How does Australian health products launch into China’s market

By Jane Li(Target China)
01 May 2017

China’s health care product’s market is still positioning in the early stage of growth phase, demand has not been fully met and with the development of digital communication, overseas health care product enterprises receives more opportunities for development in China.

In recent years, health issues have become one of the most significant livelihood issues of Chinese society. Due to the negative effects from government’s long-term population control policy, China’s ageing population is deepening. According to the research from Target China, the number of elderly people aged 60 and above in China calculated to 8.2% of the total population in 2004 and has risen 15.5% in 2014 with the increase of nearly 60 million aged population. This developed the popular topics relevant to aged population’s health issue across social media. At the same time, environmental pollution is also one of the reasons why Chinese population obtained further attention in health topics. The sudden haze pollution in 2013 made people become deeply aware of the danger of environmental pollution. Although the Chinese government has embarked on a number of remedial actions on this air pollution issue, but did not completely win the trust of the community. In addition, the increase of pressure from young people in China and a large number of sudden death cases lead to the population began to pay further attention to young people’s health problems.

Under this large background, Chinese people had to change their traditional concept of consumption. More and more Chinese consumers begin to advocate to a healthy lifestyle and the quality of life requirement rapidly improves, this lead to the constant increase of demand of health care products. However, Chinese community has lost its complete trust in China’s health care products and this is caused by three main reasons: First of all, the domestic health products are only targeted on elderly population and can not meet the demand for other age populations. Followed by unscrupulous businesses who focuses on the attraction of consumer and hype false advertising also exaggerate the results of products, this lead to people having negative emotions towards domestic health care products. Finally, the domestic health care product’s market develops over speed however results in the incomplete of the regulatory system, supervision of relevant departments unable to meet the expectation, resulting in a number of unscrupulous businesses blatantly sells poor quality and even harmful products causing further negativity in domestic health care industries.

The poor performance of China’s health care products provided great development opportunities for overseas health care industries including Blackmore and Swiss who established cooperation with Chinese industries hoping to expand further in China’s health care product’s market. In 2015, overseas health care products presented great and positive hit to China’s market. Among with this, NBTY in the finance year turned from negative income to rapid profits with a net profit that reached 269%. Blackmores in the second half of the year increased the sales to 73%, reaching an amount of $237,600,000 and obtained China communities like and wants. Due to this great increase of sale the company even hired the sporting celebrity Lee Na as their representative of their brand’s image.
Although overseas health care products received the positive welcome from the Chinese community, the unsuccessful of import approval are very high – health care product conventional import procedures are very complicated and lengthy. Usually, in order to collect the approval from relevant departments of China, overseas health care brands will need to defray a fee ranged $50,000-$200,000 in average for each product and the approval time takes up to 1-2 years. If the brand does not own the approval from the department of China, products will not be able to enter pharmacy or direct marketing as well as other channels. Therefore, in contemporary times the majority of overseas health care brands uses the method of Daigou(second person purchase), cross-border e – commerces or declare the products as food to enter Chinese markets. E-commerce is a form of overseas sale. It uses a form of self-purchase and mailing to import the products. This meets the standard of the monitor of food or drug from the country of origin as well as decreased the barrier of overseas brand entering China’s market. According to Target China’s investigation, 18% of China’s consumer purchases online at an average of everyday and this takes up 40% of the young population. Cross-border e-commerce and overseas Taobao is an essential part from daily life of the majority of consumers and overseas health care products are one of the significant components of overseas Taobao.

Apart from the consumption channels, brand promotion is also one of the issue that overseas healthcare brands need to face. Different to China’s local companies, overseas enterprises have huge barriers toward Chinese culture and Chinese market’s cognition. Many overseas companies insist on applying the Western marketing strategy towards Chinese market, ignoring the characteristics of Chinese markets and results in failing. Germany’s famous electronic device brand ‘Siemens’ released the Xelibri series of mobile phones in 2003. However, Siemens’s promotion team did not considerate Chinese market’s characteristics, instead directly developed market location and promotion strategies focusing on the situation of Germany’s market. This lead to the decline of the product and eventually came to a cessation of production in 2004. It is surely irrational to blindly arbitrate promotion activities in Chinese market unless there are specific and high understanding of China’s culture and market environment. Regarding to most of overseas enterprises, support from an intermediary agency such as Target China that obtains strong Chinese background will be a wise choice.

Overall, due to the issue of aging of the population, environmental pollution, over the stress of work and other factors of the society lead to the demand of health care products for China’s population. China’s huge potential spending power is the the targeted object all overseas enterprises covets, but it is surely difficult to take place in China’s market. The deep understanding of Chinese culture and market as well as the promotion method meeting China’s national condition is what needs to be obtained in order to reach success. Target China is Chinese market’s marketing profession and can provide you with China’s latest market information, promotion method as well as National policies. We are highly experienced in developing cross-border business solutions and increasing brand visibility. Since 2012, we have a consistent record of helping clients achieve their goals and promote their business to the public. Our creative strategies are well designed basing on data-driven research and our unique resources including China celebrities, local distributors and our wholly owned social media channels. If you are interesting in China market, please contact us!