The rising health awareness and increasing disposable income among Chinese consumers are two key factors in the record growth registered in the China Nutrition and Supplements market, which is expected to reach US$ 40 billion by 2023 growing at a CAGR of 14%.
According to a report issued by the consulting firm Roland Berger, China may soon overtake the United States as the most significant nutritional supplement market in the world.
With an approximate population of 1.4 billion people, China holds the title of the second largest world economy, behind the US. Health and wellness are an emerging market in the country; a segment that has only recently experienced significant growth. The bulk of wellness expenditure in the Asia-Pacific area, according to a survey by the Asian Development Bank, is on the Chinese wellness sector.
Chinese people associate dietary supplements with a healthy lifestyle. For this reason, Chinese consumers who are concerned about their health often opt for health supplements like vitamins and fish oil.
China is facing many problems, such as an aging society, social stress, environmental problems -air and water pollution- and the end of the Zero-COVID policy. To prevent and shield themselves from the consequences of these problems, Chinese people of all generations turn to health supplements.
China is one of the biggest vitamin and health supplements markets in the world and the most important fact is that it is just getting started, so it’s one of the sectors with the largest potential for domestic and foreign brands.
Consumers in China tend to trust traditional Chinese medicines and prefer natural dietary supplements. However, they are becoming more interested in Western health supplements and are educating themselves on the subject. There are many different products available on the market, including Chinese traditional medicine, vitamins, minerals, herbal products, and functional foods.
Since the COVID-19 pandemic, and especially in the post-pandemic era, the country has experienced an increased health awareness, which fueled the consumption of healthcare consumer products such as vitamins and food supplements, with a preference in imported ones.
Seniors are the demographic known to be most at risk of developing serious health complications from COVID-19. This is creating an opportunity in supplements that address the health needs of the elderly, including ensuring that micronutrient needs are met for optimal health and immune support.
Weight loss supplements are overtaking immunity-focused supplements in China. New vitamin and supplement products with slimming claims rose from 3.9% in 2020 to 10.3% in 2021, while immune system claims dropped from 9.2% to 2.2%. This shift was pushed by a higher incidence of obesity among Chinese people, especially after several long periods of COVID lockdowns.
A 2021 change in China’s supplement regulations led to a rapid growth in alternative supplement formats. While tablets remain the top format, alternative forms have replaced capsules and powders, formerly the second and third most common in new product launches.
Chews and gummies jumped from 2.6% of 2020’s supplements to 17.6% in 2021. The “other” category, which includes cake, seed, jelly, and candy formats, rose from 2.6% to 12.5%. More enjoyable formats like these can help fight pill fatigue and increase compliance.
One of the most important trends reshaping China’s supplement market is e-commerce. The three major companies that gained market share between 2019 and 2020—By-Health, H&H and Dong-E-E-Jiao—all had in common an expansion in e-commerce that allowed consumers to conveniently purchase their products even during lockdowns.
E-commerce is expected to influence long-term changes in supplement purchasing habits. In 2019, online sales for dietary supplements accounted for 28.1%, while in 2023 the numbers went up to 61.8%, and will stay on this level.
According to NutraIngredient- Asia, food supplements also have a record high in sales in terms of GMV (Gross Merchandise Volume) among all imported goods on Tmall.
Although this year’s 11/11 shopping festival wasn’t as exciting as previous ones and experts say that Tmall’s Singles Day has reached its peak in terms of sales, health supplements were performing very well. In November 2022, the total health supplements products sales grew to 4.78 billion RMB from 4.52 billion RMB in 2021, while the average transaction price rose to 340 RMB from 308 RMB.
The most popular categories were cosmetics and nutrition supplements, with almost 18% of sales. As young Chinese customers want to look good and improve their skin, they prefer beauty supplements and not traditional Chinese medicine like older people.
In order to maintain a healthy lifestyle, younger generations of Chinese consumers train, eat healthily, and invest in good cosmetics, vitamin and health supplements that they find on social media and e-commerce platforms.
As the incomes of the Chinese middle class are rising, people can afford to take care of themselves better than they did before, investing in sports, looks, and health products.
Several prolonged COVID-lockdowns in major Chinese cities motivated many people to start taking better care of themselves, engaging in sports, and eating better. Faced with a growing elderly population, the Chinese government is also promoting a healthier lifestyle.
According to a survey done by Statista in 2020, most of the people (77%) that consume dietary supplements do it to strengthen and improve their immune systems. This is especially important nowadays, in the post pandemic era, as many people may get sick with COVID or other viral diseases, such as flu. This situation contributes to a big growth in overall vitamins.
Another significant reason for ingesting health supplements is the need to cope with stress and to improve sleep. Many young people in China stay at work late, 6 days a week, and they are notoriously stressed, which causes many problems besides insomnia. This is true for young generations all over the world, and Chinese Millennials and Gen Z are no different.
Integrated nutrition, melatonin, and anti-fatigue products that reduce stress, boost energy, and improve sleep quality are the products that these customers are most interested in.
