BEIJING/SEATTLE: Tech giants in both Asia and America are entering the health space, as Alipay introduces free health insurance for users and US pharmacies feel the heat of a potential Amazon debut.
Alipay, part of Chinese e-commerce behemoth Alibaba, has launched a free health insurance service in China that lets users under 60 accumulate a certain amount of insurance coverage every time they make a payment with their Alipay Wallet.
The service, Dabing Wuyoubao (welfare version), has been launched in partnership with Taikang Insurance, Marketing Interactive reported. After clicking a simple "immediately receive" link, users can build up a pot of insurance with each payment, up to a limit of RMB 2,000.
With no medical examination required, the service covers users for a year, from which they can claim in-app if diagnosed with one of 25 'major diseases' specified in the policy, provided they upload proof of diagnosis.
The move signals the Chinese e-commerce giant's ambition to grab market share in the country's fast-growing online health insurance market, which, according to accounting firm EY, is forecast to reach a value of RMB 5 trillion by 2020.
Meanwhile, CNBC reported that another e-commerce giant, Amazon, has begun hiring for its "Professional Healthcare Program", in a response to the increase in high-deductible plans and a trend toward US consumers paying for healthcare.
The US mail order pharma market has been kind to companies entering the space, with CVS Health Corp.'s mail-order business netting $10bn in Q1 2017 alone. If Amazon's offer competes on price or convenience it could significantly disrupt the market.
Some commentators suggest Amazon's entry could "introduce a lot of transparency to what drugs really cost", according to health entrepreneur Stephen Buck, who estimated an opportunity of between $25bn and $50bn for Amazon.
However, there are challenges to entering the health market, which is tightly regulated around the world. "Prescription transfer laws and e-prescribing make it a little more difficult than putting something in a cart and checking out," Buck noted.
So far, Amazon has declared no plans to enter the health insurance space, though examples such as Alipay's demonstrate how a high-penetration platform allows tech companies to provide services that piggyback onto existing user behaviour.
Data sourced from Marketing Interactive, EY, Bloomberg, CNBC; additional content by WARC staff