2. 2
The Chinese market for vitamins and
dietary supplements
The purpose of this rapport is present facts about the Chinese market for vitamins and dietary
supplements, which are relevant for the characteristics of Substance from Meabco A/S.
First of all let’s take a look on the effects of Substance:
Anti-aging
Strengthening of bones (useful for elderly citizens and pregnant women)
Strengthening of immune system
Strengthening of hair and nails
Improving metabolism
Improve digestion
Increase efficacy when pregnant
Increase well-being and safety in children
Increase well-being
Increasing quality of blood
Skin health
The plan is to sell these effects separately in different products.
Development in China so far
We start of by taking a look on the development in the Chinese market where it grew from 57.7 in
2009 to 100 billion Chinese yuan (CNY) in 2014. This is an explosive growth of 75 percent.
Dietary supplements
Dietary supplements are the biggest category. It has risen from 38.36 billion in 2009 to 70.39 billion
CNY in 2014, which make it an interesting market for both Chinese and foreign companies.
3. 3
Vitamins
The market for vitamins has been rising in China during the last half decade. Overall vitamins stand
at around 13 billion CNY in 2014.
Multivitamins rose from 6,67 to 9,53 billion
Vitamin B rose from 721,8 million to 1 billion
Vitamin C rose from 845,7 million to 1.31 billion
Vitamin E rose from 769,5 million to 1.14 billion
The reason vitamin C and E sell well is because of their anti-aging and immune boosting qualities.
However, in order to maximize the effect of E-vitamin you have to take it alongside food products
containing fat such as corn, egg cheese and milk.
Actually, some consumers do not believe in taking supplements for vitamins. They instead prefer
fresh vegetables and fruit1
. However, Chinese consumers are increasingly in pursuit of targeted
multivitamins, which suits their situation or wishes2
. This has seen an increase in sales of age- or
gender-specific products.
Multivitamins for specific groups
Elderly: risen from 5.6 percent in 2009 to 7.9 percent in 2014
Pregnancy: risen from 1.5 to 3.4 percent
Women: risen from 1.8 to 3.5 percent
Men: risen from 0.6 to 1.7 percent
Also noteworthy is weight management, which is a separate category from vitamins and dietary
supplements. This area of consumer health is expected has risen from 5.47 in 2009 to 6.31 billion in
2014
Pediatric vitamins and dietary supplements represented 18 percent of total vitamins sales in 2014
(7,3 billion CNY). Cautiousness from parents, when choosing VDS for their children, being an
obvious barrier. Calcium supplements and protein powder, to supplement nutritious elements for
growing children, were popular in this segment.
1
Euromonitor 2015;2
2
Euromonitor 2015;2
4. 4
The greying population, an increasingly busy lifestyle and the mounting pressure from life and
work are all factors that push up the demand for consumer health products. Stronger purchasing
power means a pursuit of consumer health products that are able to boost immunity, delay ageing
and fight fatigue3
.
Just that is being offered by Infinitus, which is the second largest company on the market China.
They offer a variety of consumer health products that can strengthen the immune system, anti-
ageing effects, relieving fatigue, cardiovascular health, digestive health, liver health and reducing
blood sugar. These effects are in higher demand today, which is seen by the numbers below.
All the products contain traditional Chinese herbal ingredients, which is in line with consumer
demand4
. It mostly comes in the form of pills and capsules, but also in the form of tonics and
bottled drinks5
.
Market shares by relevant groups (out of 100 percent)
Immune system up from 21.9 to 23.7 percent
Bone down from 26.6 to 25.7 percent
Digestive up from 1.9 to 2.1 percent
Beauty up from 13.1 to 13.6 percent
General health down from 13.3 to 12.3
Heart health at the same level
Bone health and immune system stand for nearly 50 percent of the total value sales in 2014. These
dietary supplements, such as calcium supplements and ginseng, target senior consumers and
working consumers with a hectic daily schedule.
Beauty is another growing positioning of dietary supplements, which aim at women wanting a
younger and fairer appearance.
New combination formulas, such as Herbalife Active Fiber Complex, made from herbal ingredients
like apple fibre, citrus fibre, and sophora flower etc., are positioned as digestive health supplements,
3
Euromonitor 2015;30
4
See top of page 4 of this report
5
Euromonitor 2015;27
5. 5
claiming to help control calorie intake and burn body fat. These are receiving mounting attention
from local consumers.
Natural and easy on the go
Herbal/traditional combo dietary supplements are increasingly popular with consumers. They crave
convenient and balanced supplements, and supplements with herbal/traditional ingredients are
deemed to be milder with fewer side effects6
.
