Shares of Alibaba Health Information Technology (ALBHF) got a boost on Wednesday after the medical arm of Alibaba Group (BABA) - Get Report posted revenue that was up over 700% year-over-year. 

For the year ended March 31, Ali Health revenue came in at $68.9 million, although the company's adjusted net loss increased about 8% over the past year to $30.1 million. The company said it had higher costs due to higher sales, marketing, administrative and product development costs.

Shares of the company dropped about 1% after the report came out before rebounding about 4%. Alibaba owns about 54% of Ali Health, according to FactSet.

Ali Health originally relied heavily on business from China's Food and Drug Administrations, which had hired the company to run an authentication system for medicine sold in China in 2014, the Financial Times reported. However, after receiving complaints that Ali Health was being given an unfair advantage over industry competitors, that project ended in January 2016.

Now the medical company relies on its e-commerce business for nearly 83% of its total revenue for the 2017 financial year. In August, Alibaba's online retail platform struck a deal with Ali Health that has provided a "steady and fast-growing source of revenue," Ali Health chief executive Wang Lei said in the earnings call, the South China Morning Post reported.

The business tried to expand its offerings in the past year, but to not much avail. The "immediate relief" platform it launched in June failed to add anything meaningful to its revenue, partly because fees for the platform were considerably higher than the original platform it replaced, according to the Financial Times. In addition, Ali Health Insurance, an Alibaba-controlled joint venture, also failed to contribute to the bottom line. The company said that was because "the newly acquired associates are either at the initial stage of business development, or under business transformation." 

Ali Health's earnings came out the day after insider sources revealed that e-commerce giant Amazon (AMZN) - Get Report is looking to hire someone to advise it on how to best take advantage of the multi-billion dollar pharmaceutical market, CNBC reported.  

Amazon reportedly holds an annual meeting to determine whether it's finally time to move into the sector. During this year's meeting, the company was particularly eager to break into the space due to the increase in high-deductible plans and because more people are paying for health care. In 2015, an estimated $300 billion was spend on prescription drugs in the U.S. alone. 

Tigress Financial Partners CIO Ivan Feinseth said it's natural for both Alibaba and Amazon to try to break into the pharmaceutical market because their specialties are distribution and fulfillment, which is exactly what pharmacies do on a daily basis. Both companies think they can make the industry more efficient. "Bezos is a problem solver and cost reducer and is always thinking of what else he can put on the platform," Feinseth explained. 

The results for Ali Health came out the day before Alibaba is set to release its 2016 fourth quarter results. The stock is already trading up about 40% year-to-date and is expected to get a further boost after it reports its earnings. The Chinese e-commerce giant is expected to report earnings of 66 cents per share on revenue of $5.21 billion, according to analysts surveyed by FactSet. "It's a tough call as to how the stock will react, but I think it will be positive," Feinseth said.