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Tencent making a move into healthcare

By Mu Chen | China Daily | Updated: 2014-09-05 07:20

Tencent Holdings Ltd has invested $70 million for a minority equity stake in, China's largest online healthcare service community, with the transaction expected to be completed by the end of the month.

Tencent President Martin Lau said that the company has been closely following the healthcare sector and identified DXY as an industry leader.

"Tencent is capable of connecting DXY's talented pool of healthcare professionals and their medical knowledge database with tens of millions of users," Lau said. "This improves the ease with which our users can access healthcare information and professional medical help."

The size of the stake was not disclosed.

DXY's portal for Chinese physicians and life science professionals has more than 4 million registered members. It allows industry professionals to exchange ideas, discuss new findings and have access to new clinical findings and industry news.

One of DXY's strategic goals is to move from serving doctors and healthcare companies to consumer healthcare. By teaming up with Tencent, DXY can bring its services to consumers on existing Tencent platforms, including Internet messaging apps WeChat and Mobile QQ, a company statement said.

DXY will use the capital from Tencent to develop its consumer healthcare products, such as the Family Medicine App and DXY Doctor.

Tencent has made other high-profile moves this year, such as a $500 million investment in South Korea-based games developer CJ Games Global Corp and the purchase of stakes in domestic e-commerce websites Inc and Inc, worth $214.7 million and $736 million respectively.

The DXY investment is the Internet giant's first foray into the health industry.

Chen Yiyou, CEO of Percans Oncology and former chief scientist at Silicon Valley-based Crown Bioscience Inc, said that the investment by Tencent is good for the healthcare sector and makes strategic sense for the company.

"The investment was made on the basis of market analysis. As the Chinese economy and living standards improve, there will be a much greater emphasis on healthcare," Chen said. "This investment is a way into the sector for Tencent, and it will be part of a longer-term strategy. For its part, DXY will reap more immediate rewards with access to large numbers of consumers through Tencent's market reach."

Last month, Spring Rain, China's leading mobile healthcare company with 30 million registered users and 40,000 doctors, said it had raised $50 million through its Series C financing. The Spring Rain mobile app functions as a "clinic in the air" where users can communicate directly with doctors either by instant message or telephone.

Cai Xiao contributed to this story.

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