By Jacob Cooke, Co-Founder and CEO, WPIC Marketing + Technologies10.03.23
The nutraceuticals sector has seen explosive growth globally in the last few years, but nowhere is this more evident than in China.
With China’s burgeoning middle class and an intensified focus on health and wellness among Chinese consumers, the market presents vast opportunities for American nutraceutical companies.
However, the Chinese market is also incredibly complex and competitive—so American nutraceutical brands need to be equipped with the right tools and strategies to capitalize on this unparalleled growth opportunity.
As an end-to-end e-commerce service provider in the Asia-Pacific region, WPIC Marketing + Technologies manages the Chinese e-commerce operations for several leading global nutraceutical brands. Over the past year, WPIC has also partnered with the United Natural Products Alliance (UNPA) to increase exports of U.S.-made dietary supplements to China. UNPA brings decades-long expertise in the industry as well as its Market Development Cooperator Program with the U.S. Commerce Department’s International Trade Administration.
Here are some of the primary insights we’ve gathered about the China nutraceuticals market, drawn from our experience running brands in the market, our in-house data sciences team, and our collaboration with UNPA.
According to WPIC’s data sciences team, sales of overseas supplements on Alibaba’s Tmall Global platform amounted to USD $2.8 billion from September 2021 to August 2022, representing a 13% increase from the year prior. From September 2022 to August 2023, sales grew 27% to hit USD $3.5 billion.
Tmall Global is China’s largest cross-border e-commerce marketplace, and over half of Chinese nutraceutical purchases occur online, making this data a good barometer for the state of the overall market.
In short, it’s a market that is both massive and rapidly growing.
Several socio-economic and cultural factors are underpinning the growth of nutraceuticals in China, starting with the surge in awareness around health and wellness.
Public understanding of healthy eating, exercise, and mental health has boomed in the last few years in China. The pandemic accelerated this trend, but it’s also a result of the broader expansion of China’s middle class. According to a recent report from McKinsey, no country adds as many households to the middle-class each year as China does. And by 2025, an additional 50 million households will join the upper-middle class, bringing the total to 200 million. With rising incomes, Chinese people have become aware about the importance of healthy living in line with the broader global wellness movement. Rising incomes have also made consumers more willing and able to invest in products and services that promote a healthy lifestyle.
For example, participation in exercise classes and recreational sports—including niche sports such as ultimate frisbee, American football, and even ice hockey—is surging. As a result, it’s been boom times in China for athletic wear and sports equipment brands. And with more people committed to fitness, sports nutrition has become one of the fastest growing sub-categories of the supplements market.
But that’s just one example—and the nutraceuticals market is not just benefiting from increased rates of exercise.
As UNPA’s Asia region president Daniel Mabey has noted, Chinese people have historically turned to herbs and botanicals for healing and wellness, which provides a robust foundation for modern nutraceuticals consumption. The deeply-rooted cultural perception of eating for health is linked to Traditional Chinese Medicine and has ingrained the idea among Chinese consumers that taking vitamins and other supplements is one of the best methods to promote health.
A recent study from iiMedia Research asked Chinese people their top three methods for promoting their health. The top two methods identified by respondents were eating healthy (identified by 57.8% of respondents) and dietary supplements (48.6%). Exercise ranked third at 35.3%, and sleep fourth with 26.9%.
This cultural perception of food and supplements as closely linked to health is underpinning the growth in demand for nutraceuticals.
This demand cuts across demographic lines. Elderly consumers are increasingly turning to nutraceuticals for nutritional supplementation, disease prevention, mobility support, and improved sleep. Meanwhile, younger consumers use supplements to promote physical fitness, mental health, and to adhere to strict beauty standards.
Bolstered by higher incomes and an intensified focus on healthy living, Chinese consumers are increasingly buying nutraceuticals for a wide range of desired health benefits. With the aging population projected to rise even further in the coming decades, and with young consumers becoming more health-conscious, the potential for further growth is immense.
However, the data shows that Chinese consumers still have an overwhelmingly strong preference for overseas brands in categories where health or safety are top considerations—which is why imported nutraceutical products hold a dominant position in the market. When it comes to promoting health, consumers are willing to dish out for premium imported products backed by more established brands, which consumers tend to believe offer enhanced functionality and performance.
That said, overseas nutraceutical brands cannot come to China and expect immediate success. First, the market is highly competitive, and consumers might not be familiar with your brand. Second, brands often fail to leverage data to understand the proper product-market fit.
