Definition and classification
There is no global consensus on the definition of health products. However, the industry finds that Euromonitor gives a reasonable definition. According to Euromonitor, health food can be divided into four categories: Vitamins and Dietary Supplements, Herbal/Traditional Products, Sports Nutrition, and Weight Management.
In China, according to GB 16740-2014 National Food Safety Standard Health Food, health food refers to food products that claim to have specific health functions or supplement one’s vitamins or minerals. Health food is suitable for consumption by specific groups of people and has the effect of regulating human body functions but is not used for the purpose of treating diseases, which will not have any form of harm, whether it is acute, sub-acute, or chronic to human body.
Although this GB gives a clear definition of health food, Chinese consumers tend to regard some other foods not covered by this GB as health products, such as protein powder and bird nests. Therefore, health food discussed in this article is not limited to the definition given by the GB but expands to the four categories set by Euromonitor.
Total market sales and growth rate
From 2015 to 2019, the total market sales of Chinese health food showed continued growth. In 2019, the figure reached 396.5 billion yuan, but the annual growth rate dropped to 3.1% comparing to previous years. The decline in growth rate was mainly due to the outbreak of Quanjian’s pyramid scheme scandal. Quanjian was a large health food company in China, so its scandal directly contributed to stricter supervision from regulatory authorities and lower consumers’ willingness to buy consumer health food. In 2020, in addition to the aftermath of Quanjian scandal, this industry was impacted by the pandemic, thus keeping a low growth rate.
The market share of imported and domestic health food
In 2020, imported health food only accounted for 7.5% of the whole health food market, implying a large space for market players to explore. There are two reasons why the market share of overseas brands is small: first, it is not easy to file/register a health food product in China, which usually takes quite a long time and a large sum of money; second, the Chinese market has many domestic players, including those selling Chinese traditional health food, such as ejiao, Ganoderma lucidum, etc. However, overseas brands are accelerating their pace to enter the Chinese health food market. In 2020, China imported a total of 4.81 billion U.S. dollars of nutritional and health food, an increase of 23.9% year-on-year, much higher than the average growth rate of the whole market, 3.2%.