China’s Telemedicine Market: Where the Opportunities Are

China has more online healthcare users than the United States has people. The number stopped growing three years ago. Both facts matter if you sell anything health related and you are looking at this market.

Telemedicine in China is no longer a growth story. It is a consolidation story. Hundreds of internet hospitals have shut down. The platforms that survived make almost all their money selling boxes of medicine, not selling consultations. That changes what a foreign company can realistically do here, and it kills most of the ideas people arrive with.

I am Olivier Verot, founder of Gentlemen Marketing Agency. I have been based in Shanghai since 2012 and my team has taken medical device makers, supplement brands and pharma companies through NMPA registration, JD Health and Tmall Health listings, and hospital channel work in China.

A note before we start. Healthcare in China is a regulated sector. Everything below describes rules as published. Nothing here is medical advice, and nothing here is a way around a licence, a registration or a prescription requirement. If a route requires a licence, you need the licence.

The 2026 Numbers, And What They Say

Start with the user base. CNNIC’s 57th national internet report, published in early 2026 with data to December 2025, counts 411 million online healthcare users out of 1.125 billion Chinese internet users. That is 36% of everyone online. It is also flat: the same survey counted 414 million at the end of 2023 and 418 million at the end of 2024. Three years, no growth. You can read the report on the CNNIC site.

Now the supply side. The National Health Commission counted 3,756 internet hospitals in September 2025, handling 130 million online consultations across 2024. By May 2026, 21st Century Business Herald counted 3,294 licensed platforms of which only 2,354 were still operating. More than 900 had closed or had their licence revoked.

The price of a licence tells the same story. An internet hospital licence used to resell for around 10 million RMB. It fell to 2 million, then 500,000, then roughly 380,000 RMB. Xinhua ran a piece in May 2026 on the same problem from the hospital side: platforms built and then left idle, doctors taking more than a day to answer a message, drug deliveries running three to five days.

So the market has capacity it cannot fill. That is bad news for anyone hoping to launch another platform. It is good news for anyone selling the parts that make an existing platform work better.

How China Got Here

Telemedicine in China started in the mid 1980s, built on store and forward techniques because the telecom infrastructure for real time work did not exist. It stayed marginal for thirty years.

The turning point was 2015, when the government legalised online healthcare providers. Digital health platforms could now operate entirely online, and the funding taps opened. Ping An Good Doctor, Chunyu Yisheng and Haodf.com all scaled off the back of that decision.

COVID did the rest. Lockdowns pushed patients who had never trusted an online consultation to try one, and the National Health Commission promoted internet based medical services to keep people out of hospital corridors. Attitudes changed permanently in about eighteen months.

What did not change is who pays. That is the part most foreign entrants get wrong, so it deserves its own section.

The Platforms That Matter, And Their Real Business Model

Four names come up in every conversation: JD Health, Ali Health, Ping An Health (formerly Ping An Good Doctor) and WeDoctor. They are not four versions of the same thing. Three of them are pharmacies with a doctor attached.

JD Health reported 73.4 billion RMB of revenue for 2025, up 26.3%, with 218 million annual active users and non-IFRS net profit of 6.5 billion RMB, in results released on 5 March 2026. Ali Health reported 30.6 billion RMB for its financial year to March 2025, of which 26.1 billion came from its own drug retail operation. For both, more than 80% of revenue is product sales. Consultations are a funnel, not a product.

Read the last row again. The commercial platforms are pharmacies. The hospital-run internet hospitals are where clinical volume sits, and they buy hardware and software. Those are two completely different sales motions and they need two different teams.

Insurance Reimbursement: The Real Volume Trigger, And Its Limits

Nothing moves in Chinese healthcare until 医保, the basic medical insurance fund, pays for it. Patients are price sensitive on medical spend, and an out-of-pocket consultation competes with a hospital visit costing a few yuan.

Reimbursement of online consultations is real, and narrower than the headlines suggest. Every province has issued pricing rules for “internet plus” medical services. They cover follow-up consultations only, for common and chronic conditions, at a licensed internet hospital. First consultations are not reimbursable and, under national rules, are not allowed online at all. The doctor needs an existing diagnosis to work from.

The amounts are small. In Beijing, an online follow-up at a tier-three hospital is priced at 50 RMB with 40 covered. Tier-two is 30 RMB with 28 covered. Shanghai has more than a thousand pharmacies inside its online insurance payment scheme, which processed just over 2 million settlements.

The honest read, five years in, is that insurance shifted existing spending online rather than creating new spending. It made online consultation normal. It did not make it profitable. Any business plan assuming reimbursement will fund your margin is wrong.

Two 2026 changes are worth tracking. Long prescriptions for stable chronic patients now run up to three months, which cuts repeat visits and pushes volume to pharmacies. And 114 new drugs entered the national reimbursement list on 1 January 2026.

