JD Health to See Slower Growth in 2024 but Narrow Moat Still Intact

We expect narrow-moat JD Health to maintain a market leading position for healthcare e-commerce in the near and medium term. It holds about 40% market share, similar to its main rival AliHealth, which makes this niche industry dominated by mostly two competitors. Its business model is similar to AliHealth except with one key difference in that it has greater coverage and better next-day or same-day delivery efficiency than its rival. It has cold-chain capabilities for 300 cities and can meet next-day deadlines for 80% of its orders. We believe this key differentiation will allow it to maintain a leading market share due to the importance of timeliness and quality of goods when it comes to receiving pharmaceutical products.