Improving skin, hair, and nails is also another purpose for taking food supplements, as per 28% of respondents. In 2023, experts estimate that this number will keep growing as people in China continue to invest in beauty and nutrition products.
Beauty enthusiasts are paying more attention to the "beauty from within concept,” which is increasing in demand. Nearly 70% of beauty enthusiasts are female, and they focus on issues such as weight control, skincare, and preventing hair loss. The Chinese Women Consumption Report 2022 released by JD.com in March 2023 shows that purchases by female users of astaxanthin and collagen, which emphasize skincare and antioxidants, grew by 63% and 49% YoY in 2022, respectively.
Though most elderly consumers prefer Chinese traditional medicine, there is a significant group of seniors that purchases Western produced supplements. Many do this in addition to their traditional choices in order to stay healthy and strengthen their immune system.
Because of the physical and psychological effects of COVID-19, older Chinese consumers are more concerned about their health than ever before. Older customers are interested in health and dietary supplements, including vitamins, calcium, iron, and zinc.
Meanwhile, nutrients such as coenzyme Q10, which plays an antioxidant role in the cardiovascular system and protects the health of the cardiovascular tube, are widely favored and in-demand for "precise nutrition" among the middle-aged and elderly.
Young Chinese parents who grew up with an affluent background are well-educated. The new generation of parents sees the importance of improving their baby's immunity to prevent disease as a reason to buy health care nutrition products. During each special period, from gestation to baby care to building their own "protective wall," Chinese parents buy targeted nutritional supplements to care for their babies’ health and growth.
Conscious young parents are inclined to do in-depth research before making a purchase. Product research related to product safety, efficacy, formula/ingredient, brand reputation, and product reviews are the top five factors they are concerned about. They are more likely to trust professional advice and authentic feedback.
Infant probiotics brand Aunulife, launched in 2021 by Tmall’s number-one bestseller of children’s probiotics, Kabrita, has worked with Daddy Lab to get the product tested and certified.
Daddy Lab is a Chinese company dedicated to ensuring children’s safety and has run experiments for various consumer products since its establishment in 2015.
In Daddy Lab’s explanatory video for Aunulife, founder Wei Wenfeng demonstrated the implications for infants’ replenishing probiotics, product ingredients, and formulas, and making such information intelligible to parents.Sports fans, mainly aged 30 and below, are also adding supplements to their routines. They consider exercise to be an important part of their daily lives, and they want to maintain a good figure and emotional state of mind by selecting the appropriate form of exercise, such as yoga, bodybuilding, jogging, or ball games.
Along with regular exercise, consumers are frequently concerned about their intake of dietary supplements to enhance their fitness results and achieve more significant exercise effects. Their main demands are for protein supplements, followed by certain electrolytes, vitamins, calcium, salt, and other specific supplements.
Along with the pet ownership boom in major cities, and the upgrade of consumer spending power, pet owners are willing to invest in their furry family member. Cat owners prefer vitamin supplements and intestinal health for their pets, while dog owners prefer bone and joint health and oral health. Adding a supplement has become the new refined feeding trend, and it is driving growth in the online pet health and nutrition market.
Although the market is still not mature and there are interesting opportunities for foreign brands in the health supplement market segment, there are several aspects to consider and learn before entering the segment.
The nutritional supplement market is classified by type of ingredients and by type of end-users. By type of ingredients, it is further sub-classified into vitamins, protein, amino acid, enzyme, and botanical supplements. By type of end-users, it is classified into infants and adults. Vitamin supplements grab the highest market revenue among nutritional ingredients due to increasing interest in prenatal and infants' supplements.
Currently, there are three main sales channels in China’s healthcare consumer market: Direct sales; E-commerce, and pharmacies.
Due to the relatively new history of the healthcare product industry, consumers have limited brand awareness, and the choice of channels for healthcare companies has become the core of corporate competition.
The best way for foreign brands to promote and sell health supplements to Chinese consumers is online. E-commerce can help brands reach more targets and increase brand awareness.
E-commerce is extremely well-developed in China, with Alibaba’s Taobao and Tmall dominating the market and changing consumers’ shopping behaviors. 35.3% of China’s retail sales occurs online, while the country represents more than 50% of the world’s e-commerce.
Selling online via e-commerce platforms or cross-border channels like Tmall Global can help brands expand their consumer base. In addition, for overseas brands with no presence in China, selling through cross-border e-commerce can not only save time and money but it can also allow them to test the market before deciding to move forward.
There are other platforms, besides Tmall and its biggest competitor, JD.com. It is important to understand that those platforms work with big brands already established in China and that they are quite expensive.
There are other ways to sell that don’t require a big investment in the beginning. Social e-commerce is popular in China, and platforms like WeChat, RED, Douyin, and Weibo offer online marketplaces that are cheaper than the giant players in the market.
Having a presence in China is fundamental when selling to local consumers, who will want to be able to recognize the brand and trust the quality of its products.
Chinese customers are very tech-oriented and tend to do an extensive internet research for product information. This is why it is important to focus on branding and e-reputation in order to gain consumers’ trust.
