JD Health app product analysis

On December 8, 2020, JD Health was officially listed on the Hong Kong Stock Exchange with an issue price of HK$70.58. On the first day of listing, JD Health soared 40% to HK$99.15, with a total market value of more than HK$310 billion. Many people believe that this price is inflated by market speculation and will soon come down. However, the actual situation was indeed beyond the expectations of most people. In just a few days, JD Health's stock price reached nearly 200 yuan, and its market value exceeded 600 billion yuan.

1. Industry Analysis

Internet medical care is gradually becoming more diverse. Stimulated by the increase in rigid demand and the outbreak of the COVID-19 pandemic, Internet medical care has achieved large-scale growth. According to incomplete statistics, the scale of my country's Internet medical market will reach 200 billion yuan in 2026, and the CAGR from 2020 to 2026 is expected to be 14.23%. Internet medical care is in a stage of taking small steps and running fast.

So why is the Internet online medical industry experiencing explosive growth? Since the medical industry is an industry deeply affected by macro factors, we will use the PEST model to explore the reasons behind it.

1. Politics

The country's attitude towards Internet medical care is becoming increasingly clear. On April 12, 2018, Li Keqiang presided over an executive meeting of the State Council and determined measures to develop "Internet + Healthcare" to alleviate the difficulty of seeing a doctor and improve people's living standards.

The meeting pointed out that in accordance with the deployment of the CPC Central Committee and the State Council, accelerating the development of "Internet + Medical Health" can improve the efficiency of medical services, reduce the number of trips patients have to run and be more convenient, and enable more people to share high-quality medical resources. The meeting determined

The "Internet + Medical Health" model has finally been clearly recognized by the country. In the future, the country will vigorously promote the development of "Internet + Medical Health", and the industry is about to usher in new changes.

2. Economy

1) Demographic dividend promotes consumption

The results of the seventh national census released by the National Bureau of Statistics on the 11th showed that my country's total population was 141.178 million, an increase of 72.06 million compared with the sixth national census in 2010, a growth of 5.38%, with an average annual growth rate of 0.53%. This shows that our country is still in the period of demographic dividend. At the same time, as the aging of the population further deepens, the elderly and their children’s guardians have become potential target groups for the medical e-commerce industry.

2) As disposable income increases, users are more willing to spend on Internet healthcare

As my country's per capita income level rises, people's demand for health increases, and the proportion of medical and health care consumption is increasing year by year. Among the various per capita consumption expenditures of urban residents in 2018, medical and health care expenditures had the largest increase, with a year-on-year growth rate of 15.1%, an increase of nearly 6 percentage points from 2017.

3. Society and culture

1) Resource distribution is extremely uneven

At present, the distribution of medical resources in my country is extremely uneven. According to a report by Frost & Sullivan, in 2016, tertiary hospitals, which accounted for nearly 7.7% of the total number of hospitals in China, undertook 49.8% of the country's medical consultations, which greatly increased the diagnosis and treatment burden of tertiary hospitals and also made the patient experience poor. At the same time, most tertiary hospitals are located in first-tier cities such as Beijing and Shanghai, as well as relatively wealthy and densely populated eastern coastal provinces such as Shandong, Jiangsu and Zhejiang, and the distribution of medical resources is extremely uneven.

2) Population aging rate

(iiMedia Research) Data shows that China's population aging rate reached 17.2% in 2018, and this figure has shown an increasing trend in recent years. Against the backdrop of an aging population, Internet medical care provides great convenience for the elderly in seeing doctors and buying medicines, as well as follow-up medical services. Young residents are also paying more and more attention to their health, creating favorable conditions for Internet medical care, and the overall development environment is showing a positive trend.

Coupled with the current impact of the new coronavirus pneumonia, online medical care is currently a good way to consult, and it also further promotes the acceptance of Internet medical care by the public.

4. Technology

With the continuous development of technologies such as artificial intelligence, 5G technology, and cloud computing, major companies have invested in related research and development. It will become possible to accurately match doctors, respond quickly, and improve diagnostic efficiency. From the perspective of technological development, in time, related Internet medical care will obtain effective technical support.

The development of Internet technology has effectively promoted the development of the mobile medical industry. In 2020, the development of Internet medical care continued to accelerate due to the impact of the COVID-19 epidemic, and the gradual implementation of 5G and artificial intelligence technologies also boosted the growth of the industry. 5G and artificial intelligence technologies remain fundamental requirements for the development of Internet medical care. In terms of medical care, 5G enables the interconnection of medical terminal equipment, while artificial intelligence continues to upgrade in many aspects such as control, management, and intelligent diagnosis, continuously promoting the upgrading of the Internet medical industry.

1) Trends

All of the above factors have worked together to drive the recent popularity of Internet online medical services. So what will be the development trend of this industry in the next few years? Is there enough market space?

2) Market scale development

In 2019, the market size of Internet medical post-diagnosis medical supply-side reached 30.98 billion yuan, and the market size of the demand-side reached 283.96 billion yuan. The main reason is that the overall medical environment has remained relatively conservative in the past few years, and policies such as medical insurance payment and online purchase of medical prescriptions are still unclear. However, as the overall environment and policies become clearer, the scale of the supply side of Internet medical diagnosis is expected to increase to about 1/4 of the demand side by 2022.

The market has been in a state of supply exceeding demand for a long time, stimulating rapid expansion of the supply-side market.

