Market Opportunities In China: Healthy and Natural Products

by Joe

Since 2014, China has held the mantle of being the most health-conscious country in the world.  Changed attitudes and increased interest in healthy and natural foods and beverages has led to a booming industry which by 2020 will exceed $70 Billion.   

As an example of growing demand for healthier foods and beverages, the marketing research publisher, Mintel, recently published a report on plant protein drinks (PPD) in the country.  Nearly nine in ten (87 percent) Chinese consumers now drink plant-based concoctions, be it soybean drinks, juices or grain drinks.  

The quest for better health is pursued differently among different Chinese consumer market segments. This chart from management consulting group, McKinsey, provides detail about five major segments.

Factors Behind the Trend

Increased Affluence:  A growing middle class living in China’s largest cities, such as Shanghai and Beijing, have increased awareness about healthier living and are willing and able to pay higher prices for healthier products. 

Rising Influence of Western Culture:  Western media has increased Chinese awareness for healthier eating and healthier life styles.  Gyms and fitness centers comprise a $6 Billion industry.  There are now over 37,000 gyms in China.  Nearly seven million Chinese are members of gyms, this is twice the amount as compared with 2008.  Sportswear, to go along with the more active lifestyle,  is also growing in popularity.  By 2020, this category will be more than $43.1 Billion in size. Fitness apps are also a recent craze.  One Chinese fitness app, Keep, actually boasts 100-million downloads/ users. 

Demographic Factors:  There are 415 million millennials in China today and many of them have the income to support interests in fitness and health related products.  Conversely, there is also a ‘graying’ among Chinese citizens.  Nearly 22% of the nation’s population will be over 60 in the next eight years.    As we have seen in the United States, aging consumers are looking to dietary supplements and exercise as preventative medicine aids. 

Two Consumption Paths:  Two distinct lifestyles have emerged in China in recent years.  One portion of the population has been influenced by China’s open policy to Western culture and lifestyle as well as technological development.  Another portion of  the nation’s citizens continue to live more traditionally Chinese lifestyles.   Those leaning toward a Western lifestyle tend to rely more on the media when forming attitudes about consumption.

Those Chinese who lead more traditional lives show greater demand for organic and healthy food, disease treatment and simpler recreations as hiking or going to the movies.  Chinese who are more westernized are opting for sports and fitness, and overseas travel.  These consumers tend to rely more on word of mouth from friends and family

The roughly even split in consumers’ lifestyle preference cuts across income groups, generations and geography.

 

Nutritional supplements are among the growing categories that Chinese consumers are turning to in their quest for wellness.

High Demand Products

Sales data extracted from Tmall presents these general consumption trends in greater detail.  For instance

·         Skincare products (e.g. moisturizer and sunscreen) have grown substantially, especially among products made with natural ingredients.

·         Vitamins and food supplements

·         Fresh produce

·         U.S. seafood (demand for local seafood has diminished due to health concerns)

·         Sporting Goods – including both outdoor gear and equipment for specific sports or workouts

·         Organic products – formaldehyde-free furniture, preference for natural textiles versus polyester, growing preference for sustainable products

 Astute marketers with an eye on growth in China will be looking to their products and marketing plans and making appropriate strategic and tactical decisions. 

 

Selecting healthier foods, pursuing a more active fitness regime and monitoring activity and diet with smart phone apps are just several of many ways that Chinese consumers are striving for wellness.

 

Word 4 Asia has extensive experience working on the Chinese mainland.  We help our clients achieve their objectives there by staying on-top of the ever-changing dynamics of this massive nation.  We work closely with our large Chinese network and the Chinese authorities to ensure that our clients goals are achieved under the parameters of Chinese law.  Success in China requires an intimate understanding of the cultural, legal and market forces at work there.  We only work in ways that are sensitive to local law, customs and China’s cultural heritage.  If your organization’s ambitions point towards China, we’d love to talk with you.    

Our sister company, Wellness 2 Asia, specializes in bringing better nutrition and health to China through a line of nutritional supplements.  We are leveraging our strong mainland network to reach even the hard to reach rural communities. 

To contact Gene Wood about consulting services or possible new distribution opportunities, use either of his two email addresses:

gene@word4asia.com

gene@wellness2asia.com

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