What we are constantly telling brands—not only in the nutraceuticals sector—is that your hero product in your home market might not be your hero product in China. Put simply, Chinese and American consumer preferences are different.
For example, according to WPIC analysis, chondroitin supplements are one of the highest performing supplement sub-categories on Tmall, with sales exceeding USD $120 million in the last 12 months.
These products are also consumed in the West—but they wouldn’t rank as a top-10 subcategory on Amazon. Supplements with chondroitin and glucosamine have become household staples in China and rank as among the top-selling individual American nutraceutical SKUs in the market.
That’s in part because Chinese elderly people pursue very active lifestyles. If you’ve ever taken a walk through a Chinese city square or park in the evening, you’ll see crowds of older men and women dancing, practicing tai chi, or doing calisthenics workouts. So as awareness around supplements has increased, supplements that promote mobility are in high demand among elderly consumers.
Meanwhile, another hugely popular subcategory in China is glutathione. Marketed as an antioxidant in North America, in China glutathione is marketed for its skin lightening properties. In China and East Asia more broadly, there is a long-held beauty standard that prefers fair skin.
Younger consumers in particular are motivated to consume nutraceuticals for benefits to their appearance, making glutathione a top seller in China.
To succeed in China, brands need to leverage market data to identify overlaps between their product offering and Chinese consumer preferences. Then, they need to execute marketing campaigns that reach the right potential customers using the selling points that resonate.
But before that, how do nutraceutical brands even activate a sales presence in China?
China’s “Blue Hat” registration system for health foods and nutritional supplements can involve a lengthy, multi-year approval process. WPIC handles Blue Hat registration for brand partners, but the advent of cross-border e-commerce is a game-changer because it allows brands to reach China’s vast consumer base directly without going through the Blue Hat process.
Leading Chinese e-commerce platforms like Alibaba, JD.com, and Douyin have invested heavily in building cross-border e-commerce marketplaces that make it easier than ever for consumers to directly import products from overseas brands.
Whereas offline retail still dominates in Western markets, consumers in China have fully embraced e-commerce, with online channels contributing more than half of all retail sales. The natural products industry is particularly suitable for e-commerce due to average price points, average order values, and product size.
Meanwhile, central and local government bodies have promoted cross-border e-commerce by allowing for bonded warehouses in free-trade zones (FTZs). WPIC maintains FTZ warehouses where our brand partners store their inventory. Since these are on Chinese territory, products can be shipped to consumers immediately. However, from the perspective of Chinese customs authorities, products are counted as “imported” only after each individual purchase.
To set up a cross-border store, working with a local trade partner is imperative. Such partners come equipped with existing relationships with major platform companies and extensive store management experience, ensuring a smoother transition for foreign brands into the Chinese online space. Using a distributor detached from the brand’s essence or mission can be detrimental. The ideal partner would be one that understands the brand ethos and possesses the relevant data and insights to optimize the brand’s presence in the Chinese market.
A winning entry strategy goes beyond just listing products on an e-commerce platform. Common pitfalls include poor channel positioning, offering a misaligned product assortment, or setting incorrect price points. Aligning with a partner equipped with data analytics capability is essential. Such collaborations allow brands to discern optimal channels, identify the right product SKUs, and set competitive pricing, tailored specifically for the Chinese consumer.
That’s where WPIC differentiates itself, as our solution set encompasses e-store activation and management, market intelligence reporting, marketing, live streaming, compliance, logistics, merchandising, and more. In short, we take care of everything a consumer brand needs to establish and run a profitable China e-commerce business.
In conclusion, as China’s appetite for nutraceuticals continues to grow, the tools and strategies for market entry have evolved. Cross-border e-commerce, combined with strategic partnerships and data-driven insights, is the present and future of nutraceutical trade in China. Brands that can harness these channels efficiently will undoubtedly find themselves well-positioned in one of the world’s most lucrative markets.
About the Author: Jacob Cooke is the Co-Founder and CEO of WPIC Marketing + Technologies, a leading e-commerce and technology consultancy that drives growth for global brands in China, Japan, and Southeast Asia. As CEO, Cooke is the driving force behind WPIC’s world-class data tools, e-commerce services, and artificial intelligence technology. For more information: www.wpic.co; info@wpic.co; +1-844-430-7486.
With China’s burgeoning middle class and an intensified focus on health and wellness among Chinese consumers, the market presents vast opportunities for American nutraceutical companies.
