Chinese consumers prefer natural dietary supplements. In fact, they are more interested in the traditional Chinese medicines because of a deep-rooted belief in these products.
This article will analyze a booming market in China: the dietary supplements market. How to advertise and sell these products in China?
The Chinese market for dietary supplements will expect to reach CNY 149 billion (US$22.3 billion) By 2020. China is already the second largest consumer of dietary supplements after the USA.
The Chinese market specificity is its very strong segmentation with a lot of very small manufacturers. The 50 largest producers occupy only 1/3 of the market.
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Traditional natural dietary supplements continue to attract attention
Chinese consumers prefer natural dietary supplements, and they tend to trust traditional Chinese medicines. Consumers over 60 age are a group which represents a significant and an ideal target for manufacturers, but unfortunately, this group is hard to target with e-marketing promotion tools as they remain very traditional and reluctant to lifestyle changes. They appreciate the Chinese traditional medicine, conveying images of ancestral health, magic, esoterism and so on … But we don’t have to lose faith as these concepts which were exported to the USA (ginseng, goji, reishi, …). We should also convince old Chinese to consume western dietary supplements with an appropriate marketing strategy. Old Chinese are very superstitious. Brand communication for dietary supplements should ride this big wave and promote the products as being healthy and spiritual. Ginseng: . Goji: . Reishi: . The average turnover dedicated to R & D is only 1.67%. This means that there is very little innovation and that manufacturers will all merely market copies of existing products. On average 6.6% of sales are invested in advertising. So marketing and communication play a key role in this industry. Nevertheless, if many retailers have websites in Chinese most of them don’t have an integrated digital strategy. Most of them have no Weibo or Wechat account. But Chinese people buy products because their friends or opinion leaders recommend the product. The purchase of vitamins and food supplements is often the consequence of a recommendation made by friends or family members in China. Consumers aged under 40 represent 62% of total buyers of food supplements. Indeed this age group is relatively young and ready to accept new concepts. They often buy food supplements for themselves as well as their parents, grandparents and children as gifts. Dietary supplements are expensive and often associated with luxury products despite their lack of glamorous 😉 In terms of marketing one should keep in mind the emerging concept of “healthy gift”. This is both a threat and an opportunity. Threat as dietary supplements pharmaceutical products faces competition from so-called “traditional natural medicine.” Opportunity because China’s population is more and more aware than the western population of the link between diet and health.
Regulation when it comes to dietary supplements in China
Differences between France and China: In France, the official definition of “nutritional supplements” appeared in 1996 in the Official Journal: the aim of a “nutritional supplement” is to overcome a deficiency … Then vitamins, minerals, proteins (except creatine), and some plants are designated as “nutritional supplements”. In China, the official definition of “nutritional supplements” appeared in June 1997. To be recognized as a dietary supplement by the Chinese administration, the product must meet the following 3 criteria: (1) Being ingested orally (2) Having at least one out of the 22 preventive functions recognized by the Ministry of Health (3) Do not be a curative drug. All supplements sold in China must be tested and approved by the State Food and Drug Administration (SFDA). Complicated and non-transparent standards and regulations in China have created unnecessary hesitation of many foreign companies to sell their products there.. . Nowadays regulations in China are on the verge of a harmonization.
Communication is the key factor of success in this industry. Curiously, the first communication channel in China for food supplements is the TV. Many advertisements are placed on television. But we can wonder if it will last because Chinese consumers are more and more suspicious with the institutional TV programs. The Internet is the first source of information for those consumers who are looking for accurate information. But regarding nutritional supplement TV spot remains, for now, the main media channel of communication. But no doubt that things are going to change in favor of digitally integrated campaigns.
