On August 21, 2023, the National Health Commission (NHC) unveiled the "2022 Report on Health Literacy Among Chinese Residents", which investigated the health literacy level of Chinese residents, i.e., the proportion of individuals with basic health literacy among the total population. This comprehensive study covered 336 counties (districts) and 1,008 townships (neighborhood) across 31 provinces (including autonomous regions and municipalities directly under the central government) on the mainland, targeting permanent residents aged 15 to 69. The findings revealed that in 2022, the health literacy level of Chinese residents reached 27.78%, indicating a notable increase of 2.38 percentage points compared to the previous year.1 Since 2012, NHC has continuously organized nationwide dynamic monitoring of residents' health literacy level, during which the results have experienced a steady rise from 8.80% in 2012 to 27.78% in 2022. The results underscore the ongoing trend of heightened health awareness among Chinese residents.
The report indicates that urban residents have a higher level of health literacy than rural residents; the eastern region surpasses the central region, and the central region's level is higher than that of the western region. Specifically, urban residents achieve a health literacy level of 31.94%, while rural residents attain 23.78%, representing 1.24 and 1.76 percentage points increases, respectively, compared to the data of 2021. By region, the health literacy levels are 31.88% in Eastern China, 26.70% in the central, and 22.56% in the western region, showing respective increases of 1.48, 2.87, and 3.14 percentage points compared to 2021.
Driven by the growing awareness of health and well-being, China's health functional food market is undergoing steady expansion. According to Euromonitor, the market size was 328.9 billion yuan in 2021, and projected to reach 436.6 billion yuan by 2026, with a compound annual growth rate (CAGR) of 5.8% from 2022 to 2026. Currently, popular health functional foods in the Chinese market primarily target at immunity enhancement, vitamin supplementation, fatigue reduction, and calcium supplementation. As the consumer demographic gradually expand from the middle-aged and elderly population to cover the younger generation who increasingly recognize the importance of maintaining good health, higher adoption rates can be expected across all age groups. This shift of consumer landscape also presents opportunities for new market segments, including sports nutrition, weight management, oral beauty supplements, snack-based nutritional products, etc.
Regarding distribution channels, health functional foods are sold through e-commerce platforms, direct sales, pharmacies, and offline retail channels such as supermarkets and mother-and-baby stores. Notably, the e-commerce channel has witnessed rapid growth and emerged as the dominant channel for health functional food sales. This can be attributed to its convenience, competitive pricing, and extensive product variety. Take the mainstream Ali platforms for instance, data from DataInsider reveals that from June 2022 to May 2023, the GMV for nutritional supplements on Ali platforms reached an impressive 37 billion yuan.
Additionally, financial data released by Chinese nutritional health enterprises also provide a comprehensive understanding of the thriving health functional food industry. Taking By-health Corporation and H&H Group as examples, their performance in H1 2023 is noteworthy. By-health achieved a revenue of 5.60 billion yuan for the first six months of this year, marking a 32.58% increase over the same period last year. Net profit reached 1.55 billion yuan, showing an impressive growth of 47.41% year on year (YoY). 2 The enterprise' flagship brand "By-health" gained a revenue of 3.28 billion yuan, a notable YoY growth of 39.11%. H&H Group reported a revenue of 6.98 billion yuan, in which the adult nutrition and care sector grew by 43.2% YoY and emerged as the largest contributor to the group's expansion. Within the adult nutrition and care sector, the flagship brand "Swisse" flourished with a 55.9% YoY growth in the Chinese market.3 Notably, since its acquisition by H&H Group in 2015, Swisse's sales have tripled, solidifying its leading position in the Chinese vitamin, herbal, and mineral supplements market.
In the future, with Chinese consumers placing growing emphasis on their health and well-being, their substantial demand will further drive the flourishing growth of the health functional food industry in China.
**Disclaimer: All images used in this article are from the internet.
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