3) Growth Trend

Industry policies have evolved from prudent to open, and the policy guarantee system has been continuously improved, laying a solid foundation for market expansion. . The sudden outbreak of the new coronavirus pandemic in 2020 has become an accelerator for the industry. It is expected that the market size will exceed one trillion yuan in 2025 and the traffic dividend is expected to be maintained.

To sum up, with favorable policies, technological advancement and increasing demand from people, my country's Internet medical industry continues to develop. According to this development, the development of online medical health will be a good thing!

2. Competitive Product Analysis

Faced with this fast-growing golden track, major companies are now beginning to get involved in the medical and health field, such as JD Health, Yilu, Dingxiang Doctor, Chunyu Doctor, etc.

In the field of pharmaceutical e-commerce, according to data from Qimai.com, Ali Health, Meituan, and JD Health rank in the top three in terms of usage rate and user activity, and are in the first echelon; Dingdang Express Pharmacy, Dingxiang Doctor, and Chunyu Doctor, as important players in the industry, have a greater influence and are in the second echelon. JD Health and Ali Health are both leaders in the online medical industry, and their business systems are both B2B+B2C+O2O models, making them direct competitors.

So next we will take the growth paths and business models of the two companies as the starting point to gain an in-depth understanding of the two products and compare the differences between them.

1. JD Health

• In 2014, JD.com's healthcare business was established and began to operate as an independent business category of JD.com Group.
• In 2016, JD.com negotiated with Taizhou City, and the prototype of JD Health began to emerge, promoting the "Internet +" medical reform and jointly creating the "Taizhou Model" of medical reform.
• In 2017, JD.com signed a "Healthy Taizhou" strategic cooperation agreement with Taizhou City; in December of the same year, JD Health launched an online consultation service.
• In March 2018, JD Internet Hospital obtained a medical institution practice license, allowing the company to prescribe prescriptions to users of its online consultation and prescription renewal services.
• In January 2019, the first JD Internet 100 million Suqian branch was launched;
• In May 2019, JD Health officially started operating independently, gradually forming a B2B+B2C+O2O business model, and establishing core sub-brands and products such as "JD Home Doctor", "Jingdong Medicine Link", and "Home Doctor Guardian".
• In November 2019, JD Health completed a US$1 billion Series A financing.
• In August 2020, it completed a US$5.8 billion Series B financing round. The investor in the Series B round was Hillhouse Capital, and the post-investment valuation was close to US$20 billion.
• On December 8, 2020, JD Health was officially listed on the main board of the Hong Kong Stock Exchange. Its market value exceeded HK$330 billion on the first day. The current market value is HK$364.292 billion, exceeding Alibaba Health's HK$312.226 billion. Become the leader in Internet medical care!

Self-operated model : JD Pharmacy is a pharmacy operated by JD.com and backed by JD.com. It has a relatively stable supply of goods and can ensure the normal supply of medicines.

Market positioning: It is positioned as a medical e-commerce platform, and Ali Health is also a medical e-commerce platform.

Profit model: Self-operated pharmacies selling medical and health products. And collect commissions from third parties on the line.

Business philosophy: is to increase retail pharmacy revenue and sell high-end medical services.

Consumer healthcare: medical aesthetics, physical examinations, dentistry, pregnancy and childbirth, vaccine appointments, and genetic testing.

Internet medical care: online registration, consultation and prescription, Suqian Internet Hospital.

Drug types: health care products, over-the-counter (OTC) drugs, chronic disease drugs, prescription drugs and medical devices.

Source of medicine:

The "Yao Jingcai" one-stop drug procurement and service platform was established to cooperate with upstream supply partners. As of December 2020, the number of cooperating and serving customers exceeded 220,000.

JD.com’s Express Drug Delivery: has covered more than 300 cities across the country, providing users with next-day, same-day, 30-minute, and 7*24-hour drug delivery services.

Quality assurance: First of all, only chain stores that have obtained the "Internet Drug Trading Service Qualification Certificate" issued by the State Food and Drug Administration can enter JD Health. Secondly, when users place an order for medicines, they need to submit a "Pharmacy Service Form". JD Health will pass the required medicine information to the corresponding chain pharmacy, and the chain pharmacy will then distribute the information to each store. ” is frequently and heavily reviewed.

Delivery mode: self-operated logistics, third-party delivery, and in-store pickup. Because it owns JD Logistics and Dada, JD can choose the delivery method according to user needs.

Delivery time: We provide a variety of delivery options including same-day delivery, next-day delivery, 30-minute delivery and 24/7 fast delivery.

Shipping location: The company has 14 pharmaceutical warehouses and more than 300 non-pharmaceutical warehouses. Its “JD Express Drug Delivery” has covered more than 300 cities. Choose the nearest delivery date.

Doctors: More than 68,000 doctors have joined the platform (as of September 20, 2020), 62% of whom are from Grade 3A hospitals and 80% of them are attending physicians or above.

Product structure : In JD Health’s self-operated business, pharmaceuticals account for 27%, and health products and others account for 73%.

Revenue structure: JD Health’s self-operated pharmaceutical business accounts for 87.6%, the pharmaceutical e-commerce platform accounts for 6.8%, and medical and health services and others account for 5.6%.

Business system: B2C B2B 020.

Advantage: Self-built logistics

JD Health has the best warehousing and logistics systems in the industry. As of December 31, 2020, JD Health has a total of 14 dedicated pharmaceutical warehouses and more than 300 non-pharmaceutical warehouses nationwide. The layout of a large number of warehouses can also greatly improve the operational efficiency of JD Health’s logistics system.

