Beijing Shuts Down Taobao’s ‘Take a Number’ Service for Hospitals, But Consumers Cry Foul

Beijing Shuts Down Taobao’s ‘Take a Number’ Service for Hospitals, But Consumers Cry Foul

May 24, 2013 by C. Custer

Chinese hospitals are, to put it mildly, a bureaucratic nightmare. Just checking into one generally involves, among other processes, waiting in line to take a number and often also waiting in another line to pay for taking that number. Monster e-commerce siteTaobao was attempting to take some of the sting out of that with a new service launched earlier this week that allowed customers to book numbers and in some cases also pay online. But yesterday, after just three days open, the service was shut down in Beijing by the city’s health department on the grounds that healthcare is an issue of “public interest” and thus ‘take a number’ services should be non-profit. It also suggested that providing health information to a third party caused a potential information security risk.

That would be a compelling argument, except that many of China’s hospitals themselves aren’t even non-profit, and even in non-profit hospitals there is often a fair amount of under-the-table cash expected from patients if they want to receive good service. Perhaps healthcare in China should be non-profit, but since it very clearly isn’t, why target Taobao for making money off of the convenience of online ‘take a number’ services when for-profit hospitals are profiting daily off of their patients?One reason may be that the health office operates its own online reservation service and isn’t interested in competition. China’s Railway Ministry has responded similarly in the past, banning competitors and convenient hacks of its own online platform, so the Taobao ban really isn’t all that surprising.

What is surprising is that there has been a bit of pushback on the decision, even in the state-owned press. The People’s Daily, for example, carried a China Radio Network opinion piece titled: “The Health Department Has No Right to Speak for Consumers” that argues:

[The Health Department has suggested there’s an information security problem] But everyone who uses Taobao knows that if Taobao leaks your personal information, you can demand compensation. As to whether consumers’ interests are hard, only consumers themselves can know that, and they don’t need some government department to speak for them. When consumers are allowed to openly rate public services as good, fair, or poor [like they could on Taobao], that will be a step forward, not a risk.

The Beijing Health Department says that Taobao is violating consumers’ interests, but no matter how you look at it the department is having itself make the decision instead of consumers, and avoiding the truth that taking a number [at Chinese hospitals] is very difficult.

And the comments from the internet peanut gallery are almost unanimously on the same page. “Shutting down such a good service; Health Department are you thinking with your asses?” wondered one commenter on Sina Tech. “What a pity,” wrote another. Some commenters pointed to the recent ban on taxi apps in Shenzhen as another example of the government squashing convenience and private industry to keep a tight hold on the sectors it oversees. There are a lot of cynical comments about Taobao’s service being banned because it takes some of the money that would otherwise go to the Health Department.

But can public pushback actually lead to a reversal of the decision? It’s certainly unlikely, but it wouldn’t be unprecedented. We’ll be keeping an eye on this to see if Alibaba and the collective internet hive mind are capable of pushing Beijing’s Health Department back in the opposite direction. (But don’t hold your breath).

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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