Electronic Prescriptions And Selling Medicine Online

This is the part of the system that actually grew, and it is where the money is.

China now runs a national medical insurance electronic prescription centre covering all 31 provinces. By April 2025 it had connected 70,600 designated medical institutions and 271,400 designated retail pharmacies. A patient authenticates with an insurance code, ID card or social security card, authorises a pharmacy to receive the prescription, and settles with insurance in the pharmacy or online.

Since 1 January 2025, every pharmacy selling “dual channel” drugs has to route prescriptions through that central system. Paper is being phased out. Several provinces are extending the same pipe to ordinary chronic and common-condition drugs.

The effect is prescription outflow: volume that used to be captive inside hospital pharmacies moving to retail and to online pharmacies. That is the mechanism behind JD Health’s growth, and it is why the way medicine is sold online in China matters more to a foreign supplier than the consultation layer does.

The rules tightened in the same direction. The Compliance Guide for Online Retail of Prescription Drugs, published on 25 May 2026 and reported by Securities Times, requires real-name purchase, a licensed pharmacist doing prescription review, minor protection measures, and a ban on marketing that pushes consumers toward drugs unrelated to their treatment. Short video promotion, livestream promotion and private domain selling of prescription drugs are explicitly named. If you sell an OTC or a device, read that document before you write a single line of ad copy.

What AI Actually Does Here

Every Chinese health platform now markets AI. The legal ceiling on what it may do is low and specific.

The 2022 internet diagnosis supervision rules state that a prescription must be written by the treating physician in person, and prohibit using artificial intelligence to generate prescriptions automatically. The May 2026 online retail guide added the other end: prescription review must be done by a licensed pharmacist and may not be delegated to other staff or to AI. National guidance issued in 2026 on AI agents repeats the principle that AI in medicine is an assisting tool and that diagnosis and treatment decisions stay with a licensed doctor.

So what does it really do? Pre-consultation intake, collecting age, symptoms and history before the doctor picks up. Triage and routing. Imaging support in radiology and pathology, where Chinese hospitals have deployed at scale. Follow-up reminders and chronic care nudges. WeDoctor built most of its revenue growth on AI-assisted services sold to regional health systems rather than to patients.

For a foreign vendor this is the clearest opening in the whole sector, and we cover it in more depth in our piece on AI in healthcare in China. Selling an assisting tool to a hospital is legal, fundable and needed. Selling an autonomous diagnostic is not going to happen.

Where Foreign Companies Actually Fit

Here is the uncomfortable part. Almost nobody from outside China is going to run a consumer telemedicine platform here. The licence is hard, the economics are bad, 900 local operators already failed, and the category is held by companies with a logistics network you cannot replicate.

What does work falls into four buckets.

Devices. Remote monitoring hardware, home diagnostics, connected hospital equipment. A physical product with an NMPA registration path, a distributor, and a buyer with a budget. Slow, and it works. Budget 12 to 24 months for a Class II registration and do not market before you have it.

Software and components. Imaging algorithms, scheduling and follow-up systems, integration middleware, secure data layers. Hospital internet hospitals are buying, and their pain points are in the Xinhua piece above: slow doctor response, bad interfaces for elderly patients, poor coordination between departments.

Products sold through the health platforms. Supplements, OTC lines, personal care, medical consumables. Here you are an e-commerce seller on JD Health or Tmall Health, not a healthcare company. Cross-border listing lets you test before full registration. Our guide on the pharmacy and healthcare market in China covers the registration routes.

Partnership and licensing. Licensing a protocol, a training programme or a technology to a Chinese operator. Lower revenue, far lower capital, and it puts a local entity between you and the regulator.

Three rules whichever bucket you pick. Register before you promote, because health advertising rules are enforced and platform review rejects unregistered claims. Work with a licensed local partner rather than around one. Keep your data local, since health data falls under China’s data rules and cross-border transfer needs a legal basis.

Getting Found: The Marketing Layer

Discovery for health products in China has moved. Baidu still matters for B2B and hospital procurement research. Two newer channels deserve your attention.

Xiaohongshu is where Chinese consumers research anything they will put in or on their body. Search behaviour there works like a search engine, not a feed. Structured content answering one specific question ranks and keeps ranking. For an OTC or supplement brand, that is your top of funnel.

Generative engine optimisation is the second. Chinese users increasingly ask DeepSeek or Doubao before they search. Those models pull from indexed Chinese-language sources: Baidu Baike, Zhihu, industry media, your own Chinese site. If nothing about your brand exists in Chinese on a source they trust, you are absent from the answer. The fix is unglamorous. Publish accurate Chinese content, get cited by Chinese industry media, keep your Baidu Baike entry factual. For a regulated product, factual is also the only legally safe option.

