In China, COVID-19 sparked a digital health care boom

While the COVID-19 pandemic rages, it’s not easy to visit China or India. But if you could somehow transport yourself to the world’s two most populous nations, you might catch a glimpse of how the virus is accelerating the digital transformation of the global health care industry.

The health care sector has long resisted the digital revolution, lagging far behind industries like retail, manufacturing, and financial services. But the pandemic is changing that. Around the world, patients who once insisted on seeking medical assistance directly from hospitals, clinics, and doctors’ offices are suddenly wary of visiting such facilities—and much more comfortable with remote diagnosis and treatment. McKinsey estimates that global digital health revenue—from telemedicine, online pharmacies, and wearable devices—could soar to $600 billion in 2024, up from $350 billion in 2019.

The shift has been especially urgent in China and India, where the ratio of doctors and hospitals to population are a fraction of those in developed nations and patients are accustomed to long wait times for medical appointments.

In China, the pandemic sparked an explosion of new telemedicine platforms offering coronavirus-related services. The Wall Street Journal reports that between late 2019 and the summer of 2020, the number of new telemedicine providers jumped to nearly 600 from fewer than 150.

And demand for services offered on those platforms has soared. Take Ping An Good Doctor, a leading telemedicine service founded in 2014 by conglomerate Ping An Insurance. The platform, which provides diagnoses for over 3,000 common diseases for more than 350 million users, reported more than 67 million monthly active users at the end of last year and now manages an average of 830,000 medical consultations per day—making it China’s most popular online medical provider.

The pandemic has fueled astronomical gains in the stock prices of Ping An Good Doctor and rival Alibaba Health, a unit of e-commerce giant Alibaba Group. Meanwhile JD Health, the health care unit of NASDAQ-listed online retailer JD.com, raised $3.5 billion in a December initial public offering on the Hong Kong Stock Exchange, boosting the fledging company’s market capitalization to $44 billion. Next up is WeDoctor, an online health care provider backed by Tencent Holdings, which plans to file for an IPO in Hong Kong this month after commanding a valuation of $6.8 billion in its latest funding round, according to Bloomberg.

For now, most of these companies lose money. But the surge in users is boosting their financials fast. Beijing has sought to bolster telemedicine firms to ease the strain on the nation’s overcrowded urban hospitals and underdeveloped primary care system. Regulators have amended laws to make it easier for telemedicine platforms to sell prescription drugs, allow online consultations for a wider array of illnesses, and clarify rules on how online medical care can be reimbursed by insurers.

Analysts at UBS Global Wealth Management estimate the size of China’s telehealth market will overtake that of the United States by 2023, and exceed $55 billion by 2025.

India’s telehealth market remains a fraction of China’s; a recent estimate by EY and the Indian Pharmaceutical Alliance projected it would reach $5.5 billion by 2025. But it is growing rapidly and the potential is vast. As in China, disruptive new technologies battle less developed health care infrastructure; in many cases, the alternative to innovation is that patients just don’t get the care they need. India’s government, like China’s, recently loosened regulations on the sector, clarifying that doctors on telemedicine platforms could legally advise patients across state lines via the Internet.

Practo Technologies, one of India’s leading telemedicine platforms, connects 100,000 doctors with 300 million users in over 200 cities. The startup has raised funds from Tencent and Sequoia Capital.

Apollo Hospitals, India’s largest private health care provider, is also embracing the new technologies. The group had launched Apollo 24/7, a holistic digital health platform, just before the virus swept across the country. By mid-2020, the service had enrolled 4 million people. Apollo patients can use an app to get drug refills, book tele-consultations and remote diagnoses, or secure a medical loan through Apollo’s partnership with HDFC Bank. Shobana Kamenini, Apollo’s executive vice chairperson, recently told McKinsey that despite the group’s physical network of 70 hospitals, 300 clinics, and 4,000 pharmacies, when the pandemic hit group executives knew “we had to turn on a dime.”

To learn more about the telemedicine revolution, and how it’s reshaping the delivery of health care services in China, India, and the rest of Asia, join Grady and me today at 9 p.m. Beijing time (that’s in just over an hour from now!) for “The Doctor is Online,” a virtual conversation to ponder “Digital Health in the Post-COVID Era” with CEO of Ping An Smart Healthcare Geoff Kau and Apollo Hospitals’ Executive Vice Chairperson Shobana Kamineni.

You can register for the call and find out more here.

More Eastworld news below—and don’t miss this week’s Eastworld Spotlight conversation with Japan markets guru Peter Tasker.

Clay Chandler
clay.chandler@fortune.com

This edition of Eastworld was curated and produced by Grady McGregor. Reach him at grady.mcgregor@fortune.com. 