Special features: Family doctor package.

Buy for one person, use for the whole family. Unlimited consultations to solve the diagnosis and treatment needs of the whole family.

2. Ali Health-Yilu

In 2014, Alibaba Group made a strategic investment in the pharmaceutical and health company, and on October 21 of the same year, it was officially renamed Ali Health.

In 2015, Ali Health app 2.0 was officially released and launched, and in March of the same year, Ali Health official website was launched.

In 2015, Ali Health resumed trading and obtained the right to operate Tmall's online medical business. Became a subsidiary of Alibaba.

On November 18, 2015, the revamped Ali Health official website was launched.

In 2016, it obtained the exclusive operating rights of Tmall Pharmacy.

After-sales Tmall medical products and services in 2018, covering all categories.

Market positioning: Online pharmaceutical e-commerce platform.

Profit model: Self-operated pharmacies selling medical and health products. And collect commissions from third parties on the line.

Business philosophy: We are committed to building a consumer medical industry ecosystem in Zune, including vaccines and physical examinations.

Consumer healthcare: physical examinations, vaccine appointments, and overseas services.

Internet medical care: online registration, follow-up visits and prescription medication, Yizhilu Health Encyclopedia.

Drug types: health care products, over-the-counter (OTC) drugs, chronic disease drugs, prescription drugs and medical devices.

Quality assurance: Ali Health acquired Guangzhou Wuqiannian Pharmaceutical Chain offline and obtained the C certificate for pharmaceutical e-commerce. Possess anti-counterfeiting and traceability detection methods.

Source of drugs: China Medicine 020, a pioneer alliance led by Ali Health, has absorbed more than 10,000 drugstores from more than 100 offline drugstore chains.

Delivery model: Rely on third-party delivery and Cainiao Network.

Delivery time: Depends on the delivery logistics speed.

Place of shipment: The system ships according to the address of the pharmacy where the goods were purchased.

Doctors: As of March 31, 2020, there were more than 42,000 contracted professional physicians, practicing pharmacists and nutritionists, including more than 29,000 attending physicians, deputy chief physicians and chief physicians.

Product structure : In Ali Health’s self-operated business, pharmaceuticals account for 61.7%, and health products, medical devices and others account for 38.3%.

Revenue structure: Ali Health’s self-operated pharmaceutical business accounts for 84.28%, the pharmaceutical e-commerce platform accounts for 12.92%, and medical and health services and others account for 2.8%.

Business system: B2C B2B 020.

Advantage: Traffic entrance.

Ali Health’s self-operated B2C platform has a price competitive advantage and Ali Health is connected to platforms such as Tmall and Taobao, with sufficient customer sources and abundant traffic.

Special features: Product traceability.

Ali Health is currently the only platform with a complete service mechanism for product traceability business. More than 7,200 companies have signed agreements with the Group to join the "Ma Shang Fang Xin" traceability platform. With the development and improvement of pharmaceutical e-commerce, drug and food safety will become the focus of people's attention, which will become a huge competitive advantage for Ali Health.

Summarize :

Comparing from various dimensions, the main source of overall revenue for JD Health and Ali Health is self-operated pharmaceutical business. There is not much difference between the two in their main business systems (online medical consultation and pharmaceutical e-commerce) and business models (B2C+B2B+O2O). From a product perspective, their main functions are similar.

JD Pharmacy is a pharmacy operated by JD Health. Backed by JD.com, it has a relatively stable source of goods and can ensure the normal supply of medicines. JD Logistics can ensure fast delivery of goods, reduce user waiting time and improve user experience. Similarly, Ali Health has gained an advantage by diversifying its traffic and relying on more comprehensive traffic entrances such as Alipay and Taobao.

Finally, after the core business is relatively stable, the two companies will explore new business development to meet diversified needs, but the specific results are still unknown.

3. User Value Analysis

In JD Health’s market, participants are divided into four categories: patients, pharmacies, doctors, and platforms. If the platform wants to expand its influence and quickly occupy the market, it must meet the needs of these three parties. So what are the needs of these three parties? Let’s explore how JD Health meets their needs!

1. User

According to statistics, the Internet medical market, which mainly consists of young people and economically developed cities, has benefited from increased penetration and more service content. It is expected that the market size will exceed 50 billion in 20 years. In addition, the main user group is 18-24 years old, and the number of Internet APPs installed in April 2019 exceeded 45 million, a year-on-year increase of 61%. Among them, registration and consultation platforms had the highest loading volume, with the number of users accounting for 50% during the same period, making it the most utilized Internet medical platform.

Offline drug purchase:

1) The situation is urgent and you cannot purchase medicines on your own

Nowadays, young people are under great pressure in the workplace. Serious overtime work can lead to various acute diseases, such as acute gastrointestinal diseases. They are unable to go to the pharmacy to buy medicine on their own. At this time, online drug purchases and door-to-door delivery solve this major problem.

2) Take care of family members and get medicine

According to data from iResearch Consulting, nearly 60% of JD.com's users are between the ages of 25 and 40. Not only are they in the stage of life with elderly parents and young children to take care of, they are also the main source of income for their families. Their demand for family health management is significantly higher than that of other users.

For many people who work far away from their parents, what they worry about and feel most guilty about is not being able to accompany their parents to the hospital. They also cannot know in time if their parents have any health problems, making it difficult for them to fulfill their filial piety. And because of the consumption concepts of their parents, they often don’t want to go to the hospital to get medicine when they are sick, and they delay it as much as possible, often turning a minor illness into a major one.

