Online Mutual Aid Once Had the Chance to Become as Ubiquitous as Online Payments

The online mutual aid industry has the potential to grow into a national-level, inclusive livelihood services business. It once had the chance, much as Alipay reshaped the online payment industry, to form a large-scale, foundational service ecosystem in social security and inclusive healthcare and to become a core supplementary form of China's multi-tiered medical protection system.

More than a decade ago, when I founded KangAi Commune, I set out a long-term vision for the industry's development. At the time, I laid out the blueprint to the capital markets: in the future, various forms of mutual aid such as critical-illness mutual aid would become a foundational vehicle of national livelihood services; the great majority of people would join at least one online mutual aid organization; and, drawing on the inclusive protection capacity of critical-illness mutual aid, it would form an effective link with basic social medical insurance to build a seamlessly connected, all-around national medical protection system and fill the gap in critical-illness protection for ordinary people.

But looking back over the industry's years of development, the overall trajectory has fallen short of expectations. The industry is now stuck in a deadlock, with no sign yet of breaking through the bottleneck and returning to healthy growth. The state of the industry is a cause for regret.

At its core, the key factor limiting the industry's development is a mismatch of timing. The Chinese have long prized the logic of success as 'heaven's timing, earthly advantage, and human harmony,' and the scaled, routine development of any industry depends on the combined support of the era's environment, market conditions, and industry factors. The online mutual aid industry's core development phase, however, never assembled these favorable conditions, and it missed the best window for growth.

Comparing with Alipay's rise makes the central value of timing all the more evident. When Alipay was born, China's third-party online payment industry was still a blank, the regulatory system was not yet complete, and the market was highly tolerant, leaving ample room for innovation and exploration. The industry's pioneers at the time dared to break the shackles of traditional payment models and to innovate boldly and try things first on a new track. It was thanks to this loose and tolerant environment that Alipay rose quickly, thoroughly reshaping China's online payment business, popularizing mobile payments for all, and becoming a benchmark calling card of modern China's digital livelihood services. By contrast, Xianghubao, launched later, was born into an entirely different era, market, and regulatory environment, and had long since missed the early internet track's generous dividends.

If the online mutual aid industry had been able to match Alipay's development window — taking root early amid the rapid growth of internet business models, in the early days of digitizing China's livelihood protection, when market regulation was not yet detailed and the environment was permissive — it would most likely have quickly accumulated a vast user base and grown into a routine supplementary medical protection covering hundreds of millions of citizens, replicating Alipay's national-level success in online payments and deepening the multi-tiered medical protection system.

But the opportunities of an era are unique and unrepeatable. History cannot be recreated, and the policy, market, and era dividends specific to the online mutual aid industry have already dissipated. Looking back on the industry's development and assessing its future direction, it is not hard to see that the golden window for its scaled development has closed for good.

From a commercial standpoint, the online mutual aid industry failed to achieve its expected goal of scaled development, and the industry's exploration can hardly be called a success. But from the macro perspective of people's welfare and the building of the social security system, this outcome has a positive side. In recent years, China's basic social security system has kept improving, with medical insurance coverage and protection steadily rising; the commercial insurance market has iterated rapidly, with inclusive commercial insurance, customized critical-illness policies, and other products growing ever richer; and at the same time, multi-tiered safety-net businesses such as Huimin Insurance and social assistance have spread quickly, with an all-around, three-dimensional livelihood protection system maturing by the day.

People's medical protection needs are now amply met through diverse channels, and online mutual aid's supplementary role has gradually weakened. So although the industry's commercial exploration failed to achieve its original vision, from the standpoint of improving livelihood protection and raising social welfare, it cannot be called a failure either. Looking ahead, as the social security system keeps improving and livelihood needs keep upgrading, the online mutual aid model still has the potential to iterate, upgrade, and re-adapt to the market, and it may yet find a new position and renew its vitality in a brand-new industry ecosystem.