Who We Are
We provide supplies and SaaS to hospitals and pharmacies, digital marketing services to pharmaceutical companies, and online consultation and prescriptions to patients, all centered around chronic condition management. We have been, and expect to continue to, generate a majority of our revenues from sales of supplies to hospitals and pharmacies in the near future.
We aspire to lead China’s digital chronic condition management market through our solutions serving all major participants in the healthcare value chain, including hospitals, pharmacies, pharmaceutical companies, patients and doctors. According to the Frost & Sullivan Report, we are the largest digital chronic condition management solution provider in China, in terms of numbers of SaaS installations in hospitals and pharmacies in China, each as of December 31, 2021, and number of online prescriptions issued through our services in 2021.
Our offerings include our in-hospital solution, our pharmacy solution, and our individual chronic condition management solution. Our in-hospital solution consists of sales of medical devices, consumables and pharmaceuticals, our hospital SaaS, and digital marketing services to pharmaceutical companies. We primarily sell medical devices and consumables to fulfill hospitals’ needs of chronic condition management for patients; our hospital SaaS product improves the efficiency and effectiveness of in-hospital chronic condition management; leveraging our hospital network, we also offer pharmaceutical companies digital marketing services, primarily for drugs related to chronic condition management. Our pharmacy solution consists of sales of medical devices, consumables, pharmaceuticals and miscellaneous, and our pharmacy SaaS. The supplies we sell to pharmacies are primarily related to chronic condition management, while our pharmacy SaaS product enables pharmacies with online prescription issuance and fulfillment capabilities. Our individual chronic condition management solution connects doctors and patients to achieve out-of-hospital consultation and prescription for chronic condition management. Our revenue sources include product revenue and service revenue. We mainly generate revenues from sales of hospital and pharmacy supplies and individual chronic condition management products. We also generate revenue by providing digital marketing, SaaS and other services.
Our Solutions and Revenue Sources
China has the world’s largest chronic condition patient population, with a significant portion of healthcare spending on chronic conditions. According to the Frost & Sullivan Report, Chinese patients spent approximately RMB4.1 trillion on chronic condition management in 2020. While chronic condition patients usually need on-going medical care and recurring prescription, which require both in- and out-of-hospital services, China’s healthcare services are still heavily concentrated in public hospitals, according to the Frost & Sullivan Report. Public hospitals also have more medical resources and doctor-patient relationships, which are important for chronic condition patients.
In order to capture the existing in-hospital chronic condition management market and extend such market to out-of-hospital scenarios, we have adopted a hospital-first strategy to provide a comprehensive chronic condition management experience for patients in and out of hospitals. We attract hospitals, pharmacies, pharmaceutical companies, doctors and patients, and provide them with solutions covering major chronic conditions, including cardiovascular diseases (such as hypertension and hyperlipidemia) and diabetes, among others.
Through our comprehensive offerings of in-hospital solution, pharmacy solution and individual chronic condition management solution, we have covered the full life cycle of digital chronic condition management in and out of hospitals. Our revenue sources include product revenue and service revenue. We mainly generate revenues by sales of hospital and pharmacy supplies, and individual chronic condition management products. The medical devices and consumables sold under the in-hospital solution, pharmacy solution and individual chronic condition management solution vary in terms of nature, function and type. The medical devices and consumables sold under the in-hospital solution are for hospital use, and they generally require patients to come into hospitals. In contrast, the medical devices and consumables sold under the pharmacy solution and individual chronic condition management solution are for home use. We also generate revenue by providing digital marketing, SaaS and other services. We have achieved growth in our digital marketing service business, which has a relatively high gross profit margin, and this has contributed to a significant portion of our gross profit since we launched our digital marketing services in 2019.
In-hospital solution
Our in-hospital solution includes hospital supplies of medical devices, consumables and pharmaceuticals, our hospital SaaS, and digital marketing services that we provide to pharmaceutical companies. For our in-hospital solution, we primarily generated revenues from sales of hospital supplies during the Track Record Period. Leveraging our hospital network, we distribute hospital supplies to our hospital end customers for our suppliers, either directly or indirectly through our distributors. The hospital supplies that we provide primarily relate to chronic conditions, such as glucose meters, glucose testing strips and vital sign monitors, to fulfill hospitals’ needs of chronic condition management for patients. During the Track Record Period, based on our internal records and to our Directors’ best knowledge, we did not directly or indirectly sell drugs to public medical institutions, and considering China’s current “two-invoice system” regulations we do not intend to do so. See “Business — Risk Management and Internal Control — Two-invoice system and national centralized procurement using a VBP approach” for details. Our hospital SaaS, ClouDr. Yihui, was launched in 2016 and the first of its kind in China to digitalize and standardize the in-hospital chronic condition management process. Leveraging our hospital network, we also offer pharmaceutical companies digital marketing services, primarily for medicines related to chronic condition management, to boost the medicines’ awareness and support clinical decisions. We have achieved growth in our digital marketing service business, which has a relatively high gross profit margin, and this has contributed to a significant portion of our gross profit since we launched our digital marketing services in 2019.