WeChat private domain handles retention after the first purchase. Two sentences, because we have covered it many times: a service account plus a mini program lets you take repeat orders and push follow-up content without paying for traffic twice. Detail sits in our guide to marketing a medical, pharmacy or healthcare brand in China.

Case Study: A Portuguese Device Maker Finds The Right Door

Joao runs a Portuguese company making connected blood pressure and ECG monitoring devices. Around 60 people, solid business across Iberia and Latin America, no China presence.

He arrived with a plan for a subscription app: device plus remote monitoring, sold direct to consumers. Eighteen months and roughly 400,000 euros later, he had 2,100 paying users and churn above 70% at three months. The app had no internet hospital licence, so it could not offer consultations. Without consultations, users saw a bare data logger and stopped paying.

We changed the buyer, not the product. The hardware was CE marked and clinically solid. The app went on ice and we ran two tracks in parallel.

Track one: NMPA Class II registration through a Chinese legal agent, then a distributor agreement with a group selling into tier-two city hospitals that were building out chronic disease follow-up programmes. Those hospitals had an internet hospital licence, reimbursed follow-up consultations, and no good way to collect readings between visits. Joao’s device filled a gap the hospital already had budget for.

Track two: a consumer version of the same device, listed on JD Health as an OTC health device once registration cleared, supported by Xiaohongshu content aimed at adult children buying for elderly parents. No health claims, just clear explanations of what the readings mean and how the device works.

It took 22 months from restart to steady revenue. Registration took 14 of those months. By month 30 the hospital channel was doing around 1.9 million euros a year across four provinces, and JD Health was adding roughly 480,000 euros with a much better margin. The subscription app never came back.

Why it worked: he stopped competing with JD and Alibaba and started supplying the people who buy hardware. The lesson generalises. In Chinese digital health, foreign companies win in the supply chain, not on the front end.

Where Telemedicine In China Goes Next

Consolidation continues. The number of operating internet hospitals keeps falling while volume concentrates in hospital-run platforms and the two e-commerce giants. Licence value keeps dropping.

Chronic disease and elderly care is where the demand sits. Remote monitoring and self-management tools give long-term patients regular support without repeated travel, and elderly patients with mobility limits avoid the trip entirely. That is the largest structural driver in the sector.

Rural coverage expands through public infrastructure, not private platforms. Remote medical services reach every city and county, and around 70% of township health centres are connected to a higher-level hospital. The First Affiliated Hospital of Zhengzhou University runs one of the largest of these networks, serving a province of more than 100 million people. That is a procurement channel, not a consumer market.

Frequently Asked Questions

Can a foreign company get an internet hospital licence in China?

In practice, no, not directly. An internet hospital licence in China is attached either to a physical medical institution or to a licensed local entity, and the approving authority is provincial. Foreign investment in medical institutions is restricted and usually requires a joint venture with a Chinese partner holding control. Almost every foreign player that operates here does so as a supplier to a licensed Chinese operator, or through a licensing agreement, rather than by holding the licence itself.

Are online consultations really covered by Chinese medical insurance?

Partly. All 31 provinces have issued pricing rules for internet-based medical services, and follow-up consultations for common and chronic conditions at a licensed internet hospital are reimbursable. First consultations are not, and are not permitted online under national rules. Amounts are modest: a Beijing tier-three online follow-up is priced at 50 RMB with 40 covered. Reimbursement made online consultation normal. It did not make it a profit centre.

Can AI diagnose patients or issue prescriptions in China?

No. The 2022 internet diagnosis supervision rules require the treating physician to write prescriptions personally and prohibit AI generating them automatically. The May 2026 online retail compliance guide requires a licensed pharmacist to do prescription review and bars AI from that step. AI is allowed as an assisting tool: intake, triage, imaging support, follow-up reminders. That is where the commercial opportunity for foreign vendors sits.

How long does it take to sell a medical device in China?

Plan on 12 to 24 months before first revenue for a Class II device, most of it consumed by NMPA registration through a Chinese legal agent. Class III takes longer. You cannot market or list a regulated device before registration clears, so use that period for distributor selection, Chinese-language content, and hospital relationship building. Companies that try to sell first and register later lose the listing and sometimes the trademark.

Working With A Local Partner In China

Gentlemen Marketing Agency is a Shanghai-based agency. We have worked on China market entry for medical device makers, supplement brands and healthcare suppliers since 2012, alongside our wider work on pharma and healthcare opportunities in China.

On health projects we handle the marketing side: Chinese-language content built to survive advertising review, Baidu and Xiaohongshu visibility, JD Health and Tmall Health store setup and operation, distributor and hospital lead generation, and WeChat private domain. We work with your regulatory agent, we do not replace one.

If you have a health product and no clear answer on who in China would buy it, that is the conversation to have first. Contact us for a free consultation and we will tell you honestly whether there is a route.