Eastworld news

Proven effective

On Monday, India’s President Narendra Modi got injected with Covaxin, a COVID-19 vaccine produced by the Indian firm Bharat Biotech. Until that point, Bharat Biotech had not released any efficacy data indicating that its vaccine was effective, but a wave of government ministers nonetheless followed Modi’s lead in getting the vaccine on Monday and Tuesday. On Wednesday night, Bharat Biotech announced that Covaxin was 81% effective in preventing COVID-19 infections in an interim analysis of the company’s phase III trial results. Fortune

The Asia gamble

Nearly two months after casino mogul Sheldon Adelson’s death, his company Las Vegas Sands announced that it is selling its Las Vegas properties to real estate operator Apollo Global Management Inc. for $6.25 billion. Sands CEO Robert Goldstein said Wednesday that the company will shift focus to markets like Singapore and Macau and said Asia remains the “backbone” of the company. Even before the pandemic, Asia accounted for roughly 90% of Sands’ total revenues. Wall Street Journal

Deadliest day

The United Nations said the Myanmar military killed 38 people on Wednesday in the country’s bloodiest day of protests since the military’s coup on Feb. 1. Mass protests against the military began soon after generals arrested democratically elected President Aung San Suu Kyii and protesters have continued to take to the streets in defiance of the military regime amid the bloodshed. Washington Post

Quad health goals

The U.S. is developing a plan with ‘Quad’ allies Japan, India, and Australia to distribute COVID-19 vaccines across Asia as it attempts to counter China’s influence in the region. American officials fear that China’s early efforts to provide Asian countries like Indonesia, the Philippines, and Cambodia with Chinese-made vaccines will increase China’s influence in the region. China, meanwhile, denied it’s using vaccines to increase political influence in various countries and that such concerns are “narrow-minded.” Financial Times

Discrimination in Australia

Over 1.2 million people of Chinese heritage live in Australia and they are reporting increasing rising levels of racial violence. In the last year, 18% of Chinese-Australians said they had been “physically threatened or attacked” due to their Chinese heritage and the majority of the respondents said that the COVID-19 pandemic and worsening state of Australia-China relations had contributed to rising anti-Chinese racism in the country, according to The Lowy Institute. The new survey comes as racist attacks against Asian communities in the U.S. is similarly on the rise. The Lowy Institute

No fans

Foreign fans may not be allowed to watch the Tokyo Olympics this summer, the new Tokyo 2020 head Seiko Hashimoto told reporters this week. The loss of fans may prove financially devastating to an Olympics that is already $2.8 billion in the red due to its year-long postponement. Economics professor at Kansai University Katsuhiro Miyamoto estimates that Japan’s economy will suffer a $22 billion shortfall if fans aren’t allowed to watch the games. Fortune

Coronavirus by country

China started to test COVID-19 from the bottom—and now we’re here. In recent weeks, American and Japanese delegations have criticized Chinese authorities for using anal swabs to test foreign diplomats for COVID-19. Chinese scientists have claimed that anal swabs make for better tests as COVID-19 lives longer in that part of the body, but people have much preferred receiving nasal or throat swabs over the new alternative. Amid the protests, China is reportedly expanding the program, and will soon require that nearly all foreign travelers receive the intrusive tests before entering the country. The Times of London

Markets and movers

Alibaba – The Chinese e-commerce giant announced Thursday that it will buy Bangladeshi online food delivery platform HungryNaki. Over the past year, Alibaba has increased investments throughout South and Southeast Asia as its India portfolio has come under scrutiny amid rising China-India tensions.  Nikkei Asian Review

Kweichow Moutai – The Chinese liquor giant’s stock is in free fall on the Shanghai stock exchange, declining over 22% in value since Feb. 10. The depreciation of China’s most valuable stock—with a market cap of $390 billion—has hammered Chinese mutual funds and led to losses in the country’s stock indices. Bloomberg

Bitcoin – China banned cryptocurrency mining in its northern province of Inner Mongolia, a region that accounts for 8% of the globe’s Bitcoin mining computing power. China says that crypto mining wastes power and is not environmentally sustainable. Bloomberg

Kirin – The Norwegian central bank said Wednesday that it may exclude the Japanese beer giant from Norway’s $1.3 trillion sovereign wealth fund due to Kirin’s ties to Myanmar. On Feb. 5, Kirin said it would scrap its planned joint venture with a Myanmar beer company amid the country’s coup but later said it would continue selling beer in the country. Nikkei Asian Review

Deloitte – Malaysia’s government announced Wednesday that the American auditing firm will pay Malaysia $80 million to resolve claims related to its role in the 1MDB scandal. Deloitte had audited financial statements related to the state-backed 1MBD fund, which was used for years as a personal bank account by fugitive financier Jho Low. Reuters

Netflix – The American streaming giant is releasing 40 local productions in India in the coming year. The 2021 schedule will be Netflix’s largest-ever programming slate in India as it prepares to battle with competitors like Disney and Amazon. Financial Times

Final figure

1,058

China now has 1,058 billionaires, beating the U.S. to become the first country in the world with over 1,000 U.S.-dollar billionaire tycoons, according to the new Hurun Global Rich List 2021. The U.S. is in second place holding 696 billionaires, but China’s wealthiest class is continuing to grow at a faster rate. In 2020, China added 259 billionaires compared to 70 in the U.S. Tesla’s Elon Musk sits atop Hurun’s rankings with a record wealth of $197 billion followed by Amazon’s Jeff Bezos, who is worth an estimated $189 billion. South China Morning Post