Recently, Baidu fell once again in the field of healthcare.
On March 16, 2021, Baidu launched a one-stop health management platform called Qingzhu Health, which brings together various services such as information, measurement reminders, blood sugar and blood pressure records, health classes, and a shopping mall. The functions are similar to Baidu Doctor, which Baidu previously announced the closure of Baidu, but the segmentation functions are richer.
Currently, Qingzhu Health has launched the Qingzhu Manager Mini Program on WeChat and the Qingzhu Health Doctor App in the Apple App Store. After the medical division was abolished in 2017, does Baidu want to do the medical business again?
Baidu Healthcare: Entering the market early, but plummeting due to excessive commercialization
Baidu's layout in the big health industry can be traced back to ten years ago. From 2010 to 2013, Baidu pioneered the medical field, cooperated with medical information platforms such as “Good Doctor Online” and “Encyclopedia Medical Network”, invited medical experts from all over the country to edit and revise medical entries, and later cooperated with the State Drug Administration to open up an official drug information database. In 2014, Baidu released its own big data engine and Baidu Doctor website. This is also the first time Baidu has tried online medical consultation services.
After the big data engine was released, Baidu relied on the traffic advantages of the search business to build a platform to integrate medical information resources and develop related products. Therefore, Baidu Medical uses “doctor+AI” as the main line of the layout, and has successively developed Baidu Medical Brain, Baidu Doctor, Dr. Thumb, Baidu Health, Baidu Medicine, Dulife, and Baidu Direct, for a total of eight medical sectors. However, in Baidu's business adjustments in recent years, these products have either been remodeled or lost their voice.
In this period, Baidu was anxious to monetize in the short term. With products such as search rankings, Baidu Doctor, and Baidu Direct, etc., it diverted patients to client hospitals, and relied on advertising traffic to reap huge revenue. According to 2016 media reports, out of 11,000 private hospitals at the time, Putian hospitals accounted for 80% of the number. Liang Jianyong, then secretary of the Putian Municipal Party Committee, once revealed that Putian hospitals can provide Baidu with tens of billions of dollars in advertising revenue every year.
In fact, Baidu's monetization of medical bidding, Baidu Tieba, Baidu Knowledge, etc., is not the main line of Baidu's layout in the medical field, but rather a monetization method derived from its search business, but this also paved the way for later scandals in Baidu's medical business.
In 2015, Baidu CEO Li Yanhong once said during a speech at Fudan University, “What Baidu wants to do is send the right patients to the right doctors.” However, after incidents such as “Wei Zexi Seek a Doctor” and “Hemophilia Tieba” occurred, Baidu's entire medical layout before 2017 went to waste. Baidu's rush to monetize eventually completely destroyed its credibility in the medical field. People questioned Baidu Healthcare's safety, and Baidu's stock price also evaporated 45 billion yuan within a few days.
Some medical industry professionals said, “The best application scenario for online medical services is obviously a search engine. When people are not feeling well, the most convenient thing is to search. After all, finding a doctor is far less convenient than searching directly on the Internet. The tragedy of Baidu's previous search was mainly due to the fact that Baidu searches were too commercialized and ignored the safety issues of medical services.”
Focus on AI+ healthcare, Baidu restarts the big health industry
The outbreak of many negative events made Baidu make up its mind to adjust the medical business. In February 2017, Baidu announced the abolition of its medical division, then shut down the “Baidu Doctor” app a month later. An internal Baidu email revealed that the abolition of the medical division did not abandon the medical business, but rather adjusted and optimized the team to adjust and optimize the focus of the medical business to the field of artificial intelligence.
Baidu called itself an “AI ecosystem company” for the first time in its 2020 full-year financial report. Baidu's accumulation in the AI field has also become the capital for its comeback in the AI medical field.
Although Dr. Baidu announced its closure, Baidu Medical Brain, which is based on artificial intelligence technology, is still performing its own functions. In April 2017, Baidu Healthcare announced cooperation with the domestic medical service community 580. At the beginning of 2018, Baidu established the “Baidu Psychics” team. As an important channel for Baidu to promote AI+ healthcare, this team has a presence in many aspects of the medical field.