There is both stronger purchasing power and a demand for high-end products in China. This is
exemplified by the launch of Naturone, containing carefully-selected upmarket raw materials,
including organic herbs in 2014. The product claims to boost immunity, and it is sold at CNY 1,999
per bottle (which amounts to 60 tablets). This is far higher than other products with similar
ingredients. International kung-fu star, Jet Li, was used to help promote the brand7
.
In general, capsules, tablets and oral liquid are the popular delivery formats in China. This is
because of convenience and hygiene. Demand for single-consumption pack size is on the rise
enabling on-the-go consumption.
This is also seen with the rising popularity of Tonics and bottled nutrition drinks, which has have
risen from 5.92 billion in 2009 to 9.31 billion in 2014.
The latest additions are various collagen drinks, claiming to achieve soft and supple skin with
reduced wrinkles and mainly targeting female consumers.
Companies present in China
Some western firms are currently present on the Chinese market: Johnson & Johnson, Wyeth,
GlaxoSmithKline, Pfizer and Bayer. They are however some way behind market leaders Amway
and Infinitus8
.
Below is a ranking of the relevant products and their makers in the different categories, which are relevant for Meabco A/S.
Rank Immune
system
Bone
strengthening
Digestive Multivitamins
for elderly
Multivitamins
for pregnancy
6
Euromonitor 2015;1
7
Euromonitor 2015;30
8
Euromonitor 2015;41
6. 6
products
1 Nutrilite
from
Amway
Nutrilite Calcium
Magnesium Tablets
from Amway
Sanjing Zinc
Gluconate
Oral Solution
from Harbin
Pharma
Centrum Silver
from Pfizer(USA)
Elevit from Bayer
(Ger)
2 Infinitus
from Lee
Kum Kee
Caltrate D from
Pfizer (USA)
I & Onlly
Liquid from
Shanghai
Jiaoda Onlly
Co
Goldpartner from
Stone group
Holdings
Matema from Pfizer
(USA)
3 By-health
from By-
Health
Tiens Calcium
Powder from Tiens
Group (Tianjin
Tianshi)
Onlly You Jun
Duo from
Shanghai
Jiaoda
Golden Scrianen from
Beijing Scrianen
Pharmaceutical
Relevant companies share of the Chinese market
0 2 4 6 8
Market share
in 2014
Bayer
GlazosSmithKline
Harbin
Stone Group
Nu-Skin
Wyeth
By-Health
Johnson & Johnson
Perfect
Tianjin Tianshi
Infinitus
Amway
There are many firms on the Chinese market, and only two firms (Amway and Infinitus) have a
7. 7
considerable market share. This means different options if one want to enter the Chinese market
with product(s)
Option A: Collaborating with international firms already present (Wyeth, Johnson &
Johnson, Bayer, GlaxoSmithKline)
Johnson & Johnson have seen a steady increase in market share from 1 percent in 2009 to 2.5 in
2014. The opposite can be said of GlaxoSmithKline with a decline in market share from 1.5 to 0.9
percent. The money is certainly there, but the question is how big the interest and patience is.
Immune system and digestive could be interesting for these firms seeing that market leaders here are
all Chinese companies.
Option B Market leaders (Amway and Infinitus)
Pregnant and elderly are areas of Substance could interest the biggest firms. These categories are
currently dominated by foreign firms.
Option C Local companies with potential
Some local companies have experienced significant growth and must be expected to have an
interest in expanding further. These companies are Tianjin Tianshi, Guangzhou By-Health, Perfect
and Nu Skin.
One way of doing this could be by collaborating with Meabco.
Future prospects in China:
Overall the market for vitamins and dietary supplements is expected to grow to 127 billion CNY in
2019.
Dietary supplements are expected to rise from 70.39 billion in 2014 to 90.19 billion
in 2019
Vitamins are expected to rise from 13 to 15.5 billion CNY
Tonics and bottled nutrition drinks expected to rise from 9.31 billion in 2014 to
12.35 billion in 2019. 1
A rise in Pediatric Vitamins and Dietary Supplements from 7.34 to 9,37 billion
8. 8
Immunity boosting, anti-ageing and anti-fatigue functions are likely to continue their popularity in
the forecast period for VDS, thanks to the greying population, the accelerated life pace and
mounting pressure from life and work9
.
Consumer health products are expected to experience steady demand over the forecast period. The
population aged 65+ in China is anticipated to grow by about 33% from 2014 to 2019, far higher
than the total population forecast growth at 2% in the same period. The rising consciousness of
personal well-being among these senior consumers in particular is likely to be translated into the
growing demand for consumer health products, including varied dietary supplements, to lead a
healthier life.
