"With an aging population and increasing public awareness on fitness and health, more people will rely on online and mobile platforms to enjoy medical services," Lin, of Analysys International, said. "The market will grow into an industry of 36.5 billion yuan in 2017."
But there are challenges ahead as the healthcare industry is controlled and funded by government organizations.
Indeed, prescription drugs can not be sold on Alibaba's e-commerce site Tmall, even though it already deals in over-the-counter medicines. "Only when the government greenlights more medical businesses to private players, will the online health market really boom," Qin Zexi, an analyst at research firm iResearch Consulting Group, said.
Still, Alibaba, Tencent and Baidu are making significant progress. Patients can now use online platforms, such as Alibaba's Alipay and Tencent's WeChat, to consult doctors, make appointments, pay bills and check medical reports. In the past few years, medical delivery service apps have also mushroomed.
In the near future, "telediagnosis" is another area the Internet big three will probably move into. This is a process whereby a disease diagnosis, or prognosis, is made by the electronic transmission of data between distant medical centers. Technology will play a key role in this.
"The Internet trio are spending heavily in the sector, but currently most of their services don't touch upon the key aspect of telediagnosis," Qin said. "As more public hospitals embrace online technology and Internet companies, telediagnosis will become a growing trend."
For now, Internet companies are carving out niche roles in the healthcare industry.
Baidu is concentrating on big data technology, a broad term for processing vast amounts of complex statistics, which can be boiled down into market trends. Around 26 million people search for medical information on its platform, according to the company.
In July, it rolled out a cloud computing project in partnership with the Beijing municipal government. This involves analyzing and storing health-related data from smart devices.
"Unlike Alibaba which has to tempt companies to its platforms before accumulating pharmacy business data, Baidu is a natural accumulator of records," Lin said,
As for Tencent, it has invested $70 million in dxy.cn, the largest online medical community in China, and provided funding for guahao.com, which makes appointments with doctors online. These portals are now on WeChat, which allows them to access the site's 600 million regular users each month.
"WeChat is an ideal platform to offer customized or personalized medical services because it can accurately profile users," Qin said.
Naturally, Alibaba has even bigger plans. It already sells over-the-counter medicines online and could now expand into health insurance.
"Alibaba is now heavily involved in the medical industry chain," Qin said. "Compared with Tencent and Baidu, it has greater internal resources in online medical care, which will give it an edge in developing more products."
Earlier this year, Alibaba Health Information Technology linked up China Pacific Insurance (Group) Co Ltd. "We don't rule out the possibility of rolling out Yu'ebao-like online health insurance product in the future," Zhang Lei, who is in charge of public relations for Alibaba Health, said, referring to Yu'ebao's popular online investment fund.
