The acceleration of technology over the past year has caused a massive ripple effect, permanently shifting consumer lifestyles, expectations, and behaviors to a future-ready state. In response UM APAC created the Asia-Pacific Innovation Annual – taking a deep dive into the cutting-edge advancements in entertainment, commerce, digital health, and connectivity, that are catapulting the region and proving new opportunities for brands.
The pandemic has radically reshaped the supply and demand of healthcare services. The APAC region is in pole position to capitalize on the change, driven by shifting demographics, rising consumer expectations, technological innovation, and current supply constraints of nascent health infrastructures. Across the region, the transformation of healthcare is accelerating as delivery and management are being reimagined.
The shift to online is driving much of this change; we are seeing consumer-centric digital health ecosystems forming at unprecedented speed and scale. Today, digital health impacts more than one billion people, and estimates show that digital health in APAC could collectively create up to $100 billion in value by 2025, up from $37 billion in 2020.
While these health ecosystems are enabled by digital, they are not purely digital, as they integrate both virtual and physical health services. Many notable examples are emerging in China, India, Indonesia, and other APAC markets. These ecosystems, together with a myriad of partners including brick-and-mortar providers, health-tech start-ups, and IT vendors, have become the driving force of a new wave of healthcare services.
E-pharmacies saw significant growth from 2020. The APAC e-pharmacy market was valued at around USD15B in 2020 and is anticipated to grow at a CAGR of 18.5% from 2020 to 2026.
China will remain the region’s largest market with recent government regulations strengthening consumer confidence and rapidly growing demand. With Chinese consumers already at the forefront of e-commerce adoption, it is no surprise that the e-pharmacy landscape is well-established. There are multiple players large and small, including internet giants like Alibaba and JD.com competing head on with pharmaceutical enterprises and chain drugstores.
Compared with more developed economies, the e-pharmacy markets in India and Indonesia are at nascent stages, valued respectively at $360 million and $180 million. However, the sizeable populations of both countries, coupled with rapid digitization, predicate incredible potential. Nearly 250 online pharmacies have already sprung up in India in recent years and the market is estimated to swell to $2.7 billion by 2023. Like China, the e-commerce giants of these markets — Amazon and Flipkart in India as well as Tokopedia in Indonesia — are all making a beeline for the e-pharmacy business, capitalizing on their traffic advantage and well-established supply and fulfilment model.
Along with the rise of e-pharmacies, there has also been a sharp increase in telehealth services. The heightened consciousness for safety during the pandemic gave telehealth a significant boost, and these behaviors have remained as patients have become comfortable seeking out medical services and seeing their doctors online.
Ping An Good Doctor, one of China’s largest online health platforms, saw significant growth over 2020. Visits to its platform hit 1.11 billion, average daily consultations reached nine times its usual number, and anti-epidemic videos attracted more than 98 million views during the early days of the outbreak in the country. The number of registered users has continued to grow, reaching 400 million by June 2021, an increase of nearly 55 million year-on-year. Similar trends have been observed with India’s Practo and Indonesia’s Halodoc; Practo reported 10 times growth in teleconsultations while Halodoc has seen mobile app downloads increase by 300% since March 2020.
An online-to-offline (O2O) strategy helps e-pharmacies and online health platforms offer better medical service, shorten delivery time, and cover more customers, improving their competitiveness. In China, e-pharmacies such as Kangaiduo, have built offline stores on top of their owned D2C store, flagship stores on JD and Tmall, WeChat store, mobile site, and Kangaiduo app, giving patients access to a breadth of touchpoints. Ping An Good Doctor has also piloted its unstaffed One-Minute Clinics across eight provinces and cities, utilizing artificial intelligence to connect patients with an in-house physician, in addition to carrying more than 100 categories of common drugs.
On the other hand, Alibaba’s ALI Health initiative has spun off a virtual hospital and drugstore. It launched a partnership with a network of offline pharmacies, using mobile internet and big-data technology to integrate upstream and downstream services, along with providing personalized health management through its online clinic.
A 2017 study among consumers in China found that 72% received health education information via the internet. On WeChat, 38,000 healthcare service providers had opened Official Accounts as of December 2019, per estimates by CBInsights and about 24,000 of its 1.2 million Mini Programs are health and wellness related.
Many public and private players alike have begun leveraging digital media and technologies to educate the consumer to actively manage and monitor their health. For example, the Health Promotion Board of Singapore has run the Healthy 365 program since 2015, which gamifies wellness by awarding redeemable “Healthpoints” based on daily step counts, healthy food purchases, health screenings, and more.
These behaviors have been augmented with the pandemic, as many digital healthcare platforms like Ping An Good Doctor in China were mobilized to help the public stay informed and safe. Halodoc, in Indonesia, was appointed by The Ministry of Health to launch access to COVID-19 rapid tests for the public. Despite rampant misinformation on the internet, the collaboration between the public and private sectors has strengthened the credibility of digital health ecosystems.
To date, many of the digital health ecosystem players have already achieved impressive growth and garnered funding success. Still, significant opportunity remains for healthcare scope expansion and innovation across APAC, with markets like China still developing their lower-tier cities, the suburban and rural populations of countries like India and Indonesia fast emerging, and developed economies like Japan and Singapore grappling with hyper aging populations.
In an increasingly crowded and rapidly converging digital and healthcare ecosystem-based marketplace, speed is of the essence. Consumer use and adoption will likely favor the first movers or fast followers who deliver to consumers not only their healthcare needs but also their expectations for seamless and personalized experiences.