Imported food supplements
Chinese have a growing taste for imported food supplements. Food supplements companies should target the Chinese capitalizing on concern over food security as the Chinese middle-class consumers increasingly conscious about health issue rush to food supplements. Just pay attention to the rich Chinese tourists visiting New York City and you will probably see bags from GNC or Vitamin Shoppe among those from brands like Chanel, Berger-Goodman or Barney.. The additional cost that Chinese consumers are willing to concede to their health – and the population of China is huge – is synonymous potential windfall for major producers and retailers of a dietary supplement in the United States and Europe. As noted in the China Daily: “It is estimated that sales of vitamins and dietary supplements as food additives and nutritional supplements in China will reach 95.2 billion dollars by 2015.” The increasing solvent demand awareness regarding health issues, the worsening health problems due to environmental destruction and the aging population are the three main reasons that explain such a trend. Average spending of Chinese consumers on health products in 2011 accounted for 0.1 percent of total expenditures. In comparison in developed countries, people have spent only 0.03 percent of their expenditures on food supplements. That means that the Chinese clearly pay more attention to health issues. .
The leadership of American groups
63% of all these supplements came from the United States. Among major American brands in China, there are Amway (who, despite marginalization in its domestic market, holds 16 % of market share in China), NBTY based in New York and Pennsylvania-based GNC. Despite a strong market presence in Hong Kong – where it gained popularity thanks to the Chinese diaspora tourists visiting their country of origin – CNG is relatively new in mainland China, having only launched in Shanghai, Guangzhou and Shenzhen in August. But despite significant barriers to market access and the difficulty in order to obtain compliance with SFDA the 30 percents of the annual growth rate of the healthcare products market in China will attract a growing number of other international manufacturers. ..
The children segment of the market
Although sales of vitamins and other health products for adults are booming in China, it is especially true when it comes to the segment of food supplements for children. In recent years, Chinese parents were willing to spend relatively large amounts of money on the health of their children in relation to family income. This is a result of the contaminated milk scandal in 2008. In 2009, English brand Biostime represented 85.4 % of market share in retail sales of probiotics for children in China. GMA worked with Infat-Advanced Lipids. Advanced Lipids is a joint venture by AAK and Enzymotec. They are seen as a reliable, high-value partner to the infant formula industry.
INFAT is a specialized fat ingredient for infant formulas. It has been manufactured and marketed by Advanced Lipid for over a decade.
Chinese women: a specific target
Chinese women also consume a lot of beauty supplements and/or diet (jojoba, aloe vera, or citrus pills …). Women represent 49% of the total urban population. This population of urban women spends 46 billion RMB for purchases of nutritional and beauty supplements.
.French manufacturers of vitamins and food supplements:.
- Zhejiang Medicine Co., Ltd..
- Zhejiang NHU Company Ltd.
- Northeast Pharmaceutical Group Co
- CSPC Weisheng Pharmaceutical Co..
Sanofi-Aventis in 2011 attacked the Chinese market with a partnership with Minsheng laboratory. They created a joint venture, where Sanofi prevails. The advantage of this kind of strategy is to benefit local brands already well known by Chinese. In this case, Sanofi ‘s partner Minsheng is already well established with its flagship brand “21 Super Vita”. .
How to Market dietary supplements in China
E-Commerce in China for Dietary Supplements is the best way to increase your Sales
In China, the process for health Product registration is an extremely long, and there is no guarantee of approval in a system. Actually, many brands use an E-commerce platform for selling their product in China, because it no requires a license so long as you gain approval from the relevant cross-border platforms. Don’t forget that China is the World largest connected country, with a huge online population of over 900 million citizens and 250 million e-shoppers an online sales infrastructure. In China, the biggest E-commerce platforms are Tmall, JD.Com and Taobao. We also noted the entry of new E-commerce players such as Little Red Book, Pinduoduo…. . If you really want to establish your business in China and increase your revenue, you have to be Online and be present in the right and most powerful Platform In China.
Cross-Border is a good weapon For Business
Chinese People travel a lot, so they are more familiar with the foreign products. China has Changed all regulations about the Cross-border market. With cross-border e-commerce, Chinese consumers are able to experience the brand in a local format They can easily buy from abroad and the product is shelved offshore until sold. The are some advantage of the E-Commerce Platforms:
- The shipping times are shorter– same-day or one-day for all tier-one cities, versus two to four days from a Free Trade Zone.