After entering 2020, with the spread of the COVID-19 pandemic, residents' demand for pharmaceutical e-commerce and Internet medical platforms has further increased. According to data from Ai Media, during the 2020 Spring Festival, the number of people active in pharmaceutical e-commerce products peaked at 1,482,100, an increase of 10.11% over the previous year. The average number of users searching through Baidu and browsing information related to the coronavirus exceeded 1 billion per day. Under these circumstances, Baidu took advantage of the momentum to establish Baidu Health on March 12. In January 2021, Baidu Health invited a number of experts, including Professor Zhang Wenhong, to discuss the COVID-19 issue.
According to Baidu's financial reports for the fourth quarter of 2020 and the full year, Baidu's health business developed rapidly in the fourth quarter of 2020: the average number of daily video views increased 92% over the third quarter; cooperation was reached with more than 120 authorities; the number of doctors from the top three hospitals exceeded 100,000; and during the 2021 Spring Festival, 600 million more e-commerce was invested. In addition to the online medical business, Baidu continued to expand into the health industry in 2020, including Internet hospitals, medical devices, and AI pharmaceuticals.
At the end of 2018, Li Yanhong was the platform for Baidu's all-in-one AI eye screening machine. A year later, Baidu obtained the license to operate Class II and Class III medical devices. In September 2020, under the leadership of CEO Li Yanhong, the “Baitu Biotechnology” life science platform company was announced. The development direction is to build an AI technology platform and participate in or lead novel drug research and development.
What are Baidu's health prospects in the 10 trillion market where internet giants have entered one after another?
According to the “China Big Health Industry Strategic Plan and Enterprise Strategy Advisory Report” published by the Forward-looking Industry Research Institute, the scale of China's big health industry will exceed 10 trillion yuan in 2020; the compound annual growth rate from 2019 to 2023 is about 12.55%, and the scale of China's big health industry will exceed 14 trillion yuan by 2023.
As the market prospects for the big health industry become broader, and with the implementation of the “Internet+Healthcare” policy, the country strongly supports the development of the Internet medical industry. The big health industry has become a new battleground, and Internet giants such as ByteDance, JD, and Alibaba have joined in.
As a giant in the same period as Baidu, Alibaba naturally did not fall behind in the big health industry. In 2014, Alibaba Health entered the Hong Kong stock market through a backdoor approach. By connecting Alipay and Tmall to two giant traffic channels, Alibaba Health's healthcare business has covered fields such as pharmaceutical e-commerce, new retail, Internet healthcare, consumer medicine, and AI pharmaceuticals. Meanwhile, JD relied on its own e-commerce system to create pharmaceutical e-commerce, and connected hospitals through pharmaceutical e-commerce, and developed in the three directions of Internet hospitals, pharmaceutical B2B trading platforms, and large pharmacies.
Established internet giants have entered the market one after another, and ByteDance is of course not willing to fall behind. ByteDance set up the Aurora Department, which is specifically responsible for the big health business, led by Wu Haifeng, the former vice president of Baidu. In May 2020, ByteDance acquired Encyclopedia Medical Network and changed its name to “Xiaohe Medical.” It also launched the “Xiaohe Health” independent brand, which covers online medical services. According to people familiar with the matter, similar to Baidu, ByteDance is still exploring AI pharmaceuticals. In December 2020, there were media reports that ByteDance's teams in Beijing, Shanghai, and California in the US were recruiting AI pharmaceuticals.
Compared to the internet giants that later entered the medical market, Baidu Health has not yet gone public, and the revenue data is difficult to verify. However, through the revenue data of other Internet health companies that have already gone public, we may be able to see some of the reasons why Baidu has always adhered to the medical business. According to financial reports, during the six-month period from March to September 2020, Alibaba Health had revenue of 7.162 billion yuan, up 74% from the previous year. As of March 16, the total market value of Alibaba Health was about 270 billion yuan. Currently, Baidu's market value is 579.2 billion yuan, and Alibaba Health's market value is close to one-half hundred percent.
In addition to the Internet companies that have already entered the market, there are more companies that are being tested on the edge of the big health industry. For example, due to the nature of its e-commerce platform, Pinduoduo launched the HPV vaccine reservation group purchase in 2020, and cooperated with BGI to launch a nucleic acid testing business. In addition, Pinduoduo's affiliated companies established a health technology company in September 2020. And how many other internet companies that haven't entered the market will enter the market in the future? Meanwhile, in the 10 trillion health market, which includes many fields such as pharmaceuticals, drug sales, and online doctor-patient platforms, etc., competition may become more intense in the future.