First step is to develop a Chinese website hosted in China, where consumers can read about the company and its brands, access all products’ information, and find links to social media accounts. Having a website also requires good Baidu SEO to increase visibility in this popular search engine.
Baidu works like Google. E-reputation is important in China and Baidu can help you get it. You can participate in online forums like Zhihu or Baidu Tieba to make your name known and to start conversations around your brand. This will also increase your SEO score.
Similarly, social media can help you gain the trust of your audience in China. As an example, social media is responsible for popularizing nutraceuticals among younger people. Not long ago, nutraceuticals were the choice of middle-aged and elderly people. However, thanks to the conversations among younger consumers on social media it has gained significant popularity.
Chinese people are strongly linked to their smartphones and rely on the Internet to choose good products. In general, they don’t trust unknown brands and prefer products with a good reputation that are perceived as premium and reliable. This makes e-commerce and community word-of-mouth recommendations essential for nutrition supplement sales.
Different purposes may require different social media platforms. WeChat is an all-in-one platform, where you can send newsletters, sell through private traffic, or own your store within the platform. Weibo will help you get to people of all age groups, while RED and Douyin will help you address young Chinese women and men looking for vitamin supplements through their favorite KOLs and live-streaming videos.
There are many options to consider and evaluate before choosing the right platform.
For example, By-Health has created the “By-Health Nutrition Academy” official account on WeChat -China’s largest social media- and invited more than 200 nutritionists and more than 100 experts in medicine and nutrition to share knowledge and reply to followers’ questions about health. This has increased brand awareness and promoted its reliability among Chinese targets.
Moreover, By-Health has been active in engaging its audience through community management. The company offers money to its followers in the form of a weekend bonus, and as a result, attracted the attention of additional users that now follow the brand and know its products.
By-Health is present everywhere on Chinese social media, trying to get as much attention in the nutraceutical market as possible. The company has also an official account on Weibo -China’s largest social network. This platform is suitable for event marketing and boosting brand awareness since its content is open to everyone.
The demand for nutraceutical products is growing rapidly in China, causing changes to the industry. Consumers are becoming more mature and traditional distribution channels are changing.
The Internet and digitalization have affected the way companies interact with consumers and create value. New competitors are constantly entering the industry with business model innovation. Companies that stay current and relevant can have an advantage over their competitors.
In China, the health supplement dividend is poised to pay off, as consumer awareness and knowledge of personal fitness has exploded, indicating rapid market expansion.
A recent survey by consulting firm Ipsos showed that 81% of the respondents were more concerned about physical wellness than before. Notably, 89% of consumers believe that adding "functional health ingredients" to food and drink will increase their purchase intentions.
The consumption of health products will gradually shift from optional to mandatory consumer goods.
For consumers to overcome a suboptimal health state, buying health supplement products ranked as the primary option for 64% of Chinese people to enhance their health condition, followed by regular workouts and taking tonics accounting for 61% and 57% of respondents, respectively. As such, from personal use to the whole family, health supplement consumption gradually becomes a necessity.
Due to the increasingly fast pace of life, young people in pursuit of nutrition are inclined to buy convenient products. Packaging convenience has been improved to support the daily habit of taking nutritional supplements, and convenient and small bags have become hot search keywords.
On JD.com, sales of portable sports protein powder and spoon honey surged by 68% and 1,095% YoY respectively. Sales of mini tablets are growing fastest, and sales of oral liquids are doubling.
Easy-to-carry products resolve customers’ pain points in diverse scenarios, including going to the office, on vacation, on business trips, and at the gym.
Consumers are also less likely to forget to take the product, be confused about how much to take each time, or suffer the burden of carrying the entire bottle or box of supplements.
Competition is growing, as both domestic and international brands are capitalizing on this market. International brands are launching via cross-border e-commerce and working closely with marketplaces to expand their reach to Chinese consumers. To date, a number of brands have debuted portable products, including Fancl, POLA, Swiss, Life Space, GNC, By Health, One-a-Day by Bayer, and homegrown brand WonderLab.
Customers' lack of knowledge about which products on the market are best for them is one of the main problems with China's health supplement market. One must do extensive research to find the right products, and they are frequently misled by false information in search results or social media posts.
Almost 60% of consumers who purchased nutrition and supplement products had previously bought imported supplements. By looking at the country of origin, they can determine the legitimacy of imported goods. Many foreign businesses are hesitant to sell their products in China because of the country's convoluted and opaque standards and regulations.
Key players in the market are CSPC Pharmaceutical Group, Fancl Corporation, Health Food Company, Shanghai Pharmaceuticals, China National Medicines, and GNC (General Nutrition Centers), Amway, Pfizer Inc and Bayer AG.
In China, the regulation of nutrition and dietary supplements is governed by the State Administration for Market Regulation (SAMR) and the National Health Commission (NHC). All supplements sold in China must be tested and approved by the State Food and Drug Administration (SFDA). The government also continues to strengthen and update its regulations to ensure that the dietary supplement market is regulated and operates effectively.
In China, nutrition and dietary supplements are not typically covered by the public healthcare system and must be paid out-of-pocket.
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