Zdeer banks on smart technologies to expand presence in wellness segment

Chinese healthcare startup Zdeer is tapping into rising demand from young consumers by launching technology-driven moxibustion products, as more internet companies are jumping onto the wellness bandwagon amid the COVID-19 pandemic.

Moxibustion is a type of traditional Chinese therapy that burns dried moxa－a cone or stick made of ground mugwort leaves－on particular areas of the body. The main function of moxibustion is to relieve pain or illness via the application of heat.

"Gone are the days when health maintenance is only conducted by the middle-aged and the elderly. Today's young people, especially those working in the internet sector, face health problems earlier than expected," said Zhu Jiangtao, founder of Zdeer.

"It is also why we want to enter the healthtech industry. Through technology and innovation, people of all ages can keep in good health anywhere and anytime," Zhu said.

Zhu explained that "healthtech" refers to the use of leading technologies such as artificial intelligence and big data in the healthcare sector including daily healthcare and protection, as well as disease diagnosis and treatment.

To tap into such demand, the Wuhan, Hubei province-based company has developed a slew of smart electronic devices related to healthcare, including smart moxibustion devices and smart steam foot baths.

The smart moxibustion device, priced at 299 yuan ($46), allows users to undergo treatments simply by placing the device on different parts of the body. The device is about the size of a mobile phone.

"Compared with the traditional way of moxibustion, the smart moxibustion device leverages modern heat treatment technology and is able to achieve moxibustion with no smoke," Zhu said.

"It also incorporates more modern smart technologies, such as wireless portability, Bluetooth control and other functions. Young consumers carry out treatments on their own at anytime and anywhere," he said.

Zhu added that all of Zdeer's products use tech giant Xiaomi Corp applications so that customers can easily operate the process through smartphones.

As some consumers doubt whether the effect of smart moxibustion would be the same as that of traditional moxibustion, Zhu said that the company discovered through significant scientific research that the three core functions of moxibustion－the medicinal benefits of wormwood, warming effects and optical effects－can all be achieved via the smart device.

"The research and development expenditure accounts for around 20 percent of the company's revenue every year, which is a big sum for a startup," Zhu said.

In June, the five-year-old healthtech brand secured tens of million yuan in a series A round of fundraising led by Tiantu Capital. It has also raised funds from Hillhouse Capital's GL Ventures.

"We are optimistic about the continued growth of the healthcare sector. In line with the current health rejuvenation and consumption upgrade, more and more young consumers are starting to pay attention to healthcare products," said Pan Pan, managing partner of Tiantu Capital.

Therefore, healthcare products on various platforms are seeing explosive growth, Pan said, but the overall products on the supply side are mostly for the elderly.

"It is difficult to effectively meet the needs of young consumers. Only products with innovative capabilities and with aesthetics appealing to young people can quickly stand out in the market," he said.

A report conducted by CBN Data showed that online shopping now constitutes a key feature of the behavior of young consumers, with the post-80s being the nucleus and the post-90s catching up in being the primary drivers of this transition.

"The Zdeer team has verified its innovation ability and potential consumer demand through the smart moxibustion box product. In the future, we believe it will continue to develop new products and upgrade the sector with more technological and intelligent products," Pan added.