ByteDance, the parent firm of TikTok, has made a significant investment in China’s healthcare sector by acquiring Amcare, a network of high-end children’s and women’s hospitals.
ByteDance paid $1.5 billion for the acquisition. ByteDance’s healthcare division, Xiaohe Health, acknowledged the purchase but refused to disclose the deal’s value.
Some people in the IT business are taking notice of the deal. Tencent’s proposed merger of the country’s two most popular livestreaming platforms for gamers, for example, has been prevented by anti-competitive legislation in China in recent years.
ByteDance’s core business is a content factory that churns out sharp, engaging films, and Amcare’s expertise seems to be peripheral to that. As part of their diversification plan, both Chinese and American internet companies, when they have the resources and user base to tap, are not uncommonly seen dabbling in the healthcare arena. Tencent has experimented with establishing physical clinics. Online pharmacy are operated by Alibaba and JD.com.
It’s very unlikely that the short video firm would take over Amcare’s administration, but at the very least, it will integrate its healthcare portfolio with the newly acquired company, which operates private maternity facilities popular among China’s wealthy and elites.
A firm providing health information to the public was purchased by ByteDance in 2020, at least according to public records. Later, ByteDance’s health business was renamed Xiaohe Health, and it has a wide range of investments in the field, including one in medication research and another in the creation of DNA.
If ByteDance manages to create synergies between its entertainment and healthcare and biotech businesses, it will be interesting to observe. Baidu, the Chinese search engine, demonstrated the danger of bringing together the profit-driven advertising industry and the health care industry, which should place the welfare of its patients above all else. Outrage ensued in 2016 when it was revealed that a cancer patient had borrowed money to pay for an unsatisfactory therapy he discovered on Baidu’s website.
ByteDance excels in directing consumers from a well-known platform to a newer, less-known one. Even a few advertising films for its healthcare services might be included into Douyin’s 600 million daily active users. It’s a degree of power that should only be used sparingly and with due diligence.