Australia’s natural products industry is well placed to compete for emerging market opportunities in China’s fast growing wellbeing market, according to a new report from government trade body Austrade.
With consumer income increasing rapidly among China’s growing middle class, spending on health-related products is on the march. A 2016 survey of 12,430 consumers by the China Consumers’Association (CCA) found 58 per cent of interviewees reported purchasing health foods, with 14% saying they buy health foods ‘regularly’ and 48% ‘occasionally’.
The report says that the Chinese health food market – including VMS, herbal medicines, nutritional foods and traditional Chinese medicine (TCM) – is worth RMB200 billion (US$60 billion), with one forecaster (Boston Consulting Group) predicting that it will be worth RMB400 (US$60 billion) by 2020.
“The report says that the Chinese health food market is worth RMB200 billion (US$60 billion), with one forecaster (Boston Consulting Group) predicting that it will be worth RMB400 (US$60 billion) by 2020”
Austrade says there is demand for all forms of complementary medicines, including nutritional supplements, health foods with functional claims, products based on traditional Chinese medicine principles, over-the-counter medicines, food for special medical purpose and sports supplements. It identifies further are opportunities to supply herbs and raw materials to Chinese pharmaceutical companies.
Several additional factors combine to make China a promising market for Australia’s natural health products sector, says the report. China has an ageing population with rising rates of chronic disease and a “growing cohort of older consumers looking to maintain their health and independence while managing more health conditions”. Parents of young children, meanwhile, are increasingly concerned about food safety and environmental pollution, making health foods from countries with high environmental standards a popular choice among Chinese consumers.
Australia’s complementary medicines sector also stands to benefit from the elimination of tariffs of up to 10 per cent on pharmaceuticals, including vitamins and health products, under the newly implemented China-Australia Free Trade Agreement (ChAFTA).
The report notes that major Australian exporters of vitamins, minerals and supplements – Swisse and Blackmores – have seen rapid growth in sales over 2015, with online channels driving this growth.