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Health Supplements - China - December 2020

OVERVIEW
What you need to know
Key issues covered in this Report
Report scope
Excluded
Subgroup definition
Figure 1: Definition of low/mid/high MHI groups, by monthly household income and city tier
EXECUTIVE SUMMARY
The market
Increasing health awareness and investment drives market growth
Figure 2: Retail value sales forecast of the health supplement market (RMB bn), China, 2020-25
Future outlook considering the impact of COVID-19
Figure 3: Short- medium- and long-term impact of COVID-19 on health supplement market, China, December 2020
Companies and brands
A long tail of others emerge due to entry of CPG brands and products using cutting-edge formulae
Figure 4: Market share of leading companies in health supplement market, China, 2018-19
Investing in better transparency, targeting health-conscious experience seekers, and balancing mouthfeel and effectiveness
The consumer
Rising usage for self-consumption
Figure 5: Usage of health supplements, August 2020
Immunity playing a leading role, and specific functional options worthy of attention
Figure 6: Reasons for using health supplements, China, August 2020
Oral liquid receives overall great feedback in terms of format preferences
Figure 7: Preference in format, China, August 2020
Demand for food-based formats that contain well-known edible beauty ingredients
Figure 8: Awareness of edible beauty ingredients, China, August 2020
The gap between offline and online channels narrows
Figure 9: Purchasing channels, China, 2020 vs 2018
Young consumers show stronger belief in the effectiveness of boiled TCM
Figure 10: Attitude towards TCM, China, August 2020
Personalised supplements are welcomed by food-format seekers
Figure 11: Attitude towards personalised supplements, China, August 2020
Beauty supplements are evolving towards being an overall health improvement tool
Figure 12: Attitude towards beauty supplements, China, August 2020
What we think
ISSUES AND INSIGHTS
Marketing TCM supplements to young consumers
The facts
The implications
Figure 13: Examples of manufactures that leverage their TCM ingredients’ transparency, China, 2019-20
Figure 14: Examples of brands that balance taste, effectiveness and interactivity in products using TCM ingredients, China, 2019-20
Adopting the edible beauty supplement trend in different ways
The facts
The implications
Figure 15: Examples of skincare brands expanding their product offerings to include beauty supplements, Global, 2017-19
Figure 16: Examples of products leveraging the concept of “collagen booster”, Global, 2020
Figure 17: Examples of food-based edible beauty products, China and Overseas, 2018-20
Using shot formats to convey effectiveness and better mouthfeel
The facts
The implications
Figure 18: Examples of health supplements in drinking formats, Global, 2019
THE MARKET – WHAT YOU NEED TO KNOW
Increasing health awareness and investments drive market growth
Faster product registration for health food using special ingredients
New e-commerce law creates market challenges for cross-border sales channels
Future outlook considering the impact of COVID-19
MARKET SIZE AND FORECAST
Increasing health awareness and investments drives market growth
Figure 19: Retail value sales forecast of the health supplement market (RMB bn), China, 2020-25
Future outlook considering the impact of COVID-19
Figure 20: Short- medium- and long-term impact of COVID-19 on health supplement market, China, December 2020
MARKET FACTORS
What’s driving
Growth of healthcare expenditure exceeds total consumer expenditure
Growing demand from younger generations and less affluent consumers
Faster product registration for health food using special ingredients 
Entry of big CPG manufacturers will drive health supplement product awareness
What’s challenging
New e-commerce law creates market challenges for cross-border supplement brands
Tightening regulations for offline drugstore channels
MARKET SEGMENTATION
Dietary supplements gaining share
Figure 21: Retail value sales share of health supplements, by market segments, China, 2015-20 (est)
Vitamins
Figure 22: Retail value sales forecast of vitamin segment (RMB bn), China, 2020-25
Minerals
Figure 23: Retail value sales forecast of mineral segment (RMB bn), China, 2020-25
Dietary supplements
Figure 24: Retail value sales forecast of dietary supplement segment (RMB bn), China, 2020-25
KEY PLAYERS – WHAT YOU NEED TO KNOW
A long tail of others emerge due to entry of big CPG brands
Direct selling companies building on better transparency
Engaging with younger consumers
Targeting sub-health issues
Balancing better mouthfeel and effectiveness in supplement formats
Personalised supplements appeal
MARKET SHARE
Who’s doing well?
By-Health doing well by building brand awareness
Brands using emerging ingredients and traditional CPG brands enter the game, giving rise to a long tail of others
Figure 25: Health supplement products developed by Yili and Wonderlab, China, 2019-20
Who’s struggling?
