TikTok parent company buys chain of VIP birth centres in China

The parent company of TikTok is becoming part of a hot new trend, though this one doesn’t involve the video-sharing app’s signature dance challenges and addictive videos.

Instead, Chinese firm ByteDance is joining the ranks of fellow tech companies like Amazon and Apple by pushing into the healthcare space, raising questions about health ethics and market consolidation.

Through its Xiaohe Health subsidiary, ByteDance spent a reported $1.5bn in August to acquire Amcare Healthcare, a private hospital chain known for offering maternal, women’s and children’s healthcare to the Chinese elite. Its VIP postpartum package, for example, costs more than $30,000 for a month stay in a luxury hotel-like hospital.

The acquisition is one of the largest in the Chinese tech sector since authorities began to crack down on large-scale mergers and “disorderly capital expansion” in 2020.

It continues a string of health acquisitions for the company, which has invested in drug discovery, online mental health and digital medical encyclopedia companies in recent years.

Rui Ma, founder of investment consulting firm Tech Buzz China, told The Information on Friday that these online medical businesses, while popular, aren’t extremely profitable, so the company may be seeking a footprint in the physical retail space.

“The best argument I’ve seen so far on why they changed strategy is that, well the digital strategy isn’t working,” she said. “This is for sure a good market opportunity – I don’t know if it’s the best opportunity, but it’s possible that given competition in other areas…this is the best strategy left for ByteDance.”

Most Chinese people have state insurance, but a smaller portion of wealthy citizens seek out private care, and sometimes go overseas for treatments like in vitro fertilisation. Amcare is licensed to perform IVF within China, a treatment recently added to the coverage list under state insurance.

ByteDance may be hoping it can find new customers among the roughly 600 million daily users who are hooked on Douyin, the Chinese version of TikTok, which features deeper integration with e-commerce than its US counterpart.

The pairing might seem a strange one, but a number of leading Chinese companies – as well as tech American giants – are racing to mix tech and health.

Tencent has experimented with opening brick-and-mortar clinics, while Alibaba and both run online pharmacies.

The health industry is valued at $89bn in China, according to Bloomberg.

Silicon Valley companies have pursued a similar strategy.

In July, Amazon purchased the boutique clinic chain One Medical for $3.9bn, and Apple has increasingly integrated its Health app into products, allowing participating medical providers to use its devices to store patients’ medical records.

Chief executive Tim Cook once said Apple’s “greatest contribution to mankind” will be through its health technologies.

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