The Chinese healthcare platform enjoys a thriving online pharmacy business and is investing heavily in AI tools, but powerful rivals are entering the same arena

Key Takeaways:

• Competitors such as Alibaba Health are piling into AI-assisted healthcare, while Meituan has muscled into the market for on-demand drug deliveries
• JD Health's latest annual results show earnings are on the rise, but online pharmacy sales accounted for nearly 83% of revenue

Welcome to the age of diagnostic chatbots and digital doctors. China's online healthcare sector has bounced back after a post-pandemic slowdown and is now rapidly rolling out AI tools to upgrade the business.

One of the biggest names in Chinese digital healthcare, JD Health International Inc. (6618.HK), ramped up online pharmacy sales last year and has been an early adopter of applied artificial intelligence, launching a suite of AI assistants. Judging from the latest annual results, the corporate vital signs are strong for now, although the firm faces growing pressure from powerful rivals.

In early March, JD Health reported robust earnings growth for 2025, lifting its net profit margin to 8.9%, the highest level since the business was founded.

Revenue rose 23% to 73.4 billion yuan ($10 billion) in 2025 from the prior year, marking the fourth straight quarter of expansion above 20%. On a non-IFRS basis, net profit climbed 36% to 6.5 billion yuan, while active platform users reached 218 million by the end of last year.

By far the biggest revenue chunk came from online sales of pharmaceuticals and health products, which jumped nearly 25% to 60.9 billion yuan, accounting for almost 83% of total turnover. A rise in active platform users and increased sales to existing customers drove the growth, as well as a wider range of medicines and healthcare products on offer.

The traffic attracted a growing number of advertisers to the platform, helping to boost services revenue by 34% to 2.56 billion yuan.

To fend off fierce e-commerce competition, JD Health has been forging closer strategic ties with drugmakers to become the go-to platform for new product launches. More than 100 new drugs made their online debut on JD Health in 2025, a sharp jump from just over 30 in 2024, including an insomnia treatment from pharmaceuticals firm Eisai China and domestically developed anti-flu medicines.

These drug launches generate useful incremental income while boosting the company's brand image and user loyalty.

However, JD Health faces strong competition in the fast-growing business of on-demand pharmaceuticals, especially from delivery giant Meituan (3690.HK).  Leveraging its huge local traffic and fast delivery network, Meituan's service has captured more than 70% of the market.

For customers with urgent requests, the promise of getting their pills within 30 minutes can be more compelling than the appeal of using an established platform. In response, JD Health has been strengthening its offline infrastructure. By the end of 2025, the company had opened more than 300 self-operated pharmacies, integrating online and offline inventory through its JD Pharmacy Express Delivery service.

The company has also stepped up spending to compete for users. Selling and marketing expenses rose faster than product sales in 2025, increasing 26% to 3.8 billion yuan.

AI brings new rivals

An AI-driven transformation is also gathering pace in China's online healthcare sector, as companies move beyond the basic model of pharmaceutical e-commerce to build intelligent, comprehensive healthcare platforms.

Last year JD Health launched its "AI Jingyi" system for health consumers with more than 10 types of intelligent agents including AI doctors, AI pharmacists and AI nutritionists, incorporating clinical data from specialists at more than 1,000 leading hospitals. The company's AI agent "Dr. Da Wei" draws on clinical guidelines and databases of medical literature to provide round-the-clock health consultations. The company said the digital doctor had completed hundreds of millions of interactions by the end of last year, with a high user satisfaction rate.

Meanwhile, JD Health has deployed its "Joy Doc" AI solution to institutions including a hospital affiliated with Wenzhou Medical University, serving more than five million patients. In early 2026, the company further launched an evidence-based AI medical tool called "Zhiyi" designed for use by physicians. The tool integrates reams of authoritative medical papers from around the world to support clinical decision-making and analysis of medical research.

As AI penetrates more deeply into various industries, the healthcare sector is seeing a new wave of tech-savvy entrants. The fintech Ant Group has leveraged its widely used payment ecosystem to launch a healthcare app, "Ant Afu", with an AI chatbot that answers health queries and connects users to medical providers.

Internet healthcare company Medlinker offers a "Future Doctor" platform with AI support and links to medical professionals. All these moves signal that telehealth competition is shifting from simple doctor-patient connections toward broader ecosystems offering a range of AI-enhanced services.

As for valuations, JD Health currently trades at a price-to-earnings ratio of about 26.5 times, while another industry giant, Alibaba Health (0241.HK), commands a much higher multiple of around 39.5 times. The gap suggests investors see stronger growth potential for the Alibaba unit as AI healthcare takes off.

Over the longer term, investors will be watching to see whether JD Health can keep benefiting from its supply-chain advantages and multi-channel strategy as the rivalry in AI-assisted healthcare heats up.

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Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.