However, the Chinese market is also incredibly complex and competitive—so American nutraceutical brands need to be equipped with the right tools and strategies to capitalize on this unparalleled growth opportunity.
As an end-to-end e-commerce service provider in the Asia-Pacific region, WPIC Marketing + Technologies manages the Chinese e-commerce operations for several leading global nutraceutical brands. Over the past year, WPIC has also partnered with the United Natural Products Alliance (UNPA) to increase exports of U.S.-made dietary supplements to China. UNPA brings decades-long expertise in the industry as well as its Market Development Cooperator Program with the U.S. Commerce Department’s International Trade Administration.
Here are some of the primary insights we’ve gathered about the China nutraceuticals market, drawn from our experience running brands in the market, our in-house data sciences team, and our collaboration with UNPA.
The Health and Wellness Boom
The data on Chinese demand for imported nutraceutical products speaks for itself.According to WPIC’s data sciences team, sales of overseas supplements on Alibaba’s Tmall Global platform amounted to USD $2.8 billion from September 2021 to August 2022, representing a 13% increase from the year prior. From September 2022 to August 2023, sales grew 27% to hit USD $3.5 billion.
Tmall Global is China’s largest cross-border e-commerce marketplace, and over half of Chinese nutraceutical purchases occur online, making this data a good barometer for the state of the overall market.
In short, it’s a market that is both massive and rapidly growing.
Several socio-economic and cultural factors are underpinning the growth of nutraceuticals in China, starting with the surge in awareness around health and wellness.
Public understanding of healthy eating, exercise, and mental health has boomed in the last few years in China. The pandemic accelerated this trend, but it’s also a result of the broader expansion of China’s middle class. According to a recent report from McKinsey, no country adds as many households to the middle-class each year as China does. And by 2025, an additional 50 million households will join the upper-middle class, bringing the total to 200 million. With rising incomes, Chinese people have become aware about the importance of healthy living in line with the broader global wellness movement. Rising incomes have also made consumers more willing and able to invest in products and services that promote a healthy lifestyle.
For example, participation in exercise classes and recreational sports—including niche sports such as ultimate frisbee, American football, and even ice hockey—is surging. As a result, it’s been boom times in China for athletic wear and sports equipment brands. And with more people committed to fitness, sports nutrition has become one of the fastest growing sub-categories of the supplements market.
But that’s just one example—and the nutraceuticals market is not just benefiting from increased rates of exercise.
As UNPA’s Asia region president Daniel Mabey has noted, Chinese people have historically turned to herbs and botanicals for healing and wellness, which provides a robust foundation for modern nutraceuticals consumption. The deeply-rooted cultural perception of eating for health is linked to Traditional Chinese Medicine and has ingrained the idea among Chinese consumers that taking vitamins and other supplements is one of the best methods to promote health.
A recent study from iiMedia Research asked Chinese people their top three methods for promoting their health. The top two methods identified by respondents were eating healthy (identified by 57.8% of respondents) and dietary supplements (48.6%). Exercise ranked third at 35.3%, and sleep fourth with 26.9%.
This cultural perception of food and supplements as closely linked to health is underpinning the growth in demand for nutraceuticals.
This demand cuts across demographic lines. Elderly consumers are increasingly turning to nutraceuticals for nutritional supplementation, disease prevention, mobility support, and improved sleep. Meanwhile, younger consumers use supplements to promote physical fitness, mental health, and to adhere to strict beauty standards.
Bolstered by higher incomes and an intensified focus on healthy living, Chinese consumers are increasingly buying nutraceuticals for a wide range of desired health benefits. With the aging population projected to rise even further in the coming decades, and with young consumers becoming more health-conscious, the potential for further growth is immense.
Understanding Chinese Consumer Preferences
In the last five years, China’s consumer landscape has been shaken up by the rise of strong domestic brands in categories like apparel and fast-moving consumer goods.However, the data shows that Chinese consumers still have an overwhelmingly strong preference for overseas brands in categories where health or safety are top considerations—which is why imported nutraceutical products hold a dominant position in the market. When it comes to promoting health, consumers are willing to dish out for premium imported products backed by more established brands, which consumers tend to believe offer enhanced functionality and performance.
That said, overseas nutraceutical brands cannot come to China and expect immediate success. First, the market is highly competitive, and consumers might not be familiar with your brand. Second, brands often fail to leverage data to understand the proper product-market fit.
What we are constantly telling brands—not only in the nutraceuticals sector—is that your hero product in your home market might not be your hero product in China. Put simply, Chinese and American consumer preferences are different.
