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Trends in China's Health Food Industry

2018-11-13 09:21 Tuesday


China's health food industry has maintained rapid growth in recent years. Global brands see huge potential in China, and with the aid of cross-border e-commerce, have rushed headlong into the Chinese market.

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Capital Inflows Health Food Industry

In the second half of 2018, there has been a flurry of mergers in the health food industry. Kangmei acquired a number of domestic brands in China, BiosTime acquired Swisse in Australia, and Kingdomway bought iHerb, an American health food brand, for $100 million.

The above brands, which range from vitamins, to protein powders, and a wide range of other product categories, occupy substantial market share. Chinese firms have acquired overseas brands that sell their products in China through cross-border e-commerce channels. This business model is expected to become predominant in the nutrition and health product market.

Branding the Key to Success

Consumer acceptance of health foods has determined the size of the market. Therefore, brand owners must educate consumers about the benefits of their products, in to achieve sustained growth. Leading health food brands have spent a lot of resources in the early marketing stage to educate consumers and expand their reach.

The establishment and operation of health product brands has unique challenges, including strict rules on advertising content.

Competition will Heat Up

On July 1, 2016, the dual-track system for registration and filing of health foods was implemented. The new regime had made the competition in the health product market more intense, especially in the fields of vitamin and mineral products.

Supplements vitamins and minerals need only be filed under the new system, opening up the Chinese market to foreign brands, and introducing fierce competition with regard to taste, packaging and price.

Despite recent strides, China's health food industry still has a lot of room for growth and improvement. The next few years are crucial, as Chinese companies invest more heavily in brand operations to compete with established global competitors.

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