3) Privacy

Post-90s generation pursues "sexual happiness". According to conservative estimates, the scale of my country's adult products market reached US$6.6 billion in 2018, and the industry market scale will exceed US$8 billion by 2020.

The demand for sexual health products is increasing, but people are embarrassed to buy them directly from drugstores. At present, the sales channels of the domestic adult products industry are divided into online and offline parts. The offline part is influenced by traditional concepts, and the number of people entering the store to buy is limited.

Offline medical treatment:

1) Going to the hospital to see a doctor by yourself, the consultation experience is poor

The current medical hospital situation is tight and it is often difficult to get an appointment, leading to the embarrassing situation of "waiting in line for 5 hours and only seeing the doctor for 2 minutes".

The latest "White Paper on China's Family Medical and Health Service Consumption in 2020" released by iResearch Consulting shows that my country's per capita medical resources are generally insufficient. In 2019, there were only 1.79 doctors per thousand people. This means that in China, on average, 1.79 doctors have to serve 1,000 patients. The shortage of medical resources and the difficulty of seeing a doctor can be imagined.

2) Don’t want to go to the hospital for minor illnesses

People also have concerns about gathering places. There is a risk of cross-infection with other patients during offline medical consultations.

2. Pharmacy

According to the iMedia Data Center, the overall number of pharmacies in China has shown an overall growth trend, from 399,000 in 2010 to 524,000 in 2019, with a year-on-year growth rate of 7% in 2019.

Nowadays, drugstores are everywhere, so the competition pressure among drugstores has increased dramatically. Stores often hold promotional discount activities, but they still respond to Fanfan.

Nowadays, drug procurement is being carried out on a regular basis, and supervision of medical insurance, drug supervision, and taxation has been strengthened. Retail drugstores are facing challenges such as price declines, changes in commodity profit models, and rising operating costs such as rent. The competitive pressure on drugstores has increased dramatically.

How the pharmaceutical industry can achieve a balance between store expansion and sustainable development of the industry is also a question worth considering.

3. Doctor

70% of doctors believe their income does not match their workload

According to a survey by Sohu News, it is common to see doctors joking that they are selling cocaine but making money by selling cabbages. Is this true? The survey shows that only 30% of doctors feel that their salary matches their workload, while the remaining 70% believe that their income does not match their workload, and 19.79% of them feel that there is a serious mismatch.

What are the components of a doctor’s income? According to survey data, basic salary accounts for more than half of doctors' total income, hospital and department bonuses account for 30.22% of doctors' income, while welfare allowances, year-end bonuses, government subsidies, etc. only account for a small part of the income.

Therefore, doctors are eager to earn extra income to supplement their family expenses during their daily rest time. However, due to the nature of doctors' work and the relevant policies and regulations of the hospital, doctors often cannot find or have access to other industries. Since everyone has their own expertise, why not use your professional skills to earn income?

4. Platform

From the above analysis, we can find that in the matter of seeing a doctor and getting medicine, the existing pain points of users and the problems with the solutions are mainly:

1. The level of pharmacists in offline pharmacies varies greatly, making it difficult to accurately guide medication,
2. Time is tight and I can't go to the offline pharmacy to buy medicine,
3. The experience of going to the hospital for consultation and buying medicine is poor,
4. Do not go to the hospital for minor illnesses to avoid cross infection.
5. When a family member is sick and you are not around, you cannot accompany him to see a doctor
6. In terms of addressing privacy needs, there are issues such as not daring to open up offline processing, etc.
7. Similarly, doctors in hospitals also have a strong need to earn extra money to support their families.
8. Offline pharmacies also want to increase traffic acquisition entrances and expand store performance.

As a platform, how can JD Health better meet their needs and attract them to this platform?

1) Medical qualification level

JD Health has very strict requirements on the qualifications of doctors. JD Health has more than 68,000 doctors (as of September 20, 2020), 62% of whom are from Grade 3A hospitals and 80% of them are attending doctors or above.

We continue to focus on the integrated development of prevention, treatment and rehabilitation in specialized fields, and explore innovative Internet medical and health service models for specialized diseases. We have currently opened 14 specialized centers including the Heart Center, ENT Center, and Traditional Chinese Medicine Hospital, among which there are many top domestic experts and famous doctors, including ENT expert Han Deming, cardiovascular disease expert Hu Dayi, national famous traditional Chinese medicine doctor Gao Sihua, mental health expert Lu Lin, and many more. In the contemporary medical community, they all have resounding reputations, and each of them can be said to be a leader in the industry.

JD Health's specialty center brings together doctors and experts in the field of this disease. According to the characteristics of different diseases, it can provide users with integrated online and offline "prevention-treatment-rehabilitation" full-process medical and health services, including 24-hour online consultation, follow-up prescriptions, home delivery of medicines in as fast as half an hour, expert online consultation, and offline hospital famous doctor appointments.

2) Buying medicine

Control of delivery time.

There are two delivery methods for drugs sold on JD Pharmacy platform:

1. The supplier delivers the drugs to the purchasing user's delivery address through its own logistics distribution system;
2. The supplier entrusts JD’s distribution system, and after the drugs are shipped out of the warehouse, JD will deliver the drugs to the purchasing user’s delivery address.

