Text by: Viktor Grande Røssnes, based on a report from the Norwegian Consulate General in Shanghai.
A fast-growing market for health food has developed in China. This market is expected to reach USD 70 billion within 2020, triple the 2010 value. This market represents huge opportunities for Norwegian companies within cod fish oil, mineral and vitamin supplements, and other health food!
The air and water pollution problems in China are known worldwide however, other health problems have recently led to increased health awareness among the Chinese population. Diabetes, cancer and other chronic illnesses are on the rise, life threatening food scandals have shocked the Chinese population and as a result people are growing to be more health conscious.
More health issues
Globalization has left its mark on the Chinese diet where a more Western diet, with its processed meat products, added sugar and refined carbohydrates, has become more common. High stress due to family obligations (women in the one child policy generation may have to take care of up to four parents), long working hours and other work-related sources of stress, have had a further negative effect on the health of the Chinese population. These two effects can help explain the rise of new health issues in China. One example of this is the high amount of diabetics in China, which recently surpassed 100 million.
The concern for such health problems has created an increased interest in exercise, diets and vitamin, mineral and supplements (VMS) products among the relatively wealthy Chinese middle class, a group that is growing rapidly. This has led to a high demand for products such as organic food and VMS. According to a recent survey, 74% of the Chinese respondents said they were willing to spend more money on healthy products, which was 12% above the global average.
Increasing knowledge about health foods
The Chinese market for supplements accounts for over USD 13 billion, with an expected annual growth of 13% per cent until 2020. This is largely due to campaigns raising awareness of the benefits of health foods and marketing efforts towards strategic consumer groups. After these campaigns many consumers have come to believe in the benefits of VMS products. These products were previously often given as gifts to others, but now consumers also buy them for their own health benefits. Despite this growing trend, there is still some skepticism towards health food products. Many consumers are still unsure about the true benefits and if the products are in fact are real. Some also fear side effects and choose to take half the recommended dose of VMS products.
Nonetheless, consumers tend to have confidence in the brands that are well-known and have built trust with Chinese consumers over time. Another characteristic is that consumers tend to trust brands that are specialized in one specific type of health product. A product that has done particularly well is PepsiCo’s cereal Quaker that customized one of their cereals for the Chinese market. By mixing red dates, wolf berry (goji berry) and white mushroom, all of which are believed to be healthy according to traditional Chinese medicine, their cereal became a best seller in the Chinese market.
There are possibilities for Norwegian producers in this market. Norwegian fish is already popular in China, so this could be a potentially large new market for companies selling health food stemming from fish, such as cod oil. For Norwegian companies with competence in preventing the diseases that are on the rise in China, this can open new possibilities as well.
One example of an established, successful Norwegian company selling to Chinese citizens is Norwegian Pharma which just won the Gazelle prize in Rogaland. The company sells to Chinese tourists in Norway and a Chinese distributor accounts for 75% of their NOK 11 million income. Their advantage has been their Chinese distributor, which reduces the need for in-depth knowledge about the Chinese market.
Read more here (only available in Norwegian).
For more information please contact our office In Shanghai:
Alex Jian Wu
Innovation Norway, China
T: +86 1085319670
Ji Wu Zhang
Innovation Norway, China
T: +86 1085319652