- You are able to offer customers the option to return the product.
- The numbers are simply greater.
Tmall is the best Platform for Sales
Tmall is the largest and most reputable cross border e-commerce platform in China, it is associated with good quality and authenticity in a market-place. A lot of Dietary supplement brands seek to establish a store.
A Tmall.com storefront is essential to the retail strategy of leading global businesses for China market penetration. There are two ways to join Tmall’s platform:
- Companies with China in-country business operations can apply to Tmall.com.
- Companies with overseas licenses are eligible for Tmall Global.
Tmall.com provides some infrastructure to host your storefront and unfiltered access to hundreds of millions of shoppers.
The Chinese don’t Buy just a name but an Established & Authentic Dietary Supplements Brands
The brand need to improve their image by featuring their headquarters, offline stores and also participating of some events such as a sponsored Marathons to promote health. You have to work on your reputation, the best way is to work with an digital agency that can help you to erase all bad comments or image about you. Chinese customers buy established & authentic brands that are engaged to be large players in their country. Thanks to an Innovative and intelligent digital marketing you can create a very powerful image online that reflects the real you. In the same way, GMA worked with DHA France. In Fact, DHA France is a mother-baby products brand under a French laboratory, PHOSPHOTECH SAS. We Helped them to their products in China market, and conducted their digital marketing in Chinese platform.
Adapt a QR Codes to your business
The QR Code is a powerful method for driving traffic between multiple platforms. Actually, the QR take a big part in China because just through a scan with you smartphone you can easily buy an item or download your App. QR code use a series of codes to re-direct buyers to:
- An app,
- WeChat account
- to the shopping cart page via mobile.
Users can scan directly with their mobile active a code link from the Tmall mobile browser.
Creating the real Shopping Experience
Creating the shopping experience is important and for that, you need to engage in:
- Targeted Branding
- Creative Chinese Brand Development
- Targeted Ads (DSP/Media Buying)
- Social Media to Drive Traffic (Weibo, WeChat etc)
- Quality Store formatting and design
The Social Media Campaign is crucial
https://www.youtube.com/watch?v=O9wcyhBeUhc&t=14s In China, Social Media means a lot. If you want to be more visible or reach a lot of customers you have to me present on Socail media, Not all of them but mainly on Wechat and Weibo which are the most powerful social Network in China. Wechat is the first most popular Chinese social Media, with more than 1 Billion active users. It’s Just amazing how you can take advantage of this. Not only the most use App, Wechat also have a lot of functionalities such as Pay Bill, Make a reservation, Buy Food,….., We also have a Wechat store for sales and Wechat official Account for helping the brand to reach more people. Moreover, Wechat integrated also some Mini Programs that brand can use for expand their business Online. Weibo is also very popular in China, with more than 650 million active users. You can use it to promote your brand and get more visibility.
Collaborate With Kols
Chinese Kols are very powerful, just through an article, Comment or Video they can completely change your business for the best or the worst. They are able to influence the Chinese decisions. Don’t lack this opportunity to collaborate with the most talented Kols in order to become the leader of the market. In this domain, you can trust us. GMA work with over 100 Kols. We can help you to find the right kol for your business. We know how they work and we can guarantee you a big successful campaign.
Tmall B2D: Business to Chinese Distributor
This is a new form of distribution. Advantage of this platform:
- The platform is opened to foreign companies: No Chinese Business license required
- Alipay is the most used payment method in China: Payment by Alibaba
- The most famous e-commerce platform Tmall is well-known for its strict door-policy: The Perfect Solution for New Brands in China
- Stand alone Tmall store requires a huge amount of time & investment: Multiply your Sales Channels
Conclusion: The dietary supplements market in China is booming. European manufacturers (especially French) as well as retail chains specializing in organic food should invest in this market by demonstrating marketing innovations (using my services for example ;-)) if they do not want to be completely defeated by their American competitors. What is the future for Manufacturers of nutritional supplements … ?