Secondly, JD Health launched "JD Express Drug Delivery": it has covered more than 300 cities across the country, providing users with next-day delivery, same-day delivery, 30-minute delivery, and 7*24-hour drug delivery services. The transportation capacity of JD.com's "Express Medicine Delivery" service is relatively more guaranteed. Delivery personnel from Meituan and Dada platforms jointly provide "Express Medicine Delivery" delivery services to ensure that users can "buy and get delivered."

3) Quick consultation

In order to improve the experience of medical consultation and drug purchase, JD Health provides a variety of humanized consultation modes, including fast consultation on the home page to help users quickly locate departments, and provides consultation methods under different charging modes such as Beijing Medical Express Consultation, fast pictures and texts, and fast telephone calls, giving users more choices.

4) Free consultation on the epidemic

According to an announcement from JD Health, during the epidemic, the platform's average daily consultation volume reached 100,000 times, and during peak periods, the demand for consultations per hour was nearly 10,000 times. From January 26 to March 25, JD.com provided free consultation services for COVID-19 to more than 5 million people.

For minor illnesses and those who do not want to go to the hospital, or when they are not with their family and need to buy medicine for them, JD Health has a "Find a Doctor" function in the homepage navigation bar, which prompts users to find good doctors across the country who are available online for consultations. Users can accurately find doctors in different departments based on the symptoms of common diseases. "JD Pharmacy" provides health care, medical consultation and prescription, and can provide online medicine purchase and delivery within a limited time, providing users with a variety of medicine delivery services such as next-day delivery, same-day delivery, 30-minute delivery, and 7*24 hours.

5) Family doctor

"JD Home Doctor" is a concentrated reflection of JD Health's strong medical service capabilities. "JD Family Doctor" provides users and their families with 24/7 health consultation, unlimited specialist consultation and prescription services, face-to-face consultation with top experts, appointments at more than 2,700 hospitals, 48-hour online consultation with famous doctors, proactive follow-up services, health information collection and filing, health plan formulation and other value-for-money, heartwarming and practical family doctor services.

The Health Bureau learned that the "JD Home Doctor" released this time includes the Small Family Escort version priced at 799 yuan/year and the Whole Family Peace of Mind version priced at 1999 yuan/year. The main contents of the two are the same, and both can provide a full range of services such as online consultation, video calls, offline registration, consultation with famous doctors, medication services, daily health management, etc.; the difference is that "Small Family Escort" can be shared by 4 family members, while "Whole Family Peace of Mind" can serve 8 people, and the latter has more service times for some projects.

6) Privacy

JD Health's delivery service includes a privacy packaging service. Service introduction: When you purchase self-operated products marked with the "privacy packaging" logo, if you find that the product does not have privacy packaging, you can submit an after-sales application and provide valid certificates within 72 hours after the order is signed. After verification, we will arrange a return or exchange for you based on the situation of the product and give you compensation.

7) Doctor

Doctor salary system

According to Tencent.com, among the tens of thousands of part-time doctors who have joined the platform, many multi-point practicing doctors can also earn a considerable income by providing online services (such as video and telephone consultations). JD Health even announced on August 19, "China's Doctors' Day", that the platform will waive commissions for medical consultation orders that conduct online post-diagnosis follow-up management, in order to further help increase the service income of doctors on the platform. It is estimated that JD Health's current monthly revenue from online medical consultation alone has reached 10 million yuan, and almost all of this money is returned to the doctors who provide consultations. Here, doctors can also obtain more legal income with dignity.

8) Pharmacy

After entering the JD Health platform, the number of orders for emergency drug delivery has increased significantly

According to JD Health data, JD's "Emergency Drug Delivery" has launched a city-wide "same-city delivery" drug purchasing service in Chongqing, Chengdu and Shenzhen in collaboration with the flagship stores of local large-scale chain drug stores. In less than a week since the "urgent drug delivery" model was launched in the three places, the order volume has surged, reaching more than 20 times the order volume of ordinary O2O stores.

A relevant person in charge of Neptune Star Health Pharmacy introduced that Neptune Star has joined many pharmaceutical O2O platforms. Compared with other platforms, Neptune Star’s orders on JD.com’s “Emergency Medicine Delivery” have performed the best and grown the fastest recently. In January this year alone, its order volume increased by more than 300% year-on-year.

Summary: JD Health aims to provide online medical services to users who care about their health and do not have time to go to the hospital . The core users are as follows:

1. Users who care about health and want to learn about daily health knowledge
2. Users who do not have enough time and are not convenient to go to the hospital for consultation
3. Users who want to provide consultation services in different environments for their parents and family members
4. Users who feel reluctant to go to the hospital for minor illnesses
5. Users who need to purchase health products, over-the-counter drugs and prescription drugs
6. Users who need to purchase privacy products

wait…

Through the above analysis, we can find out why JD Health is so popular compared with other online medical software models.

4. Commercial Value Analysis

Relying on the various capabilities and resource advantages of JD Group, JD Health's core business is currently based on the four business segments of medical and health e-commerce, Internet medical care, health services, and smart solutions. It is gradually improving its "Internet + Medical Health" industry layout. Among them, JD Health's self-operated medical business accounts for 87.6%, and the order volume has surged. So how to judge whether this business can develop healthily? Next, we will analyze whether JD Health's core business is healthy based on the data indicator GMV?

1. Increase the number of platform users

In order to achieve sustained growth in revenue, a steady stream of new registered users is the most basic guarantee. So how does JD Health attract new users? Next, we analyze from two dimensions:

There are mainly two ways: paid channels and free channels.

