China as an Attractive Market!
• China forecast to achieve 7%+ GDP
growth in the next 5 years!
• Large market size: 575 million (urban) +
765 million (rural) !
• Rapid urbanization and increasing upper
middle class will support sustained
• Ageing population will drive continuous
growth in healthcare. 180m+ people will
be over 50 yrs old in the next 10 years!
• Chinese consumers increasingly accept
imported products and ﬁnd them
Source: China Nutritional Supplement Market Overview (David Zhang)!
Growing VDS & Nutritional Foods
Industries in China!
Source: China Nutritional Supplement Market Overview 2012 (David Zhang)!
Market Growth by Product Category!
Source: McKinsey Report on Nutritional Supplement Market, China Nutritional Supplement Market Overview 2012 (David Zhang)!
Size in USD millions
Source: Annual Report On Healthcare Food Industry of China No.1, Page 194, 200!
Popular Functional Products! Purpose of purchase!
Popular imported dietary supplements include
herbal, beauty and weight control products.!
Retail Sales & Market Share"
Source: Annual Report On Healthcare Food Industry of China No.1, Page 246!
2010 total retail sales (through
shopping malls, supermarkets):
RMB64.1billion, up 14.4% from 2009!
Sales through other channels such as
pharmacies (drug stores),
conferences, Internet, direct selling,
etc. are not included. !
Dietary Supplement Sales Channels
Source: Annual Report On Healthcare Food Industry of China No.1, Page 204!
Demand is concentrated in Tier-1 and
Very fragmented market with the top
10 players holding less than 25% of
Chinese Consumers Perception about
Imported Dietary Supplement Products!
Source: Annual Report On Healthcare Food Industry of China No.1, Page 219!
Foreign companies can
potentially tap into 76.7% of
the market where
consumers are open to
buying imported products!!
Barriers to Entry!
High brand building and channel
Foreign companies often neither
understand the Chinese culture nor
have right connections!
High human resources requirements
and difﬁcult to ﬁnd and retain talent!
Regulatory environment: highly
regulated and frequently changing!
Opportunities Are Massive, So Are
• CIQ (China Entry-Exit Inspection
and Quarantine Bureau)
• Selecting a right import port (over
100 ports in China) and complying
to its varying import requirements!
Must meet the regulations of these
• Ministry of Health!
• SFDA (State Food & Drug
• AQSIQ (General Administration of
Quality Supervision, Inspection and
• SAIC (State Administration for Industry
• “Blue Hat” (quality & safety) registration!
Regulatory Requirements for Importing
The regulatory processes are
stressful. Most companies
use agents to handle the
Successful Entry " Successful Sales !
! Product must be market-ready before distributors can accept it!
! An effective marketing and sales model in China relies on established
distribution network and wise pricing!
! Internet selling is growing but it will not work without a recognizable
! Without connections with a powerful national distributor and key
inﬂuencers in the market, companies will bear high marketing, channel
operating and HR costs with little chance for success!
! Marketing materials must be in Chinese and accessible to the
How Imported Dietary Supplements
Reach Chinese Consumers!
Manages regulatory compliance including product
registration with multiple government authorities - critical to
entering the Chinese market and often time-consuming and
Sets marketing strategies and plans including brand building,
channel strategies and pricing. Very powerful in the supply
chain. Finding a right ND determines sales success!
Implements the marketing plans set by the National
Distributor. Absorbs logistical and marketing costs !
Consumers usually accept RRP of under RMB300/product.
Foreign companies must understand how pricing works at
each level of the supply chain. !
Success Factors - 3C s!
! Understand and appreciate the unique
Chinese culture for doing business!
! Have language capabilities to
communicate messages in China in a
culturally intelligent manner!
! Understand the needs and buying
behaviours of Chinese consumers!
! Segment and target the right
consumers and understand the most
effective marketing tools to reach them!
! Doing business in China is largely
about connections !
! Building trust and lasting relationships
with the right agents and distributors
who have knowledge, experience &
powerful marketing capabilities is often
critical for success!
that have potential
Our Value Chain!
We consult with your
company and our
Chinese partners to
break down the entry
and market barriers
We ensure your
factors - 3Cs!
Who We Are!
• Is the largest and most inﬂuential organisation in China s healthcare
industry, consisting of nearly 1,000 companies, many of which are key
distributors and manufacturers.Through CHCA s Committee of
Health Care Consultation, we engage in market strategy consulting,
health food registration advisory services, law and policy research,
healthcare industry research, evidence-based study of health food
products, domestic and international health food industry
communications, as well as healthcare industry conferences and
• Our expert team consists of richly experienced consultants and
technical experts for food, medicine and biology. !
• We maintain a strong relationship with Chinese regulatory authorities. !
China Health Care Association (CHCA)!
Why You Will Work with Us!
• Proven track record in successfully bringing Western brands and
products into China!
• As the healthcare industry s opinion leader, we are able to leverage
industry resources to your beneﬁt, assisting you in selecting the right
partners and navigating the Chinese market!
• Strong connections and partnerships with other key market players
including successful national distributors. Our partners competently
handle regulatory requirements, have proven experience in market
success, and maintain close relationships with regulatory authorities. !
• Qualiﬁed and customer-centric trilingual (English, Mandarin, Cantonese)
consultants who will build a bridge to China for you!
Speciﬁc Services Available to You (1)!
Our services cover almost the entire supply chain for imported products.
Working together with our Chinese partners, we are able to help your
1) Understand the Chinese healthcare and dietary supplement industries
and market and provide all kinds of market data!
2) Handle all registrations with the Chinese government for health food
(ﬁnished products or ingredients), cosmetics, medicine, medical appliances,
3) Understand the importation options and procedures and optimize the
process for you!
4) Understand the IP situation in China and handle the IP protection and
patent registration for you!
5) Establish sales and marketing channels including traditional and online
channels and ﬁnd you distributors of various sizes!
Speciﬁc Services Available to You (2)!
6) Find all sorts of marketing service providers in China for product
positioning, packaging, advertising, etc.!
7) Organize seminars, trade fairs, conferences, press meetings, etc. !
8) Find land and facilities if you want to open your own factory or subsidiary
9) Find ingredients for foods and functional foods!
10) Arrange ﬁnancing options !
11) Manage public relations!
12) Manage other ongoing issues or crises!