A rise in Multivitamins from 9.53 to 11.09 billion
A rise in vitamin B from 1 to 1.16 billion
A rise in vitamin C from 1.31 to 1.75 billion
A rise in vitamin E from 1.14 to 1.44 billion
Weight management is expected to continue its rise from 6.31 billion in 2014 to 7.29 billion in 2019.
Where in China should one focus?
Three regions stand out both now and in the future: East China, North and North East China and South China
are the biggest markets both now and in the future. South China will have the biggest growth with a 27.98
increase from 2014 to 2019. This is sharply followed by East China with an increase of 27.72 percent and
North and North East China with 25.9 percent.
9
Euromonitor 2015;4
9. 9
0
10
20
30
40
50
60
East
China
N and
NE
China
S
China
2014
2019
East China
Fierce competition among pharmaceutical companies due to high concentration of
multinational pharmaceutical companies
High cost of labour and rent
Still the ideal region for local players to establish product awareness10
Vitamins and dietary supplements continued the double-digit value growth in 2014
Consumers caring about balancing their nutritional intake and preventing diseases
The greying generation in this region stimulates the need of calcium supplements
Parents concern for their children’s health has resulted in the strong growth of pediatric
vitamins and dietary supplements.
Mid China
Mostly agricultural
Relatively low GDP per capita
Government focus on the region to grow economically
However, purchasing power and health awareness is on the rise
10
Euromonitor 2015;32
10. 10
North and North East China
Fierce competition
Local protection policies
Growing health awareness and the bad quality of air in Beijing and Tianjin
Focus on build-up of bodies, enhancing immunity system and staying healthy.
Successful campaign to crack down on illegal cooperation, which is a good signal for a
better-regulated environment for vitamins and dietary supplements in North and Northeast
China.
Product categories such as proteins, calcium supplements as well as those focusing on
general health are now well accepted and widely purchased
Worse of is products containing new ingredients, such as collagen-added calcium
supplements.
Product efficacy and quality are increasingly valued by local consumers, which enable
major international brands to experience faster growth than domestic players.
North West China
Citizens can receive financial support from the government annually through health
insurance card.
Internet retailing is becoming the main access for local people to get the international brands
and best-selling products like pediatric OTC(sold over the counter).
Local companies enjoy a geographical advantage in producing herbal dietary supplements
The Gansu government decided to invest CNY50 million annually to develop
herbal/traditional Chinese medicines in September 2013.
Herbal/traditional products are prioritized for local healthcare institutions and hospitals.
187 Tibetan Medicines were included in the EDL in Qinghai province, which help benefit
nearly 500 million residents
Compared with the decelerating economy growth in coastal provinces, the great potential of
per capital GDP growth in Northwest China has attracted both domestic and international
players to seek new growth engines
Proteins, calcium supplements as well as those focusing on general health are now well
accepted and widely purchased, compared with the products containing new ingredients.
11. 11
South China
Consumers have gradually become aware of the importance of building a fit body and losing
weight in a sensible way. In the large cities of South China, especially Guangzhou and
Shenzhen, many fitness clubs are newly opened
Growing consumer awareness of well-being and the government’s tendency to regulate less
of the OTC market.
Compared with vitamins and calcium supplements, which is near saturation, sports nutrition
may see a higher growth rate as it is still unfamiliar to Chinese consumers.
South West China
Compared with other regions in China, Southwest China has seen a series of relatively
stronger political support from local governments who attached great importance to the
economic potential brought by the medical industry
Synthetic drugs face relatively greater challenges from traditional Chinese herbs in
Southwest China, especially in Guizhou, Yunnan and Tibet
With increasing economic power in recent years, Southwest China has been seen as a crucial
market place for brands.
Local governments are mapping out strategies to enhance competitive edges of economic
development by fostering giant pharmacy corporations
Unique geographical conditions and a rich herbal resource.
Consumer behavior
Another important aspect is where consumers go to buy their goods. The tendency is quite clear,
movement away from physical shops and towards more non-store retailing. The latter mainly made
up by direct selling and internet shopping.
12. 12
Stores
Non-stores
Stores
Non-stores
Conclusion
The market for vitamins and dietary supplements in China has had a huge growth in last five years.
The market will continue to grow, but there is going to be a shift from the general health to more
individual needs (pregnancy, immune system, bone strengthening). This could mean great
opportunities for Substance from Meabco A/S because of its many different effects.
In order to enter the Chinese market a collaborator is need. There are a lot of different companies on
the Chinese market, but the strategy will determine which to target.
The economic, social, and agricultural difference between the five regions is also a factor worth
noticing.
Focus should both be on internet sale and stores because of changing consumer behavior.
2009 2014