Direct selling and Dong-E-E-Jiao are losing share
Figure 26: Market share of leading companies in health supplement market, China, 2018-19
COMPETITIVE STRATEGIES
Direct selling companies building better transparency
Figure 27: Infinitus and Amway promoting transparent production processes, China, 2020
Engaging with younger consumers
Figure 28: Examples of product innovations and marketing activities targeting younger consumers, China, 2020
Targeting sub-health issues
Figure 29: Supplement brands that leverage precise marketing, China, 2019-20
By-Health: turning health experts into KOLs
TRENDS AND INNOVATIONS
Immunity worthy of attention
Figure 30: Examples of Immunity claimed supplements featuring both Western and botanical/fermented ingredients, China and Overseas, 2019
Address specific functional needs
Figure 31: Examples of supplement products targeting stress relieving, eyesight improvement and weight management, Global, 2020
Balancing better mouthfeel and effectiveness in supplement formats
Figure 32: Examples of supplement products that highlight both good mouthfeel and effectiveness, Global, 2020
New methods of TCM consumption by leveraging on-the-go and better mouthfeel
Figure 33: Infinitus’s Yang Gu Jian branded TCM supplements, China, 2020
Beauty supplements tailoring to specific ages
Figure 34: Fancl’s supplements for men and women tailored to their age, Japan, 2020
Personalised supplements appeal
Figure 35: Examples of supplement products blending with personal health tests, China and Overseas, 2020
THE CONSUMER – WHAT YOU NEED TO KNOW
Rising usage for self-consumption
Huge gaps between functions sought after and related new product launches
Oral liquid receives great feedback in terms of format preferences
Embracing a combination of Western and Chinese ingredients to improve beauty
The gap between offline and online channels narrows
Younger people have stronger belief in boiled TCM
Personalised supplements are more welcomed by food format enthusiasts
USAGE OF HEALTH SUPPLEMENTS
Self-consumption dominates
Figure 36: Usage of health supplements, August 2020
Females are key demographic for supplements
Figure 37: Self-usage of select supplements, by gender and age, August 2020
Consumers aged 18-24 are catching up in self-consumption of selected health supplements
Figure 38: Self-usage of select supplements, by age, China, August 2020
Vitamins and dietary supplements for tier one while minerals for lower tier city consumers with children
Figure 39: Usage of select supplements amongst children, China, August 2020
REASONS FOR USING HEALTH SUPPLEMENTS
Immunity improvement and dietary complement purposes stand out
Figure 40: Reasons for using health supplements, China, August 2020
Gaps between new product launches and perceived reasons for using supplements
Figure 41: Gaps between health supplement launches with selected functions and consumers’ reasons for using supplements, China, 2020
Not just for consumers of high income
Figure 42: Reasons for using select health supplements, by monthly household income, China, August 2020
Multivitamins are multi-functional while single vitamins and Western dietary supplements for specific needs
Figure 43: Self-usage of select supplements, by select reasons for using health supplements, China, August 2020
PREFERENCE IN FORMAT
Oral liquid receives great feedback in terms of format preferences
Figure 44: Preference in format, China, August 2020
Unprocessed medicinal materials and granule formats may fit special usage occasions
Figure 45: Product format innovations targeting weight management and eye health, China and Germany, 2020
Females and males have distinct preferences in formats (gummies and shots)
Figure 46: Preference on gummy and shot formats, by gender, China, August 2020
AWARENESS OF EDIBLE BEAUTY INGREDIENTS
Embracing a combination of Western and Chinese ingredients
Figure 47: Awareness of edible beauty ingredients, China, August 2020
Females are well-rounded and males are specific
Figure 48: Awareness of select edible beauty ingredients, by gender, China, August 2020
Young consumers aged 18-29 embrace melatonin and grape seeds’ effectiveness
A desire for food-based beauty supplements using widely-known beauty ingredients
Figure 49: Attitudes towards food format health supplements, by select awareness of edible beauty ingredients, China, August 2020
PURCHASING CHANNELS
The gap between offline and online channels narrows
Figure 50: Purchasing channels, China, 2020 vs 2018
Consumers going for omnichannel services
Figure 51: Select purchasing channels, by age, China, August 2020
Multiple channels to purchase direct selling branded products are desired
Figure 52: Select purchasing channels, by consumers who have bought health supplements from direct selling, China, August 2020
Different purchasing channels for distinct product types
Figure 53: Self-usage of select supplements, by select purchasing channels, China, August 2020
Supermarkets of imported products and direct selling appeal to high earners
Figure 54: Select purchasing channels, by monthly household income, China, August 2020
ATTITUDES TOWARDS HEALTH SUPPLEMENTS
Young consumers aged 18-29 show stronger belief in the effectiveness of boiled TCM
Figure 55: Attitude towards TCM, China, August 2020
Figure 56: Attitude towards TCM, by age, China, August 2020
Personalised supplements are more welcomed by “food therapy” enthusiasts
Figure 57: Attitude towards personalised supplements, China, August 2020
Figure 58: Attitude towards personalised supplements, by attitude towards supplements made into food formats, China, August 2020
Although beauty supplements are welcomed at all life stages, males have slight concerns
Figure 59: Attitude towards beauty supplements, China, August 2020
Figure 60: Attitudes towards beauty supplements, China, by gender, August 2020
MEET THE MINTROPOLITANS
Craving more personalised supplements
Figure 61: Attitude towards personalised supplements, by consumer classification, China, August 2020
Seeking better offline store experience when it comes to retailer choices
Figure 62: Purchasing channels, by consumer classification, China, August 2020
APPENDIX – MARKET SIZE AND FORECAST
Figure 63: Retail value sales of the baby nutrition market (RMB bn), China, 2015-25
APPENDIX – METHODOLOGY AND ABBREVIATIONS
Methodology
Abbreviations

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