Chinese e-commerce giant JD.com has named Xin Lijun, president of JD’s local lifestyle service group, the chief executive officer of its healthcare subsidiary JD Health, and JD Retail CEO Xu Lei was appointed chairman of the business unit.
Why it’s important: As economic headwinds persist amid decelerating growth, JD.com is diversifying beyond its core e-commerce business. JD Health is its third subsidiary with unicorn status after closing a May funding round totaling $1 billion, in addition to its digital technology and logistics arms.
- The market size of China’s online healthcare industry is forecasted to reach RMB 20.4 billion (around $3 billion) in 2019 according to data from data analytics firm iResearch. Retail online pharmacy sales, a sector which is one of JD Health’s core businesses, makes up the lion’s share of the total market, 89.2% in 2017, the iResearch data showed.
- Many Chinese tech giants are doubling down on their healthcare investments. Alibaba has its smart hospital plan and Tencent has invested in multiple healthcare startups and is building up offline services.
Details: Xin will be fully responsible for the subsidiary’s strategy, management, and business development.
- He joined JD in October 2012 and has been responsible for business operations in many divisions within the company.
Context: JD Health began as an e-commerce platform for pharmaceutical products such as vitamins and supplements, medical supplies, and Chinese traditional medicine.
- JD Health was spun off from the parent company in May when the unit secured funding from investors including CPEChna Fund, CICC Capital, and Baring Private Equity Asia. JD remains the majority shareholder.
- JD Health’s main business lines are online-to-offline pharmacy, a third-party platform for wholesale drugs, and web-based hospitals.
- The company says that its pharmaceutical wholesalers number in excess of 100,000 in 47 cities at present.
- Its online hospitals offer online-to-offline (O2O) treatment through a partnership with medical institutions. The doctors on the platform come from 327 cities in 32 provincial-level administrative regions.
- JD Health is also working with a number of well-known medical institutions to explore medical information and intelligent solutions.