The next BAT will not be a medical service

Release date: 2016-05-17

Under the new economic normal, most industries are not only unable to achieve rapid growth, and many even face tightening. However, the medical industry still maintains rapid growth. According to the current growth rate, the market size will basically double every five years. This has also attracted a lot of attention from outside the industry. In the past two years, a large amount of capital and talents have poured into this industry, but medical care is a highly regulated industry, and it is not an area where capital can be successful. Therefore, although the market expects the next BAT in the medical industry to have a fast-replicating business model and a giant that dominates the country; but the market may soon be disappointed, not only will the next BAT not exist in the medical industry, I am afraid Most of the capital will be lost in this area. The regional, supply shortage and heavy asset characteristics of the medical sector are doomed to be the next industry to explode, and there will be no national giants in the short to medium term.
Whether it is search, e-commerce or social, the characteristics of the Internet is that light assets can be quickly and nationally replicated, and the core moat can be built in a short period of time to create a winner-take-all situation, and ultimately obtain a monopoly profit. From the perspective of winners, the Internet itself has a certain positive feedback mechanism, which creates an effect similar to the secondary market reflex in the field of Internet investment, thus quickly relying on the concentration of capital to form a monopolistic market effect. .

But the medical industry does not have such a feature.

First of all, there is no uncertainty in the development of the medical industry, and it is impossible to achieve a winner. Whether online or offline, medical services are subject to the one-on-one characteristics of services. It is difficult to expand in a short period of time and can only move forward slowly. The so-called mass market imagination is not applicable here. Moreover, even if the characteristics of localized management of medical care are abandoned, the needs of various regional medical markets are different, and it is difficult to replicate with the same set of standards. The demand for medical services is influenced by local policies, economic conditions, disease spectrum and consumption habits, and it is impossible to open the market with simple models. Further, once medical services gain market reputation in one area, it is difficult for new entrants to compete. This is mainly because the medical service field is very sticky, and regional market segmentation is one of the main features of the medical field. This is doomed to the decentralization and regional nature of the medical market. A large number of small and medium-sized service providers will exist in this field. They can compete with large companies because of their unique business, which is very different from the Internet.

Second, the shortage of supplies in China's medical sector will constrain the development of the medical industry for a long time. The shortage of supply is not unique to China. Even in the highly marketized United States, the shortage of doctors is an important factor that plagues its development. By 2025, the gap between American general practitioners is more than 30,000, and the gap between specialists is more than 60,000. The gap between Chinese doctors is even greater. Under the huge supply shortage, the development of the medical industry is very difficult even if it wants to speed up. Moreover, China's medical supply structure is quite distorted. The ability of a large number of grassroots doctors is weak, and it is difficult to gain the trust of users. The number of doctors in the top three hospitals is limited, further increasing the shortage of supply.

Such a shortage of supply is not able to achieve rapid increase in the short term, because doctors are high-ranking occupations and industries that require long-term experience. They are not cultivated in batches in one or two years and require long-term accumulation. This will become the most important factor restricting the development of the overall medical industry. Therefore, even the use of technical means to connect the various entities of the entire market does not help the slow development of the market, and can not drive any company's explosive growth.

Third, the heavy asset characteristics of the medical industry constrain its rapid development. The medical industry has always been characterized by heavy assets. Any medical service requires a large amount of human and material resources and capital investment to obtain output slowly. Therefore, in any country, the public welfare of the medical industry is the first. Whether it is public or private, non-profit is the main way of existence of medical service institutions. For-profit institutions are always only complementary to the industry. Therefore, the overall investment in medical services requires long-term strategic capital rather than companies with strong exit deadlines. The heavy assets of medical care determine that it needs to endure long-term losses. Even after turning losses, it will face a low profit rate, mainly relying on scale to maintain operations. For example, the well-known American for-profit chain hospital HCA has a net profit of 3-5%. Therefore, in an industry with heavy assets and low profits, it is difficult to make an analogy with the Internet industry that obtains excessive monopoly profits.

Finally, the B-end characteristics of the medical industry constrain its speed of development. Unlike the Internet or other industries that target primarily individual users, the healthcare industry is a highly B-side controlled industry. In the field of payment, users do not rely on their own expenses, but are paid by third-party insurance institutions. The introduction of insurance institutions guarantees the rights of users and restricts the development of medical institutions. The revenue of medical institutions ultimately depends on the insurance payment rules, rather than the simple trading. Therefore, the B-end rather than the C-end is the dominant player in the medical field, which determines that the traditional direct marketing methods and profit-making methods cannot be effective, which limits the overall development of the industry.

Of course, there are still opportunities for a major outbreak in the service sector, such as the expansion of commercial insurance policies or the outbreak of retail outlets caused by outpatient pharmacies directly removed from hospitals. But these are highly subject to policy, unable to accurately predict and require long-term waiting, and do not help the current decision-making and development.

In general, the medical field is not an industry with great imagination. The multiples of future growth are actually limited. Not only can it not become the main growth hotspot of the next industry in the short term, even in the medium term, its own development is very challenging. Only industrial capital with strong determination and ability is suitable for layout in this field.

Source: Village Diary

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