An increasingly health-conscious China still has an appetite for foreign vitamin and supplements brands, despite growing domestic competition. RedFern Digital spoke to Benji Lamb from British supplement brand Vitabiotics about how British brands can tailor their offering to maximise success in China
Benji Lamb is the director of China and South Asia at Vitabiotics, the UK’s number one vitamin and supplements brand. China is one of Vitabiotics’ top three markets globally, and they sell around 50 of their 450 sub-brands in Asia. Lamb leads the company’s growth in China, focusing on e-commerce, wholesale, marketing, brand exposure and localised appeal.
How would you characterise China’s health supplements and vitamins market today?
When it comes to characterising China’s health supplements market, key features include speed of market pace, speed of consumption, and speed of growth, all of which make it a very dynamic market that requires constant learning and constant adjustments to marketing strategy.
If overseas brands are able to enter the market and get it right in terms of localising their products and retaining their foreign identity while still being highly relevant to Chinese consumers, then they can perform extremely well. We are a 50-year-old business that sells products across multiple categories including mother and baby, healthcare, and beauty, and we employ hybrid branding that combines our British identity with an aesthetic that appeals to Chinese consumers.
Chinese consumers are also generally very savvy when it comes to researching formula, dosage, and ingredients, and will frequently compare different overseas and domestic brands to find the product that best fits their lifestyle.
What has been the impact of Covid-19 on this market?
Covid-19 accelerated the already growing market and led to more savvy consumers. I would also say that there is a rising demand for domestic brands. However, there is still the argument that supplements is strongly supported as a cross-border industry, since Chinese consumers have a lot of trust in overseas formulas for products they ingest, especially from established overseas brands. Since Vitabiotics has been selling supplements for 50 years and has that strong heritage, we are a little more sheltered from the rise in domestic brands.
The sector is becoming more and more competitive, and overseas brands need to up their game. Brands cannot expect Chinese consumers to buy their products simply because they are foreign. Instead, they need to ask themselves how they can resonate with Chinese consumers, develop proper localisation strategies for branding and different product formats, and understand what tones to use in their marketing.
Covid-19 has also caused an acceleration in social media plans. Brands need to be on media channels such as Douyin, Weibo, WeChat, Kuaishou and Xiaohongshu. Brands also need to have appropriate video assets for the China market, as video is currently huge. Most of the offsite display ads that we’re doing for Tmall are in video.
Although Covid-19 has strained the supply for us and many other brands in the sector, maintaining supply in China is essential because it is a decade long investment market. When it comes to repeat retention products, like vitamins and supplements, it’s about the cumulative effects. Therefore, not being able to put the product into the hands of Chinese consumers would affect long-term strategy and cause consumers to switch to other brands, especially as domestic brands continue to grow in popularity.
Homepage of the Vitabiotics store on Tmall Global, with an ongoing live stream featuring its Pregnacare range
Have you seen a difference in how domestic and foreign brands approach the markets in China?
There are certain limitations that overseas brands have if they are selling through cross-border e-commerce and do not have full domestic registrations, such as limitations on claims that can be made in terms of product function, use and health efficacy. As domestic brands do not have these restrictions, there is a difference in the scope of marketing that can be done.
What are some key differences between the vitamins and health supplements industry in China compared to that of other countries, such as the UK?
China is a very digitally-led market, which for vitamins and supplements can include online pharmacies, e-commerce platforms and cross-border platforms. In contrast, the UK still places a greater emphasis on offline retail and doctor’s recommendations. In China, physical retail presence is still important, but for many brands, it just isn’t feasible for market entry due to the complexities of registration and the investments required.
Compared to our initially offline strategy in the UK, in China, Vitabiotics launched through cross-border e-commerce, and have the long-term goal of launching offline after a few years.
Are there specific Chinese consumer demographics that are driving sales and growth in the vitamins and supplements sector?
Consumer demographics are hugely dependent on category, formula and specific vitamin products. However, as a whole, the supplements and vitamins sector in China is heavily focused on prevention rather than cure. Chinese consumers tend to begin taking supplements at a younger age compared to overseas customers, which makes Gen-Z and millennial consumers important demographics.
One of our sub-brands focused on eye care and lutein-based products, Visionace, is an example of this. In the UK, we primarily sell Visionace to consumers that are over 50 years old, whereas in China, our main consumers are among millennials or younger.
Are there any ingredients, product formats, or product functions that are trending among Chinese consumers?
One would be prune juice in the mother & baby category, which is seeing huge growth and is now a trending pregnancy product. Brands that are looking at new product development can use e-commerce tools to look at what keywords are trending, and what keywords consumers are searching. There is a lot of insight to be had when it comes to what consumers are actively searching for, both in terms of ingredients and product functions. This is one of the reasons we ended up selling a lutein-based eye care product because lutein search volumes were high. Other keywords that have been strong in search include iron, folic acid and calcium liquid.
There is a lot of insight to be had when it comes to what consumers are actively searching for, both in terms of ingredients and product functions. This is one of the reasons we ended up selling a lutein-based eye care product because lutein search volumes were high
Gummies as a product format are becoming increasingly popular, along with soft-capsule products, although I’d still say that tablets remain the definitive form of health supplements for vitamins. My opinion on gummies is that they resemble sweets quite heavily, so are very separate from the more serious pharma and nutraceutical products. If your doctor prescribes you something, it’s usually in the form of a pill that is ingested, so I think there is a fundamental association between healthcare and capsules.
What has the significance of social commerce in the vitamins and health supplements sector been?
Social commerce is quite a unique phenomenon to China. For example, the key opinion consumer (KOC) community don’t necessarily sell products directly, but they share product reviews through their networks. One platform for this type of social commerce is Xiaohongshu, which allows for the seeding of products and building up of brand ranking and indexing through hashtags, notes and images of the product and brand.
KOCs can drive engagement by generating their own content that includes recommendations for other users. These recommendations are not coming from the brand or from an obviously paid KOL or live streamer, and so are more trusted and can be very powerful for promoting the product to the masses. Social commerce is incredibly important for us and for many other brands.
What should new entrants to the market be aware of or take into consideration when entering the China market?
It is important to consider the minimum threshold of investment that is required and to understand that a brand will not necessarily have a guaranteed ROI. Brands need to be ready to invest a significant amount over the first 12-18 months of market entry, while knowing that at this stage, the return on investment is not guaranteed and no brand equity has yet been built in China. However, the vitamin and health supplements sector is still separated into small niches that can be highly profitable, so I certainly believe that most brands will find ROI in China, among their target demographics.
Another important aspect to consider is finding partnerships with the right trade partners (TPs) and wholesale distributors. Brands need to be cautious about what their long-term strategy is when signing contracts and what they are prepared to give away in the early stages of market entry – for example, we didn’t give away any exclusivity in China.
There are so many different models to choose from, and no clear right or wrong method. Instead, brands should think about where they want to be because they should only enter China if they are aware of their long-term plan after 10-15 years. Building up sales and brand equity in China takes time.
Prior to entry, brands also need to understand the eco-system and educate themselves on how different the channels are and know which channels are the most appropriate at each point in the China journey.
A version of this article first appeared in China market-focused magazine, The RED Edition – Special Issue 2021, published by RedFern Digital
