Techcrunch reported that TikTok's parent company - ByteDance is betting quite heavily on the healthcare sector when it acquired Amcare, a company that operates high-end hospitals for children and women across China.
According to Bloomberg, the buyback is worth $1.5 billion. A spokesperson for Xiaohe Health, ByteDance's healthcare sales department, confirmed the acquisition and declined to say about the scale of the deal.
This acquisition is creating some turning points in the technology industry.
Over the past few years, China has increased anti-competitive regulations against technology companies and blocked large-scale mergers, one of which included a proposal from Tencent (a company that provides media, entertainment, Internet, and online advertising services in China) to combine the country's two leading streaming platforms for gamers.
It is not uncommon to see Internet giants in both China and the US entering the healthcare sector as part of a diversification strategy when they have capital and a user base to exploit.
In addition to ByteDance, Tencent has tried opening traditional clinics, and has " granted" a lot of attention to the health care sector. In addition, Alibaba and JD.com also said they are running online drugstores.
Short video giant ByteDance may not take over Amcare's management, but they are planning to connect their healthcare portfolio with newly acquired companies that run private household appraisal departments favored by the Chinese middle class and upper class.
Previously, ByteDance's breakthrough in the healthcare sector began in 2020 when they bought a company that provided health information to the public.
Later, ByteDance's healthcare business became known as Xiaohe Health.
The company's interest in this field is expanding, with an increasing portfolio including a drug research company and a DNA synthesis company.
It is known that China's search giant Baidu (similar to Google) has shown the potential risk of linking " ambitious" advertising businesses and health businesses.
In 2016, when information appeared that a student (who died of cancer) borrowed money to pay for an unsuccessful treatment while watching an advertisement on Baidu's search engine, it caused public outrage.
Therefore, the health business of many companies is being considered unreliable and unrealistic by the Chinese community.
However, this is also expected if ByteDance knows how to combine the "entertainment industry" with its "famous" healthcare and biotechnology sector.
ByteDance is very proficient in converting users from a long-standing platform to a young platform to help the platform develop.
China's short video app Douyin, which reaches 600 million active users, can easily insert a few promotional clips for its healthcare services.
However, this needs to be done cautiously and responsibly, avoiding "catching the heels" of the mistakes of previous companies.
