INSIGHTS
Probiotics Increases Presence in China’s Consumer Goods Market
BY Shine HuSep 24, 2021
Adding probiotics as nutritional additives into ordinary food to echo consumers’ health needs is what more brands are doing.
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The Chinese probiotics market is booming.

According to Euromonitor, the global probiotics industry has reached nearly 222.5 billion yuan1 and is still growing. The Asia-Pacific region delivers impressive performance, accounting for 47% of the global consumption scale.

In China, the market size of probiotics increased from 48.6 billion yuan in 2015 to about 85 billion yuan in 2020, with a compound growth rate of 11.83%2. The performance proved that China had already become the third largest probiotics consumption country after the U.S. and Italy in 2017.

More brands use probiotics as the key feature.

Data from China Health Care Association show that 78% of probiotics are used in the dairy industry, which is the best carrier of probiotics. The Report on Consumption Cognition of Probiotics in China (2020) also indicates that fermented dairy products are consumer-preferred probiotics products.

The COVID-19 pandemic has deepened people’s awareness of probiotics’ role in immunity enhancement, fueling the development and application of probiotics. Probiotics have become active in various categories. Many brands leverage the “probiotics+” concept to appeal to consumers and boost sales.

Dairy

In China's probiotics-oriented dairy market, the most recognized is undoubtedly Yakult. Since it entered China in 2002, its proportion of sales has grown to nearly 60%, with daily deals reaching 7.5 million bottles in 2019. China accounts for almost 20% of Yakult's global market share3.

Domestic dairy brands have also made efforts to roll out yogurt and room temperature lactobacillus drinks, highlighting probiotics content or probiotics-fortified function.

For example, Chinese yogurt brand Classy Kiss launched Enjoy One Hour After Meal (餐后一小时) probiotics yogurt, with each bottle containing 10 billion active probiotics bifidobacterium C-I. It focuses on supporting consumers’ gastrointestinal health after the meal. Another Chinese yogurt brand Simple Love also launched probiotics yogurt Body Knows (身体知道), featuring LGG+GOS formula, supporting intestinal health.

dingtalk-20210917170923.jpgSimple Love’s probiotics yogurt Body Knows.

Many players have emerged in the normal temperature lactobacillus drink sector, represented by Yili’s Changyi 100% and Mengniu’s YouyiC. According to Euromonitor1, during the past five years from 2015 to 2019, the market size of normal temperature lactobacillus drinks increased from 7.72 billion yuan to 14.88 billion yuan, with a compound growth rate of 17.8%.

Snack and beverage

Adding probiotics as nutritional additives into ordinary food to echo consumers’ health needs is what more brands are doing at present. They use probiotic-added” as the selling point to make their chips, cereal, gummies, nuts, sparkling water, and other products sound healthier.

For example, adding probiotics to kids' gummies, yogurt melts, and freeze-dried yogurt cubes has become a prominent trend. On Tmall, the best-selling children’s probiotics snacks are:

  • Deer Blue: yogurt melts, highlighting adding 20 million active probiotics with prebiotics FOS.

  • Be&Cheery: freeze-dried yogurt cubes, highlighting adding over 1 million active probiotics.

  • Biobor: probiotics gummies, emphasizing every 225 grams of gummy contains 5 billion CFU active probiotics.

dingtalk-20210922135321.jpgBiobor’s probiotics gummies

The primary claim of adding active probiotics and prebiotics is to protect baby's sensitive intestines and stomach, and promote nutrition absorption.

Besides children’s snacks, ChemLinked have seen many new probiotic-added food and beverage popping up in the Chinese market since the COVID-19 outbreak. On Tmall, the best-selling probiotics snacks are:

  • Lyfen: probiotics dried mango, emphasizing every 100 grams contains 8 billion CFU active probiotics.

  • Three Squirrels: probiotics nuts, claiming every 100 grams contains 10 billion CFU active probiotics.

  • MUSCLETECH: probiotics whey protein bar, highlighting adding three kinds of probiotics to ensure intestine health.

dingtalk-20210922142216.jpgLyfen’s probiotics dried mango

Probiotics are also increasingly introduced to the beverage sector, such as the peach probiotics latte launched by COSTA this March, using two patented probiotics strains from Fonterra NZMP.

Functional food

Improving digestion and boosting immunity are two of the best-known functions of probiotics. According to the Probiotics Insight for Gut Health published by Ipsos, regulating the balance of gut flora, maintaining gut health, improving immunity, and addressing indigestion are the main purposes for consumers to take probiotics.

With the deepening of research on probiotics and intestinal mechanisms, more probiotic-added products with segmented functions have hit the market. Probiotics have played an increasingly vital role in emotional adjustment, female intimate health, oral care, edible beauty, weight management, and other health issues.

Probiotic-added functional food is also developed towards more "lazy forms" such as ready-to-eat powder, chewable tablets, and pressed candy, which are more convenient for fast-paced urban people and convenience-pursuing young people.

For example, Chinese functional food brand Smeal has launched ready-to-eat probiotics powder featuring "melting in your mouth in three seconds." The ready-to-eat probiotics powder has a gut health line and a women's private health line.

dingtalk-20210923103540.jpgSmeal’s ready-to-eat probiotics powder

Another functional brand Wonderlab rolled out cranberry probiotics for women earlier this year, focusing on female private parts care.  

Toothpaste, facial mask, skincare

According to Hexa Research2, the global probiotics cosmetics market was valued at $21 million in 2017 and is projected to grow at a compound growth rate of 8% and exceed $26.3 million by 2025.

In 2020, Yakult officially introduced its cosmetics into Tmall Global, opening "Yakult Overseas Flagship Store." The store's brands include LACTDEW S.E., REVECY WHITE, PARABIO AC, IKITEL, etc., covering cream, serum, facemask, face cleanser, and some other categories.

Chinese brand Dr.Alva is also a micro-ecological skincare brand, with probiotics balancing emulsion and toner, as well as probiotics repairing facial masks as the ace products.

dingtalk-20210922154439.jpgDr.Alva’s probiotics balancing emulsion and toner

Apart from skincare, probiotics are increasingly used in the oral care sector to restore the oral microecological balance

Chinese brands AvecMoi and NYSCPS have delivered remarkable sales performance in oral care sector on Tmall, mainly supported by products such as probiotics toothpaste and mouthwash.

dingtalk-20210922155012.jpgAvecMoi’s probiotics toothpaste

Brands should avoid counterproductive advertising.

Although consumers have a good perception of probiotics and show preference for probiotic-added products, brands should avoid exaggerated or false advertising, which would trigger counterproductive results.

Recently, Shanghai Yakult Dairy Co., LTD., an affiliate of Yakult, has been fined 450,000 yuan for promoting the "important role of probiotics in the prevention and treatment of COVID-19 virus." Yakult lactic acid bacteria beverage is not a registered health food in China, which means it is not allowed to claim any medical effect, and of course including the preventive effect on COVID-19 virus. Therefore, Yakult is suspected of misleading and cheating consumers, which violates relevant laws and regulations.

During this incident, the topic “Yakult was fined for misleading advertising” landed on the Weibo hot search list, which irritated consumers and significantly tarnished the brand image. For Yakult, losing its position in the consumers’ heart is more frightening than the 450,000 yuan fine.

Shine Hu
ChemLinked Research Analyst
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