Waterdrop operates a digital platform providing insurance distribution, medical crowdfunding, and healthcare services primarily to consumers and institutional partners in China. The company earns commission-based revenue from insurance carriers for health, life, accident, and specialty insurance policies sold through its online marketplace, while also offering technical services such as analytics and risk assessment to insurers. The platform also operates a medical crowdfunding service where patients can raise funds for medical treatments through online campaigns, generating management and platform fees, and recently expanded into clinical trial patient recruitment services. The business depends on partnerships with insurance carriers, pharmaceutical companies, and third-party distribution channels, while navigating complex and evolving regulatory frameworks governing insurance distribution, crowdfunding operations, and data privacy in China.