Takehome:
Growth in China’s health food sector is increasingly being driven by younger consumers particularly the post 90s generation and female office workers. This contrasts with the historical predominance of China’s senescent population in driving growth within the sector.
The demands of health food consumers are also shifting with younger consumers placing a higher importance on the beauty promoting functionalities of health foods.
From June 19th to 21st, 2019, ‘The Tenth Healthplex Expo 2019’ was held in the National Convention and Exhibition Centre, Shanghai, China. The main topics discussed during this expo revolved around natural products, nutraceuticals and health foods.
New Concept of Yangsheng: Burn the candle on both ends and still look good doing it….
During the Expo, experts frequently talked about the emergence and contribution of trending internet content as a new driver of growth and market segmentation in the health food sector. New terms such as 996 and Punk Style Health Preservation[1] were discussed. For those of you in the dark about what these seemingly esoteric terms mean, we need to cast ourselves back some two years previous when these new ideas first took root and starting trending on Chinese social media.
The ‘996’ term was coined to describe a common phenomenon in which Chinese office workers begin work at 9am each morning and finish up each night at 9pm and follow this routine 6 days every week. The stresses associated with this highly demanding work schedule, takes a toll, often affecting employee’s mental health and sleep cycle. One of the major negative outcomes is the high prevalence of sleep related disorders in the post 90s generation, with sleep latency (time taken from head on pillow to onset of sleep) and going to bed late ranking as major sequelae of this onerous lifestyle choice.
According to data from the Chinese Medical Doctor Association (CMDA), the average sleeping time for the post-90s generation is 7.5 hours[2], and according to a sleep survey more than 60% of respondents felt tired and felt that their sleep duration and/or quality was insufficient. Furthermore, according to another 2018 sleep survey conducted on over 1,400 Chinese aged 15-35[3], staying up late at night (as defined by time to bed after 10pm) was extremely common.
Unsurprisingly the rise of the '996' lifestyle has spawned offshoot concepts like 'Punk Style' which has been gradually catching on among Chinese young people. The basic precept of the Punk Style approach to life is that the deleterious effects of staying up late can be offset by commitment to expensive skin care products (especially masks) and other healthy lifestyle habits particularly a healthy diet. Dietary supplements and health foods fit perfectly with this paradigm as they are extremely convenient and offer consumers the chance to ingest supra-physiological doses of different vitamins, minerals and nutrients which wouldn't be possible through consumption of a normal diet and would be even harder given their hectic work schedule.
Growing Market Segments: Young Females Driving Growth
In Chinese families, females are most often the decision-makers, particularly when it comes to purchases of FMCGs. Female office workers who spend a lot of their down time on the internet have ready access to information on health and wellness. According to data released by Blackmores, 28% of working women rely on eating health foods and nutrient supplements to maintain a balanced diet.
Beauty Promoting Health Foods Becoming an Increasingly Important Segment
Consumer purchasing preference is being shaped by shifting demographics in China. As previously alluded to the contribution to growth in the health food sector made by senescent population in China is slowly dying (both literally and figuratively) and its place new segments are emerging. Consumers are demanding products which can help them become or maintain their beauty. Although the senescent population was the bedrock on which the sector was founded, this historical dominance has been eroded.
Prioritization of products with health functions such as intestinal motility is being replaced by demand for functions which can improve the aesthetic appearance of the consumer or aid in weight loss, muscle growth, shiny hair and skin tone. This phenomenon is most prevalent on China’s ecommerce sector, a retail channel dominated by young Chinese people. According to a Tmall report, in 2017-2018, health food such as collagen (used to promote skin elasticity and skin beauty) and enzymes ranked among the top five in sales of health food on Tmall. To be more 'fair, thin, beautiful' is a strong motivation for young people to purchase health foods.
Possible Trends and Corresponding Strategies
Diversification of consumer demand
Young women demand health foods containing collagen, dietary fiber, oral beauty products, grape seeds. As shown in the chart below, these categories of products account for 17% of the market, and these segments have experienced year on year growth of 104%. Similarly, health food designed for teenagers and old people also have great potential.
Therefore, health food enterprises should diversify their product portfolios to meet the differentiated demands of niche market segments. The table below offers data on growth and changes in imported health food ingredients:
Evolving Retail Channels
Online drugstores are performing extremely well in China. Health food enterprises, particularly international stakeholders should understand the opportunities presented by emerging retail channels, particularly China's developed social e-commerce platforms.
Higher value of products
The 90s generation are demanding higher quality and safer products and they are willing to pay to get this. Sophia Tseng, general manager of Blackmores, suggests that health food promotion should make rational use of social media and promote brand building in a way which is much acceptable to the younger generations.