1) Payment

First, we cooperated with platforms such as Tencent Video, Youku, and iQiyi to launch a large number of video advertisements.

Secondly, shoot heartwarming public welfare videos to touch people's hearts.

Finally push:

Ground promotion: JD.com's official ground promotion guys invite new users to register by giving out gifts or coupons in areas with large population flows or at the entrances of residential communities.

The brand awareness has been greatly enhanced through large-scale advertising marketing and offline promotion.

2) Free

First, relying on the powerful user traffic of JD.com, when searching for medicines in its search bar, the entrance to JD Health will pop up, providing traffic acquisition for JD Health.

Secondly, self-media video traffic - JD Health officially established a self-media account to produce high-quality videos, popularize health knowledge, pay attention to JD Health, and get more health knowledge.

3) Word of mouth

When the COVID-19 pandemic hit in 2019, JD Health launched a free online consultation service, which has served a total of 11 million people, leaving a very good reputation and with a net increase of 33.7 million new users in one year.

Thanks to JD Group's powerful ecosystem, offline JD supermarkets and JD Express have covered first-, second-, third- and fourth-tier cities. With the support of JD, we can often see JD Health advertisements in JD supermarkets and around JD Express couriers. Large-scale advertising and marketing has been deeply rooted in people's hearts and can greatly enhance brand awareness.

2. Improve conversion rate

After guiding users to register on the platform, it is also necessary to establish consumption scenarios, guide users to consume, and increase the conversion rate of registered users. As long as users generate purchasing behavior, that is, convert into paying users of the platform, they will be valuable to the platform. So what means does JD Health use to improve the conversion rate?

1) Simplify the registration process

The first step is to guide users to register. JD Health has taken the front-end interaction principles to the extreme, greatly shortening the user operation path. Through multiple registration methods and one-click login, users can complete registration.

2) Guide transactions

In the second step, after the user successfully registers and logs in for the first time, a pop-up window with "Exclusive benefits for new users" will appear on the homepage, including a 0.01 small first aid kit, free and fast consultation, etc., to guide the user to click on the transaction.

And we will display the promotional activities in the form of homepage carousel and flash sale to increase the conversion rate:

3) Promotional offer carousel

Display promotional activities in a carousel on the home page, such as enjoying a family doctor for 1 yuan, purchasing for 1 yuan, etc., to guide users to click and increase their desire to buy.

4) Health Flash Sale

For daily consumers of medical products, we launch “health flash sales”, for example, 100 masks for 9.9 yuan, displaying the opening time and countdown, showing the special price, and emphasizing its cost-effectiveness. Stimulate users' eagerness to buy.

Increase click-through rate (0-cost consultation) and attract users to experience and use it.

Give out consultation experience cards to attract consultation experience.

In the third step, after the user clicks on the consultation service, on the doctor search list page, click on the doctor's homepage to display the doctor's detailed information. For example, the rate of favorable comments, number of patients received, and waiting time will be used to create popularity by saying "a certain user consulted this doctor a few minutes ago" to dispel users' concerns about medical consultation, and the doctor will be provided with a variety of consultation services to facilitate users to choose according to their needs. Thereby increasing the conversion rate.

Therefore, in this link, users who generally have consultation needs can directly receive consultation services.

3. Increase average order value

The average order value is affected by two factors: the single purchase amount and the purchase frequency, and JD Health’s GMV is affected by the single purchase price and the number of purchases. So how does JD Health increase the average order value and the number of purchases?

1) Increase the single purchase amount

First of all, JD Health regularly launches discount coupons and offers discount activities for those who redeem coupons and spend a certain amount of money.

Coupons for discounts will be provided to users from time to time to stimulate them to group purchase and get discounts, which helps to increase the amount of each user's single purchase.

Secondly, after the user completes the consultation service, the doctor will directly prescribe a prescription after communicating the condition. The user does not need to purchase separately according to the prescription, but can directly click on the prescription, make an appointment to purchase, and jump to the settlement page. Complete the entire process from consultation to drug purchase for users. Thereby increasing the average order value.

2) Increase purchase frequency

In JD Health's product, the core business is medical e-commerce, so increasing purchase frequency has also become the key to increasing GMV. How does JD Health increase purchase frequency? That is to increase the user's repurchase rate through the ultimate user experience.

First of all, users have a good experience in purchasing medicines .

What users care most about is delivery speed. JD Health provides a variety of delivery services because of its own logistics and 14 pharmaceutical warehouses. Choose the nearest delivery date.

The platform also has JD.com’s Express Drug Delivery, which has covered more than 300 cities across the country, providing users with next-day, same-day, 30-minute, and 24/7 drug delivery services. Provide users with extremely fast delivery experience.

Secondly, after-sales service ,

1. When purchasing medicines on JD Health, you can consult pharmacists online for medication details and prescription information. It supports cash on delivery and has a clear price protection and return policy.
2. 950619 customer service hotline opened

With the opening of JD Health’s customer service hotline 950619, in the future, any information, rights, after-sales, etc. related to physical orders such as JD Health Internet Hospital’s medical services, health management services, insurance services, medicines, nutrition and health care, medical devices, etc. can be consulted or feedback to customer service through this phone. Customer service staff will assist users in efficiently solving related problems.

