According to the Statistical Bulletin on the Development of Civil Affairs in 2023, as of the end of 2023, the population of elderly people aged 60 and above in China will be close to 300 million, accounting for 21.1% of the total population. According to international standards, Chinese society has entered a stage of moderate aging. The deepening of aging population and the improvement of health awareness have become important factors in the rise of the health product market. Especially with the sinking and popularization of e-commerce channels, purchasing health products has become more convenient. While nurturing opportunities, the industry also harbors many consumer traps.

Starting from multiple dimensions such as overall market size, category track, channel distribution, and consumer attributes, the New Beijing News reporter presents the current development status of the domestic health product industry from different perspectives, insights into consumer trends, and faces the opportunities and crises of the health product industry.

The health products referred to in this article include health foods, functional foods, nourishing foods, and other products related to health and wellness.

Due to multiple factors, the health product market continues to expand

With the improvement of people's health awareness, the demand for health products is becoming increasingly evident, and correspondingly, the market size is also increasing. Especially after the 2018 Quanjian incident, the supervision of the domestic health product market has become stricter, showing a positive development trend. Based on comprehensive data from multiple sources, the market size of health products in China has exceeded 200 billion yuan. According to data released by the Huajing Industry Research Institute, the size of China's health product market has grown from about 100 billion yuan in 2013 to over 300 billion yuan in 2023 (expected). Among them, the size of the health food market has maintained a steady growth trend in recent years, increasing from 174 billion yuan in 2019 to 215.92 billion yuan in 2023, and is expected to grow to about 230.82 billion yuan in 2024. According to other data, the size of China's health product market has maintained steady growth in the past five years, and is expected to reach 423.7 billion yuan by 2027.

The increase in market size cannot be achieved without policy support. In October 2016, the Central Committee of the Communist Party of China and the State Council issued the "Healthy China 2030" Planning Outline, proposing to actively promote the integration of health and pension, tourism, the Internet, fitness and leisure, and food, and promote the birth of new health industries, new formats, and new models; In June 2017, the General Office of the State Council issued the "National Nutrition Plan (2017-2030)", proposing to develop the food nutrition and health industry, focusing on developing new types of nutrition and health foods such as health foods, nutrition fortified foods, and dual protein foods according to the health needs of different groups of people; In August 2022, the National Health Commission released the "14th Five Year Plan for Food Safety Standards and Monitoring Evaluation", which clarifies that the goal of the "14th Five Year Plan" period will be to improve the research and development capabilities of nutrition and health products, analyze the special nutritional needs of different populations, promote targeted innovation in food research and development, and continuously enhance the health connotation of products.

The growth of per capita disposable income is also an important factor in the continuous expansion of the health product market. According to the data of the National Bureau of Statistics, in 2023, China's per capita health care consumption expenditure will be 2460 yuan, an increase of 16.0% over the previous year, accounting for 9.2% of the consumption expenditure. In recent years, residents' expenditure on healthcare has maintained a double-digit growth rate, higher than the growth rate of per capita consumption expenditure and sub categories such as food, tobacco, and alcohol in the country. In the first half of 2024, China's per capita health care consumption expenditure will be 1271 yuan, an increase of 4.2% year on year, and its proportion in per capita consumption expenditure will continue to grow, reaching 9.3%. This also indicates from another perspective that the demand for health consumption among residents is being released.

Based on Tmall Health data, in the past three years, Guangdong, Zhejiang, Jiangsu, Shandong, and Shanghai have become the top 5 regions for domestic consumption of health products, which is basically close to the ranking of regional GDP. Taking 2023 as an example, Guangdong, Jiangsu, Shandong, and Zhejiang ranked in the top four, while Shanghai ranked 10th.

The largest number of health product related enterprises in Shandong Province

According to data from Tianyancha Professional Edition, there are currently over 8.208 million health product related enterprises in operation and in existence in China. Since 2024, there have been over 1.837 million newly registered related enterprises. From the perspective of the annual number of newly added enterprises, starting from 2019, it has shown a trend of increasing year by year in the past five years. The number of newly added related enterprises each year is more than 467000, 638000, 773000, 978000, and 1.584 million respectively. In 2023, the number of newly added related enterprises has exceeded the one million mark.

In terms of regional distribution, Shandong Province, Guangdong Province, and Hunan Province have the highest number of health product related enterprises, with over 897000, 707000, and 609000 respectively.

The booming industry has driven investment and financing in the health product market. According to the Nutrition and Health Think Tank, in the first half of 2024, there were a total of 15 financing transactions in the field of nutrition and health food, with a total amount of approximately 410 million yuan, a significant increase compared to the same period last year. Except for the 5 financing cases with undisclosed amounts, there are 4 financing cases with a scale of several hundred million yuan. From the perspective of financing rounds, angel round (angel+round) and A round (A+round) financing account for a large proportion, reaching 9 rounds.

