TikTok Company Buys China’s Biggest Women and Children’s Hospital Chain

ByteDance, the Chinese company that owns the controversial video blogging platform TikTok, quietly took control of China’s largest chain of private obstetrics and gynecology hospitals in June.

The South China Morning Post (SCMP) on Friday reviewed documents that showed ByteDance acquiring full ownership of Beijing Amcare Medical Management Company.

This completed an acquisition process that began in September 2021 when ByteDance’s healthcare investment subsidiary Xiaohe Health Technology bought 17 percent of Amcare. Xiaohe later bought another 13 percent. Amcare recently withdrew from the public stock exchange in Shenzhen, paving the way for the final stage of the corporate acquisition.

The takeover deal was approved without reservations or conditions by China’s State Administration for Market Regulation in mid-June, according to the SCMP report. Several ByteDance executives swiftly appeared on the Amcare board of directors.

ByteDance evidently seeks to establish itself in the growing Chinese market for online health care services, a product that exploded in popularity during the coronavirus pandemic. The Xiaohe division of ByteDance launched two medical apps in late 2020: an online “medical consultation” app for those seeking healthcare services and a matchmaking app that validates the credentials of doctors who wish to offer themselves as providers.

The SCMP quoted estimates that online health care was a 22 billion yuan industry in 2020 but will grow to 198 billion yuan ($29 billion) by 2025. Most of China’s tech giants are getting into the market, including heavyweights like Tencent and Alibaba.

In a similar vein, Amazon.com acquired a chain of 188 clinics called One Medical last month, with an eye towards establishing an online service that would become the digital “front door” to the clinics. 

Amazon’s corporate planners believed they could greatly improve the “consumer experience” at the clinics, presumably by handling all of the office functions and paperwork online so patients spend less time on-site waiting to see doctors.

China’s online health care systems include some remote interaction between doctors and patients, sometimes eliminating the need for patients to visit brick-and-mortar clinics at all. Before the Wuhan coronavirus pandemic erupted, a pioneering project called the Wuzhen Internet Hospital offered online diagnoses and direct shipment of medications to the patients. The Wuzhen Internet Hospital maintained the smallest possible physical facility to comply with Chinese law, boasting only 20 beds for the entire operation.

China’s burgeoning online health care market took a hit in November 2021 when the Communist government published a set of tighter regulations, including a prohibition against using online consultations to make an initial diagnosis, and a prohibition against using artificial intelligence systems to answer patient questions instead of a qualified human doctor. 

Apparently, those practices were widespread, because online health providers lost up to 30 percent of their stock value overnight. Chinese state media hinted that more regulations for prescription drug sales and user privacy could be coming, further depressing the industry.