We grow our business in hospitals with the “Access, Install, Monetize” model, or the AIM model. This three-prong model outlines our concurrent efforts to access hospitals and establish business relationships, install our hospital SaaS to increase stickiness of hospitals, and seek monetization opportunities through our in-hospital solution. As of December 31, 2021, more than 2,300 hospitals had installed ClouDr. Yihui, including 33 of China’s top 100 hospitals as ranked by the Institute of Asclepius Hospital Management, a third-party medical research firm. As of December 31, 2021, we had contracted with 15 pharmaceutical companies to provide them digital marketing services. Our in-hospital solution have allowed us to successfully build deep connections with hospitals, laying a solid foundation to extend our businesses to out-of-hospital settings.
Pharmacy solution
Our pharmacy solution fulfills chronic condition patients’ need for out-of-hospital consultation and prescription services, through our pharmacy supplies of medical devices, consumables, pharmaceuticals and miscellaneous, and our pharmacy SaaS. For our pharmacy solution, we primarily generated revenues from sales of pharmacy supplies during the Track Record Period. We provide, directly or indirectly through our distributors, pharmacy supplies that primarily relate to chronic condition management. Leveraging our pharmacy network, we distribute pharmacy supplies to our pharmacy end customers for our suppliers, either through wholesale to distributors or direct sales to end customers. Our pharmacy SaaS enables pharmacies with online prescription issuance and fulfillment capabilities. We also provide value-added services, such as a new retail service that offers e-commerce solutions on Weixin mini programs, and inventory management services.
Historically, our pharmacy solution business consisted of only sales of pharmacy supplies. Launched in the first half of 2019, our pharmacy SaaS, ClouDr. Pharmacy, had already been installed in 172,000 pharmacy stores in China as of December 31, 2021, covering approximately 30% of the pharmacy stores in China, making us the largest pharmacy SaaS product provider in China in terms of number of pharmacy installation, according to the Frost & Sullivan Report.
Individual chronic condition management solution
Our individual chronic condition management solution connects doctors and patients, mainly through our doctor and patient mobile apps, mini programs and Weixin public account, to enable out-of-hospital monitoring, consultation and prescription for chronic condition patients. For our individual chronic condition management solution, we primarily generated revenues from sales of chronic condition products for individual chronic condition management solution during the Track Record Period. Through this solution, we strive to provide patients with convenient, efficient and comprehensive online consultation and prescription filling experience as a “anytime, anywhere” healthcare management platform, which we believe can address the long-term medical needs of chronic disease patients. We had over 87,000 registered doctors and approximately 23.8 million registered users as of December 31, 2021. As part of our platform to deliver these services in compliance with relevant regulations, there currently are three offline medical institutions (including one self-owned institution and two third-party institutions) whose licenses supported us in setting up three internet hospitals that hold their own licenses, which allow us to provide our online consultation and prescription services through our online applications to patients in different provinces across China, and this approach conforms with the relevant licensing requirements. We focus on providing online services to patients, and our self-owned offline medical institutions generally did not provide any services during the Track Record Period. Our online consultation and prescription services focus on chronic condition management, which requires long-term treatment, the re-filling of prescriptions and condition management. Our online hospitals do not provide initial or physical diagnoses to patients, and our services instead focus on serving chronic condition patients who have already obtained their initial diagnoses elsewhere and require renewal prescriptions. As our internet hospitals cannot conduct physical diagnosis or in-person treatment due to the internet-based nature of our operations, doctors on our platform may ask the relevant patients to go to competent offline hospitals to receive necessary treatment and/or diagnosis according to our platform requirement, consistent with the doctors’ professional duties to patients.
Through our solutions, we are able to serve a large base of individual users. In 2021, approximately 153.4 million prescriptions were issued through our services, making us the largest online medical services provider in terms of number of prescriptions, according to the Frost & Sullivan Report.
Source: ClouDr Group (09955) Prospectus (IPO Date : 2022/06/23) |