Practical Guide to China’s Nutrition and Supplements Market

China’s nutrition and supplements market is experiencing record growth thanks to rising health awareness and increasing disposable income among Chinese consumers, writes Kristina Koehler-Coluccia, Head of Business Advisory for Woodburn Accountants & Advisors

China is facing problems, such as an ageing society, social stress, environmental problems – including air and water pollution – and the end of the Zero-Covid policy. To prevent and shield themselves from the consequences of these problems, Chinese people of all generations are turning to health supplements.

The health supplement market has only started to grow in recent years, making it one of the sectors with the greatest potential for domestic and foreign brands. According to a report issued by the consulting firm Roland Berger, China may soon overtake the United States as the most significant nutritional supplement market in the world. The market is expected to reach US$ 40 billion by 2023, growing at a CAGR of 14%.

Consumers in China tend to trust traditional Chinese medicines and prefer natural dietary supplements. However, they are becoming more interested in Western health supplements and are educating themselves on the subject. There are many different products available on the market in this category, ranging from Chinese traditional medicine and vitamins to minerals, herbal products and functional foods.

What are the most popular supplement categories in China?

Since the Covid-19 pandemic, and especially in the post-pandemic era, Chinese consumers have shown increased health awareness, which has fuelled the consumption of consumer healthcare products such as vitamins and food supplements, with a preference for imported brands.

According to a survey done by Statista in 2020, most of the people (77%) that consume dietary supplements do it to strengthen and improve their immune systems. This is especially important in the post-pandemic era, as people are more aware of the risk of getting sick from Covid or another virus. 

Older adults are the demographic known to be most at risk of developing serious health complications from Covid-19. This is creating an opportunity for supplements that address the health needs of older adults, including ensuring that micronutrient needs are met for optimal health and immune support.

Figures from e-commerce platforms in China show that older customers are interested in multi-vitamins, calcium, iron and zinc. Meanwhile, nutrients such as coenzyme Q10, which plays an antioxidant role in the cardiovascular system, are in-demand for “precise nutrition” among the middle-aged and elderly.

Weight loss supplements are also catching up with immunity-focused supplements in China. New vitamin and supplement products with slimming claims rose from 3.9% in 2020 to 10.3% in 2021, while those making immune system claims dropped from 9.2% to 2.2%. This shift was pushed by a higher incidence of obesity among Chinese people, especially after several long Covid lockdowns.

Another significant reason for ingesting health supplements is to cope with stress and improve sleep. Many young people in China stay at work late, six days a week, and they are notoriously stressed, which causes problems such as insomnia. Integrated nutrition, melatonin and anti-fatigue products that reduce stress, boost energy, and improve sleep quality are the products that these customers are most interested in.

Improving skin, hair and nails is another major reason for taking food supplements, with beauty enthusiasts paying more attention to the “beauty from within” concept. Nearly 70% of beauty enthusiasts are female, and they are concerned about issues such as weight control, skincare and preventing hair loss. The Chinese Women Consumption Report 2022, released by JD.com in March 2023, showed that purchases by female users of astaxanthin and collagen, which benefit the skin and have antioxidant properties, grew by 63% and 49% year-on-year in 2022, respectively.

Finally, even pet owners can be a target for nutritional supplements. Affluent pet owners in first and second-tier cities are more than willing to invest in their furry family member’s health. Cat owners prefer vitamin supplements and intestinal health for their pets, while dog owners prefer bone and joint health and oral health. Adding a supplement has become the new refined feeding trend, and it is driving growth in the online pet health and nutrition market too.

An advert for 618 deals on British nutraceutical company Vitabiotics’ Tmall Global store

What formats of supplements are popular in China and where do people buy them?

A 2021 change in China’s supplement regulations led to rapid growth in alternative supplement formats. While tablets remain the top format, new formats have replaced capsules and powders, formerly the second and third most common in new product launches.

Chews and gummies jumped from 2.6% of the supplement market in 2020 to 17.6% in 2021. The “other” category, which includes cake, seed, jelly and candy formats, rose from 2.6% to 12.5%. More enjoyable formats like these can help fight pill fatigue and increase compliance.

