By 2025, China's online mutual aid industry is expected to reach 450 million users or nearly 32% of the country’s population and three times the number of current users, according to the ‘Online Mutual Aid Industry White Paper’ published by the Research Institute of Ant Group.
The industry white paper, the first of its kind in China, surveyed over 58,000 users of online mutual aid on their perceptions of the industry. Nearly 80% of the respondents felt that online mutual aid platforms strengthened their sense of security. Over 53% also stated that they would consider enrolling their family members in online mutual aid programmes.
Users of online mutual aid programmes in China are primarily from low-income or middle-income households, according to the white paper. Among those surveyed, who took part in March this year by responding to an online questionnaire, 80% earn less than RMB 8,333 (USD 1,180) per month while 72% come from third or lower-tier cities and rural areas.
White paper predicts Chinese online mutual aid market to triple by 2025
“Online mutual aid platforms have become a complementary force in China’s comprehensive healthcare system, which is comprised of both essential public coverage for all citizens and commercial health insurance,” Zheng Bingwen, director of the World Social Security Center at the Chinese Academy of Social Sciences and one of the advisers to the white paper, said.
The reimbursement rate of China’s serious disease insurance scheme, part of the public healthcare system, is capped at 60%, leaving a portion that patients still need to pay themselves. According to the white paper, online mutual aid programmes serve as a complement by further reducing out-of-pocket expenses accrued in the treatment of critical illnesses, bringing it from 40% to below 20% for patients solely dependent on public healthcare coverage.
The white paper estimates that more than 150 million users had enrolled in various online mutual aid programmes in China as of the end of 2019, of which over 100 million use Xiang Hu Bao, the online mutual aid platform housed on Alipay.
Amid the COVID-19 outbreak, Xiang Hu Bao in February also introduced a temporary one-time protection scheme free of charge for all participants, offering a payout of up to $14,000 (RMB 100,000) if someone who takes part passes away from the infection. Payouts were entirely borne by Ant Group, and Xiang Hu Bao participants did not need to bear the cost.
“As awareness and concerns about healthcare needs grow in China, especially since the COVID-19 outbreak, public demand for more comprehensive and diversified healthcare coverage will continue to rise,” Ant Groups’ vice president Ming Yin said. “Online mutual aid platforms will have an increasingly important role to play in providing a basic health plan for people, who can then choose from a wide range of healthcare services and policies.”
“We are committed to serving more users across China and providing them with inclusive mutual aid programmes tailored to their specific needs,” Yin added.
While nearly 70% of online mutual aid participants surveyed in the white paper said they were not covered by commercial health insurance, over 42% said they intend to purchase such insurance products in the future.
This finding is in line with a survey conducted by FT Confidential Research in June 2019, which found that 33% of Xiang Hu Bao’s participants intended to buy a critical illness insurance product over the next six months, versus only 22% of those who do not use the platform.
Re-disseminated by The Asian Banker