For example, according to WPIC analysis, chondroitin supplements are one of the highest performing supplement sub-categories on Tmall, with sales exceeding USD $120 million in the last 12 months.
These products are also consumed in the West—but they wouldn’t rank as a top-10 subcategory on Amazon. Supplements with chondroitin and glucosamine have become household staples in China and rank as among the top-selling individual American nutraceutical SKUs in the market.
That’s in part because Chinese elderly people pursue very active lifestyles. If you’ve ever taken a walk through a Chinese city square or park in the evening, you’ll see crowds of older men and women dancing, practicing tai chi, or doing calisthenics workouts. So as awareness around supplements has increased, supplements that promote mobility are in high demand among elderly consumers.
Meanwhile, another hugely popular subcategory in China is glutathione. Marketed as an antioxidant in North America, in China glutathione is marketed for its skin lightening properties. In China and East Asia more broadly, there is a long-held beauty standard that prefers fair skin.
Younger consumers in particular are motivated to consume nutraceuticals for benefits to their appearance, making glutathione a top seller in China.
To succeed in China, brands need to leverage market data to identify overlaps between their product offering and Chinese consumer preferences. Then, they need to execute marketing campaigns that reach the right potential customers using the selling points that resonate.
But before that, how do nutraceutical brands even activate a sales presence in China?
A Go-To-Market Roadmap
Navigating the intricate world of China’s nutraceutical market is not just about understanding demand—it’s about mastering the mechanics of entry and engagement. The rise of cross-border e-commerce has paved a new path for foreign brands to break into the Chinese market without the need for traditional brick-and-mortar establishments or complex regulatory approvals.China’s “Blue Hat” registration system for health foods and nutritional supplements can involve a lengthy, multi-year approval process. WPIC handles Blue Hat registration for brand partners, but the advent of cross-border e-commerce is a game-changer because it allows brands to reach China’s vast consumer base directly without going through the Blue Hat process.
Leading Chinese e-commerce platforms like Alibaba, JD.com, and Douyin have invested heavily in building cross-border e-commerce marketplaces that make it easier than ever for consumers to directly import products from overseas brands.
Whereas offline retail still dominates in Western markets, consumers in China have fully embraced e-commerce, with online channels contributing more than half of all retail sales. The natural products industry is particularly suitable for e-commerce due to average price points, average order values, and product size.
Meanwhile, central and local government bodies have promoted cross-border e-commerce by allowing for bonded warehouses in free-trade zones (FTZs). WPIC maintains FTZ warehouses where our brand partners store their inventory. Since these are on Chinese territory, products can be shipped to consumers immediately. However, from the perspective of Chinese customs authorities, products are counted as “imported” only after each individual purchase.
To set up a cross-border store, working with a local trade partner is imperative. Such partners come equipped with existing relationships with major platform companies and extensive store management experience, ensuring a smoother transition for foreign brands into the Chinese online space. Using a distributor detached from the brand’s essence or mission can be detrimental. The ideal partner would be one that understands the brand ethos and possesses the relevant data and insights to optimize the brand’s presence in the Chinese market.
A winning entry strategy goes beyond just listing products on an e-commerce platform. Common pitfalls include poor channel positioning, offering a misaligned product assortment, or setting incorrect price points. Aligning with a partner equipped with data analytics capability is essential. Such collaborations allow brands to discern optimal channels, identify the right product SKUs, and set competitive pricing, tailored specifically for the Chinese consumer.
That’s where WPIC differentiates itself, as our solution set encompasses e-store activation and management, market intelligence reporting, marketing, live streaming, compliance, logistics, merchandising, and more. In short, we take care of everything a consumer brand needs to establish and run a profitable China e-commerce business.
In conclusion, as China’s appetite for nutraceuticals continues to grow, the tools and strategies for market entry have evolved. Cross-border e-commerce, combined with strategic partnerships and data-driven insights, is the present and future of nutraceutical trade in China. Brands that can harness these channels efficiently will undoubtedly find themselves well-positioned in one of the world’s most lucrative markets.
About the Author: Jacob Cooke is the Co-Founder and CEO of WPIC Marketing + Technologies, a leading e-commerce and technology consultancy that drives growth for global brands in China, Japan, and Southeast Asia. As CEO, Cooke is the driving force behind WPIC’s world-class data tools, e-commerce services, and artificial intelligence technology. For more information: www.wpic.co; info@wpic.co; +1-844-430-7486.
