Please provide an overview of the Health Supplement Market in China (categories incl. Protein, Amino-Acid, Energy-Drink, Joint-Supplement). Please share articles on market size, trends and key players / companies / providers.
Hello! Thank you for your question about the health supplement market in China. The short answer is that it was valued at $20bln in 2016 and it's forecast to grow at CAGR of 11% until 2021. Trending product categories include minerals and joint supplements, as well as plant- and animal-based dietary supplements. Below you will find a deep dive of my methodology and findings.
I analyzed various articles on the Chinese supplement market, focusing on those that cite credible reports. The one that gives an overview of Mintel's study provided me with basic information on market size, key players, and trends. I compared it with other reports and looked for articles that discuss trends or key players that were mentioned.
I used sources from the last two years, prioritizing the most recent ones. Also, I focused on articles that provide more than just numbers, as you mentioned you are interested in them. Additionally, this source includes videos from the Natural Products Expo West 2017, with insights about Chinese supplement market.
According to Mintel, the health supplement market in China was worth $20bln in 2016. It makes it the second biggest market after U.S., but with a forecast CAGR of 11% until 2021, China may even become the leader.
Also, experts from the U.S.-China Health Products Association (USCHPA) explain that the market may be larger than the current estimates, as it's not transparent and some channels aren't tracked.
Factors that contribute to the robust growth of the market include rising disposable income, a growing interest in healthy lifestyle, repeated health scares, an aging society, and the boom of e-commerce. Overall, China is also considered to be a prime market for supplements due to its long tradition of using products like herbs or tinctures to improve health.
As for trending categories, joint supplements doubled their sales in 2016. Also, the regular consumption of minerals increased from 36% to 40% between 2014 and 2016. A similar growth could be observed for dietary supplements, with 33%, of Mintel's survey respondents, saying they use them seven times a week, compared to 28% in 2014. Popular choices included both animal-based products, like cod liver oil, and plant-based ones, such as garlic oil and spirulina.
Experts think that the growth in those categories can be attributed to Chinese consumers being more informed and health conscious, while at the same time more likely to suffer from lifestyle diseases. Those factors make them look beyond vitamins.
Regardless of this, vitamins remain popular. They are among the top imported products, as shown by the statistics by the China Chamber of Commerce for Import & Export of Medicines & Health Products. Other popular categories include protein powder, fish oil, functional drinks, and formula nutritional drinks.
Amino-acids aren't mentioned in any of the sources, except for one, which shows that they are among most valuable imports and exports. However, I found an article according to which manufacturers shift their focus to high-grade amino-acids, as bulk ones that can be used in regular supplements aren't profitable enough. They are also considered untrustworthy due to major scandals in the past.
Various sources predict that combining health supplements with the principles of Traditional Chinese Medicine (TCM) may become a trend. While supplements have been more profitable than TCM products since 2010, in recent years, there was also a surge of interest in the latter. As companies will look for differentiators, it's likely they will turn to Chinese Medicine, which is an integral part of Chinese culture and may appeal to older consumers.
Also, the regulatory framework heavily influences the market. As a result of strict rules, penetrating direct sales channels, like pharmacies which account for 49% of the market, is difficult for new players. Foreign companies most commonly rely on e-commerce, which doesn't allow them to reach consumers from rural areas. One popular strategy to bypass it is partnering with local businesses. With such partnerships, international brands don't have to apply for licensing, while Chinese ones improve their image and product quality.
In 2014-2016, most companies marketed their products to seniors and millennial females, with claims related to bone, cardiovascular, and brain health. According to the statistics presented by Vision Avenue Consulting during Natural Products Expo West 2017, 80% of buyers at TMall, the leading e-commerce channel for supplements, are millennials. They seek niche, innovative products. Senior consumers are more likely to purchase supplements at the pharmacy and opt for traditional, herbal ones.
The market is highly fragmented, with each of the key players accounting for 4-6% of the market share, barely more than other companies.
One of the top players is Pfizer. The company leverages platforms like TMall and JD.com to gain consumer insights and quickly penetrate the market. While best-selling products are Caltrate and Centrum, Pfizer also develops supplements exclusively for e-commerce sites, to meet the demand for low prices. The company's web sales of supplements in China doubled in 2015.
Amway, another key player, relies heavily on direct channels, which results in dropping sales. Despite this, the company is optimistic about its future in the supplement market in China, the biggest revenue driver. Their core brand is Nutrilite™, which includes vitamins and dietary supplements. They plan to capitalize on the growing importance of TCM in the supplement market.
Dong-E-E-Jiao is a Chinese company that offers supplements, biological Chinese medicines, and gelatine products. According to investor analysis, it differentiates itself with the diversified product portfolio and tight control on operating costs.
Other important companies in the market include Herbalife, By-health, and Xiuzheng.
To wrap it up, the supplement market was worth $20bln in 2016, with a forecast CAGR of 11% until 2021. Trending product categories include joint supplements, plant- and animal-based dietary supplements, and minerals. The market is fragmented, but some of the key players are Pfizer, Amway, and Dong-E-E-Jiao. Thank you for using Wonder! Let us know if we can help with anything else.