project, ChinaFile and Initium Media.
