HUAWEI Technologies has found an unlikely way to boost sales of its latest smartwatches in the face of sluggish consumer spending in China: by registering them as medical devices.
After the launch of Huawei’s new Watch D2 smartwatch in November, buyers discovered they can charge it to their medical insurance rather than paying for it themselves. Since then, the watch has proven so popular at Chinese pharmacies that some have required customers to pre-order, while others have seen stock quickly sold out, according to media reports and social media posts.
On the Xiaohongshu social media platform, users are sharing tips on how the watch’s blood pressure-tracking function allows it to be registered as a medical device and can therefore be paid for by the money deposited in each person’s individual account opened by the state medical insurance, either in full or in part, depending on the rules in different cities.
The hack means people are using their personal accounts almost like a cash coupon or discount code to get a pricey wearable gadget. It has helped give the smartwatch a much needed sales bump at a time when the government is looking to reinvigorate consumer spending as the country’s property crisis and trade tensions weigh on economic growth.
Meanwhile, the Apple watch is not registered as a medical device in China.
China’s medical insurance programme, which covers around 95 per cent of China’s 1.4 billion people, sends back a certain amount of money each month to residents’ individual accounts. The money can be used to pay for medication and medical devices such as glucometers, blood pressure monitors and thermometers purchased at hospitals or pharmacies before a patient reaches the annual deductible to start reimbursements.
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The money in the accounts cannot be withdrawn for other purposes. A healthy individual can accumulate quite a substantial amount if they do not use the money to pay hospital bills.
Sales limits
Priced at 2,988 yuan (S$555), the Huawei watch has an array of health functions, including monitors to measure the wearer’s blood pressure, sleep quality, heart rate and number of steps.
Due to its classification as a medical device, the watch is being sold in pharmacies across China. The smartwatch is so popular, that some pharmacies in Shanghai are limiting purchases through medical insurance to one per person, according to local reports. Many are also requiring buyers to activate the watch upon purchase to prevent reselling.
“The watches are currently not available,” a Shanghai pharmacy told Chinese media. “Buyers need an appointment. There are more than 500 people in the queue.”
Still, the smartwatch’s popularity at the pharmacy will have a limited impact on the Chinese tech giants overall revenue, of which wearable sales accounts for only a small amount.
To emphasise its medical function, Huawei officially calls the Watch D2 a “wrist blood pressure recorder”, but it is almost 10 times more expensive than a regular blood pressure monitor.
People have questioned on social media whether it’s right to classify multi-function, high-tech gadgets as medical devices just because they can measure blood pressure among many other functions. They also expressed concern more consumer tech companies could take advantage of medical labelling, further draining China’s medical resources.
Responding to the growing controversy, the health insurance bureau in the eastern coastal city of Ningbo has temporarily barred such purchases, citing the watch’s many additional functions. Officials say they are discussing the matter and will inform pharmacies of any further decisions. BLOOMBERG