From the above analysis, we can find that JD Health has done a lot of work to optimize its revenue model, constantly attracting new users and improving conversion rates and average order value. At present, the results are still very good, so investors continue to increase their investment, because the commercial value of JD Health is still quite large.

5. Product Iteration Analysis

In order to deeply analyze the version iteration rhythm of JD Health and explore the product iteration logic, all the core version iterations of JD Health from V1.1.0 to V2.3.2 are summarized as follows:

According to the curve distribution of JD Health's cumulative downloads on Kuchuan, we can see that the number of users has surged since V2.1.6 (that is, starting from December 3, 2020), and has maintained a stable and continuous growth since then, without a downward trend. This shows that JD Health is still in the growth stage and has a large room for growth. It belongs to the "J-type" curve, so JD Health is divided into two stages for analysis:

1. Start-up phase

Before December 3, 2020, versions V1.1.0-V2.1.2 were the cold start phase of JD Health's mobile products. The main goal of this phase was to verify user needs and polish the user experience.

The main operation is to display the existing basic functions of offline hospitals through mobile terminals. All functions are tool-based, such as online drug purchase, online doctor consultation, health packages, family doctors and other functions. These are to help users complete the basic medical and health service process of drug purchase-consultation-health consultation.

As the number of users on the platform increases, the problems of diversified drug purchasing needs and medical consultation needs in different environments are gradually exposed. In order to help users meet their own drug purchasing needs and medical consultation services more comprehensively, and at the same time give pharmacies more orders to improve performance, the "Mall Category Expansion!" and the global shopping function were updated in versions V1.1.3 and V1.2.0 to enrich the products and optimize the SKU display.

In order to meet the consultation needs of users at different levels, the functions of "General Practice Consultation" and "Specialty Center Mobilization" were launched in version V1.2.2, so that the general practice clinics are open all the time and doctors are online 24 hours a day, 7 days a week. Experts from all disciplines gathered together!

From this stage, the APP rankings have steadily increased, from 44th place at the beginning of its launch on March 14, 2020 to 12.9 of the same year to quickly rise to the first place in medical apps. The main reason is JD Health's deep accumulation in the early stage, taking "ultimate user experience" as the product development direction, focusing on polishing products and user experience.

2. Phase 2: Build operation tools and explore interactive and interesting interactive scenarios

From December 2020 to the present, the version from V2.1.6 to V2.3.2 is a rapid growth period for JD Health. It can be seen that the user growth rate continues to rise in this stage. Expanding new users and retaining old users has become the focus of product iteration.

In terms of expanding the number of users, the V2.1.6 version has added a new [Newbie Gift Pack] module, launching a "647 yuan newcomer gift package upgrade, come to the health medicine box for 1 point purchase"! to attract new users to register.

In terms of retaining old users, JD Health continues to optimize basic functions at the product level, including consultation process, drug purchase process, order details page, nominal free medical consultation, etc., further improving the experience and conversion rate of App users' consultation and drug purchase.

At the same time, JD Health has enhanced user stickiness through some new interactive fun functions, such as the [Health Challenge] health task system is richer, "Walking to exchange money, sharing red envelopes, etc.", and then continues to launch the [Weight Loss Challenge List] [Daily Health Tips] [Rule Refuting Challenge] in the V2.3.0 and V2.3.2 versions to increase user activity and enhance user stickiness.

In addition, on the basis of a large number of users, in order to improve the conversion rate, V2.3.2 version launched activities such as [National Authoritative Famous Doctor 1 Yuan Question] to improve JD Health's GMV.

Overall , JD.com has a very good sense of rhythm control. Focus on polishing products in the early stage to improve user experience. Gradually improve the version iteration and migrate offline scenarios online. When the user experience becomes stable, JD Health begins to try new application scenarios in product form, launches multiple interactive and interesting functions, and establishes a complete task system to meet the retention and attract new users. According to the "J" curve, JD Health is still in the growth stage at present, and we will wait and see the subsequent development of JD Health!

6. Product structure analysis

In the iterative analysis, we analyzed the iterative steps of JD Health's product functions. Next, let's take a look at what users' needs meet and how they are distributed throughout the app. This is mainly analyzed through product structure. The following figure is the product structure brain diagram of JD Health V2.3.2:

For the sake of analysis, the author will get the following table by re-examining the product structure of JD Health according to users, scenarios, needs and functions:

Because the main target users of the mobile terminal are the patients who purchase drugs and the users who consult and purchase drugs, these two types of users have needs when using JD Health.

When the patient uses JD Health, there are two major scenarios:

1. Make sure that before purchasing a certain type of medicine, you can understand the content you care about through the APP, such as price, quality, after-sales service, and distribution; after purchasing the medicine, you hope to track the logistics distribution status, precautions for the use of medicines, and other after-sales service issues.
2. If you do not know how to buy a certain type of drug, you need to consult a doctor to get drug information.

Scenario 1. For users with clear goals, the search box at the top of JD Health’s multiple entrances can search for drug names, categories, etc. The system fuzzy query based on the keywords and displays the drugs in turn. If users want to compare prices, sales volume, etc., under the product list page, multiple filtering functions are provided, such as new product priority, sales ranking, price level, brand, applicable population and other search conditions. After finding the drug you have confirmed to purchase, users need to understand the brand, efficacy, after-sales service and instructions of the drug before confirming the purchase. They can learn about the basic information of the drug through the product details page. Through the optimization of these functional modules, users can experience a relatively complete pre-sales experience on JD Health and have a preliminary understanding of the drugs they need to purchase.