Due to the increasingly fast pace of life, young people pursuing optimal nutrition and health prefer convenient products. Packaging convenience has been improved to support the daily habit of taking nutritional supplements, and convenient and small bags have become hot search keywords. Easy-to-carry products resolve customers’ pain points in diverse scenarios, including going to the office, on vacation, on business trips and at the gym.

On JD.com, sales of portable sports protein powder and spoon honey surged by 68% and 1,095% year-on-year, respectively. Sales of mini tablets are growing the fastest, and sales of oral liquids are doubling.

Consumers are also less likely to forget to take the product, be confused about how much to take each time, or suffer the burden of carrying the entire bottle or box of supplements.

One of the most important trends reshaping China’s supplement market is e-commerce. The three major companies that gained market share between 2019 and 2020 – By-Health, H&H and Dong-E-E-Jiao – all shared an expansion in e-commerce that allowed consumers to purchase their products even during lockdowns.

According to NutraIngredient- Asia, food supplements also have a record high in sales in terms of GMV (Gross Merchandise Volume) among all imported goods on Tmall. Although experts say that Tmall’s Singles’ Day has reached its peak in terms of sales, health supplements performed very well in the most recent Singles’ Day sales. In November 2022, the total health supplements products sales grew to RMB 4.78 billion from RMB 4.52 billion in 2021, with the average transaction price rising to RMB 340 from RMB 308.

What do British companies need to know before entering the nutrition and supplements market in China?

Although there are many interesting opportunities for foreign brands in the health supplement market in China, there are several aspects to consider and know before entering the segment.

In China, the regulation of nutrition and dietary supplements is governed by the State Administration for Market Regulation (SAMR) and the National Health Commission (NHC). All supplements sold in China must be tested and approved by the State Food and Drug Administration (SFDA). The government also continues to strengthen and update its regulations to ensure that the dietary supplement market is regulated and operates effectively.

The nutritional supplement market is classified by ingredients and end-users. Ingredients are further sub-classified into vitamins, proteins, amino acids, enzymes and botanical supplements. End-users are classified into infants and adults. 

Due to the relatively recent growth history of the healthcare product industry, consumers have limited brand awareness, and the choice of channels for healthcare companies has become the core of corporate competition.

Chinese customers are very tech-oriented and tend to do extensive product research online. This is why it is important to focus on branding and your online reputation to gain consumers’ trust.

The first step is to develop a Chinese website hosted in China, where consumers can read about the company and its brands, access information about all the brands, and find links to social media accounts. Having a website also requires good Baidu SEO to increase visibility in this popular search engine.

Baidu works like Google. E-reputation is important in China, and Baidu can help you get it. In general, Chinese consumers don’t trust unknown brands and prefer products with a good reputation that are perceived as premium and reliable. This makes e-commerce and community word-of-mouth recommendations essential for nutrition supplement sales. You can participate in online forums like Zhihu or Baidu Tieba to make your name known and to start conversations around your brand. This will also increase your SEO score.

Similarly, social media can help you gain the trust of your audience in China. For example, social media is responsible for popularising nutraceuticals among younger people. Not long ago, nutraceuticals were the choice of middle-aged and elderly people. However, they have gained significant popularity thanks to the conversations among younger consumers on social media.

Different social media platforms can serve different purposes. WeChat is an all-in-one platform where you can send newsletters, sell through private traffic or own your store within the platform. Weibo will help you reach people of all age groups, while Xiaohongshu and Douyin will help you address young Chinese women and men looking for vitamin supplements recommended by their favourite KOLs and live-streaming videos.

For example, Chinese company By-Health created the “By-Health Nutrition Academy” official account on WeChat and invited more than 200 nutritionists and more than 100 experts in medicine and nutrition to share knowledge and reply to followers’ questions about health. This increased brand awareness and promoted the reliability of its products among Chinese target markets.

By-Health has also been active in engaging its audience through community management. The company offers money to its followers in the form of a weekend bonus, and as a result, it has attracted the attention of additional users that now follow the brand and know its products.

In conclusion, the demand for nutraceutical products is growing rapidly in China, causing changes in the industry. Consumers are becoming more mature, and traditional distribution channels are changing, creating new opportunities for British brands.