HNC 2017: Overview of China’s health care industry 06-12-2017

The Healthplex Expo 2017 – Natural & Nutraceutical Products China is going to be held on June 20 to 22 in Shanghai. The exhibition is one of the most important health care industry event in the Asia Pacific region, amassing professionals from all over the world in the health food, traditional Chinese medicine, beauty products, and health care products industries.


 


The annual conducted exhibition has a scope of about 15,000 square meters with more than 430 exhibitors from over 20 countries worldwide. In 2016, more than 16,500 visitors have attended the exhibition from about 60 countries. According to the organisers, the most overseas visitors are coming from America, followed by Korea and Japan.  


The largest industry segment in the exhibition is traditionally the nutrition and dietary supplement sector, with functional health food as well as natural and organic products also getting a good share.  


According to industry experts, the sales of health food in China will reach USD47.5 billion by 2019. The market of health products consumption will even rise to USD60.3 billion and the total GDP of health industry might reach USD1.3 trillion by 2020. China will hereby become the largest health food market in the world.  


The new regulation on health food in China was implemented on July 1, 2016, which enables a much easier way to produce health products within the content of raw materials going on the market. The new regulation will certainly attract more international nutraceutical enterprises.  


Many international nutraceutical companies regard China as their growth engine and keep investing in the Chinese market in recent years. The value of imported medicine and health food increased to USD46.2 billion in 2015. USA, Germany and Japan were the top 3 export markets of health food ingredients.  


Main barrier for international companies

According to the deputy director of the China Chamber of Commerce for Import and Export of Medicines & Health Products, the main barrier for overseas companies to do business in China’s healthcare market is little knowledge about regulations, standards, market needs and customer behaviour.  


CCM, a market intelligence firm of China’s healthcare and pharmaceuticals market, gives some insights into China’s industry to prepare attendees for the Healthplex Expo 2017. To meet CCM and its parent company Kcomber at the exhibition, please send a meeting request to econtact@cnchemicals.com.  


Overview of China’s health care industry

China’s health care industry is witnessing a growth since the 1980s, mainly driven by the overall economic growth and people’s improving living standards. Those have increased the awareness for better health care, which as a result drives the demand for products in this sector.  


From 2010 to 2014, China’s health care industry was rising steadily at a CAGR of about 41.6%. According to CCM, there will be a growing market potential due to three motivating factors.  


In China, a country where traditional Chinese medicine is competing against western pharmaceutical products, the self-health care is growing in popularity. The modern lifestyle of more Chinese people is increasing the needs for fast solutions for pressure of job and life. Healthcare products will play in important role in the stress release treatment. Second, China’s economic development will expand the application group. The still strong growing economy in China is enabling more people to afford health care products. Finally, China’s aging society is getting much more serious in the near future, with around 170 million estimated elders beyond 65 by the year of 2020. As the growth of elder people is outgrowing the one of health care products, this may offer a market gap for companies to invest in.  


However, the challenge of China’s health care industry is the poor-quality administration with a growing number of players entering the market. For example, in 2015, there have been more than 15,500 certificates for domestic healthcare food as well as 764 certificates for imported healthcare food.  


In recent years, several Chinese pharmaceutical enterprises have extended into new areas of business, such as Jiangzhong Pharmaceutical Co., Ltd., Guangzhou Pharmaceuticals Corporation, Tasly. Phar. International Co., Ltd., and Reckitt Benckiser Group PLC. For them, healthcare food and drinks are the two most common choices. For instance, around 22 leading pharmaceutical companies have set foot in the beverage market, according to CCM’s research.  


Huge potential of these two markets is the main factor attracting enterprises towards them. The market value of healthcare beverage market has reached nearly USD1.46 billion to the beginning of 2017, and keeps growing by about 20%-30% every year. Conversely, decrease has been seen in profitability of pharmaceutical manufacturing, as related policies have become increasingly stringent worldwidewide. In this context, producers are inclined to invest in the highly profitable FMCG and healthcare markets, rather than the time and money-consuming R&D of innovative pharmaceuticals.


In the coming 5 years, China’s healthcare and nutrition industry is very likely to continue expanding. The main reasons can be found in an aging population in China, incentive policies and the growing wealth of a more demanding middle class in the country. At the same time, due to the policies of China’s government, the industrial structure and consumption structure are also enhancing. What’s more, the new registration system will benefit the healthy development of the industry. However, China will also have higher requirements for nutrition and health products, since environmental standards are getting stricter and consumers are paying much more attention to high quality products in a healthy lifestyle.  


Regulations

A new system of dual regulation has been introduced to the domestic health food market in 2016. The documentation mechanism is a particular highlight of these reforms. After receiving dossiers from applicants, the food and drug administrative departments make a record of those which immediately meet requirements, issue documentation certificates for them and make documentation publicly available on official websites. The new registration procedure is also simpler than previous ones, and therefore saves enterprises time.  


The former registration system was time-consuming and expensive, heavily burdening enterprises. However, the new system is quicker and more economical. For instance, the review period for some health foods has been shortened from 3-5 years to 3 months; the average cost of applying for a Health Food Approval Certificate is also falling by several times.  


The implementation of favourable policies, such as this one, may persuade some pharmaceutical enterprises to enter the health food industry, which could lead to more intense market competition. With this in mind, enterprises should focus on fundamental research and scientific innovation.  


Recently, On 28 April 2017, the General Office of the China Food and Drug Administration released the On Requesting Public Comment on Further Strengthening Supervision over Healthcare Food. It is mainly about administrations over labels and advertisements. Besides, most healthcare producers can directly report to the relevant departments for record with complicated approval procedures no longer needed.


The report covers the functions of further define the definition of healthcare product, strict administration over the label and advertisement, Catalog of Raw Material for Healthcare, standardise the approval process, and optimise procedures and simplify requirements.      


About CCM

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets.   


Do you want to find out more about the healthcare market in China? Try our Newsletters and Industrial Reports or join our professional online platform today and get insights in Reports, Newsletter, and Market Data at one place. 

For more trade information of pharmaceutical products, including Import and Export analysis as well as Manufacturer to Buyer Tracking, contact our experts in trade analysis to get your answers today.   


Meet Kcomber at the exhibition on June 20 – 22. Please contact econtact@cnchemicals.com for making an appointment.  

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