Relying on the advantages of JD.com’s e-commerce platform behind this, JD.com also has a complete set of procedures for users to purchase medicines when purchasing medicines.

When purchasing medicines, users need to add, delete and change the quantity and category of drugs according to the needs of purchasing medicines, as well as selecting delivery addresses, delivery time, etc. to achieve accurate and accurate completion of the drug purchase needs.

Of course, after purchasing drugs, users need to pay attention to the delivery status of the purchased drugs. After receiving the goods, when order evaluation and after-sales service are required, users can view order logistics, comment pictures, apply for after-sales service in my order, and contact customer service.

Scenario 2 : When a patient is sick or helps his family buy medicine, but it is not clear that he needs to consult the user if he buys a certain type of medicine. JD Health has also launched two modes: Speedy consultation and seeking a doctor for consultation. Speedy consultation is when the user describes the condition through text, the system automatically matches the doctor and prescribes the prescription, and the user can upload prescriptions at JD Pharmacy to purchase medicines. The functions of finding a doctor are more diverse. Users can selectively order "graphic consultation", "phone consultation", "video consultation", "private doctor" and other methods to accurately consult the doctor and prescribe prescriptions.

Let users have more choices in consultation experience for different situations. Meets the consultation needs of different classes.

Finally, after the user's consultation is over, the user wants to check his or her consultation records. You can check the list of all the consultation records in my or my consultation. This consultation can be followed up or viewed. This consultation can also be evaluated by a doctor.

If you want to view the prescription information prescribed by the doctor after each consultation, you can click on my medication record to view the prescription and medication recommendations prescribed by the doctor after each consultation.

7. Operational Analysis

The saying "Products are responsible for giving birth, and operations are responsible for raising them" also indirectly reflects the close relationship between products and operations. So how did JD Health operate this product so that it can become the industry leader in a short period of time? Next, we use the AARRR model to analyze the main operating activities of this software.

1. Pull new A

Open-screen advertising : Cooperate with Tencent Video, Youku, iQiyi and other platforms to launch a large number of video advertisements.

Self-media operation : JD Health officially established a self-media account, and released high-quality videos through short video platforms such as Douyin and Kuaishou, popularized health knowledge, and was deeply rooted in people's hearts.

Offline promotion : The official local promotion guy invites new users to register in major areas with large population traffic or at the entrance of the community by issuing gifts or coupons.

Promotion of public welfare micro-film : Release the New Year's commercial "Daughter" and the public welfare brand short film "Changjian Year", a micro-film-style commercial with a high degree of completion. It injects more emotional added value into JD Health's brand, deepens emotional memory points, strengthens brand awareness, and increases brand favorability.

2. Promote A

When users download and register a strong user base, they need to guide users to use the app, thereby improving the daily and monthly active users. In order to improve user activity, JD Health mainly uses push messages:

• Launch (0 yuan consultation)
• Send a consultation experience card
• Get the medicine at 0.01 yuan
• Newcomer Gift Pack

3. Retain R

After promoting user activity, it is also necessary to improve user retention rates in order to continuously create value for the platform. In order to improve user retention rates, JD Health has mainly done the following things:

Establish a complete task system such as:

• 【Rumor Refutation Challenge】Receive gold coins when answering questions
• [Health Challenge] The health task system is richer "Walking to exchange money, sharing red envelopes, etc.
• 【Healthy Gold Grab】Sign in and receive health coins
• 【Daily Health Tips】Popular health knowledge
• 【Weight Loss Challenge List】

4. Analyze and spread

In order to guide user communication and improve brand recognition, JD Health has made the following changes:

• Added [Health Assessment] to answer questions and evaluate physical condition, share with friends to check in
• Added [Rumor Refutation Challenge] to receive gold coins when answering questions, share the wrong answers to friends to get answers opportunities

5. Increase income

Regarding the methods to increase GMV revenue, we have a detailed introduction in the commercial value analysis section, and will not go into details here.

8. Future Outlook

Through the above analysis, we have understood the reasons for the rapid rise of JD Health. So where will this "head" unicorn go in the future? Next, the author will use the SWOT model to conduct a system analysis, hoping to draw effective conclusions from it.

Through the above analysis, we can find that if JD Health wants to continue to develop, the author believes that:

First, change the strategic layout idea, and "surround the city in the countryside". Now in first- and second-tier cities, the Internet medical industry is rising and the competition is high, but it is ignored. Nowadays, the rural population base is large, and the number of netizens is gradually increasing, and the differences between urban and rural netizens have gradually narrowed. The author believes that JD Health can be promoted in the countryside in general, taking village doctors as the starting point, establishing self-operated pharmacies in townships, and popularizing the delivery process and time of urgent delivery of medicines. Develop villagers' usage habits and brand awareness.

Secondly, in terms of drugs, JD Health has further cooperated in depth with well-known domestic and foreign pharmaceutical companies to further improve the drug supply chain and improve the accessibility of drugs and the advantage of prices from the source. 2. In terms of delivery, we will further expand the number of pharmacies online and increase the coverage of cities, so that users can quickly obtain drug delivery without going out. Make the advantages more "advantage" and deeply rooted in people's hearts.

Finally, establish a comprehensive operator negotiation team. First, expand the user traffic entrance. The base of domestic Internet users is large, and the current traffic entrance is still too single. Do not allow users to understand "JD Health" through "JD". The second is to increase cooperation with local government agencies to obtain more medical resources.