More than half of elderly consumers consume health products

From the perspective of age distribution, the consumer group of health products shows a relatively concentrated characteristic, with the younger generation such as the "silver haired generation" and "post-90s and post-00s" becoming the main consumers of health products.

According to a survey released by the China Health Association, the annual sales of health products in China reach billions, with elderly consumers accounting for over 50% of the total. The degree of aging in our country is still deepening. According to the "2023 Statistical Bulletin on the Development of Civil Affairs" released in September 2024, as of the end of 2023, the number of elderly people aged 60 and above in China has approached 300 million, accounting for 21.1% of the total population. According to international standards, Chinese society has entered a stage of moderate aging. According to the National Health Commission, it is estimated that by around 2035, the population of elderly people aged 60 and above in China will exceed 400 million, accounting for over 30%, and China will enter a stage of severe aging. In January 2024, the General Office of the State Council issued the "Opinions on Developing the Silver Hair Economy and Improving the Welfare of the Elderly", proposing to strengthen innovation in elderly products and encourage the research and development of health foods and special medical formula foods suitable for the chewing, swallowing, and nutritional requirements of the elderly.

The emergence of problems such as staying up late, high stress, and poor sleep, as well as the improvement of health awareness, have also made young people born in the 1990s and 2000s an important group of consumers of health products. Taking Tmall Health's 2023 data as an example, the post-90s generation bought 30% of coenzyme Q10 and 45% of liver protection tablets. Among them, 15% of liver protection tablets are sold in the early morning hours; In 2023, the consumption of blood glucose monitoring products among the post-05 generation will increase by 85%, and the consumption of uric acid monitoring products among the post-90s generation will increase by 255%; Post-95s have purchased three types of health products per person, with 30% of their money spent on improving their immunity.

Children are also an important group of consumers of health products, but their orders mostly appear in mothers' shopping carts. According to Tmall Health data, in the past three years, the consumption of children's nutrition products has grown by over 100%, becoming the fastest-growing sub category in the health product market; The number of consumers in the two groups of children and silver haired individuals has reached 500 million.

More people are consuming through e-commerce channels

In recent years, especially after the 2018 Quanjian incident, the consumption channels of health products have changed, and the proportion of direct sales market has gradually declined. Overall, pharmacies, shopping malls, and online platforms (e-commerce) are currently the mainstream channels for purchasing health products, especially e-commerce channels. With diverse product categories and convenient and fast purchasing experiences, their market share in the health product market is gradually increasing. It can be foreseen that with the increasing awareness of health among the younger generation and other factors, there is still room for growth in the market share of e-commerce channels.

A random sampling questionnaire survey conducted from July 2021 to July 2022 on a total of 1007 elderly people in three cities in China showed that in the process of healthcare consumption, the elderly have a relatively high degree of autonomy. 71.5% of the elderly can make healthcare consumption on their own, while the rest are determined by their spouse or children whether to make healthcare consumption. When purchasing health products or services, pharmacies are the most favored purchasing channel for the elderly (72.3%), followed by hospital pharmacies (37.1%) and shopping malls (12.7%). These three purchasing channels have relatively high safety and reliability. However, the proportion of purchases made through channels such as WeChat business, sales personnel promotion, and health product company lectures is very low, totaling about 11%.

Overall, e-commerce has become the primary consumer channel for health products. Data shows that in 2022, the proportion of e-commerce, direct sales, pharmacy, and supermarket channels will be 46%, 26%, 20%, and 9% respectively. By 2023, the sales proportion of e-commerce channels will also increase from 14.4% in 2013 to 56%, replacing direct sales and becoming the largest consumer channel for health products. In terms of vitamins and dietary supplements, which occupy the largest market share in domestic health products, the sales share of online channels is expected to account for 56%, direct sales channels will account for 20.8%, pharmacies will account for 16.4%, supermarkets will account for 1.4%, and other channels will account for 5.4% in 2023. The market share of direct sales channels is expected to continue to decline. According to the retail market data of Zhongkang CMH, the overall growth rate of dietary supplements in Chinese pharmacies in 2023 is -5.4%.

Traditional pharmaceutical enterprises found the second growth curve of brands through the Internet platform, and completed the digital transformation of enterprises in the process. According to data provided by Tmall Health, the annual turnover of health products under multiple local brands on Tmall has exceeded 500 million yuan. Since the comprehensive launch of cross-border e-commerce service pilot work in 2012, foreign health products can be sold to domestic consumers without registration or filing with the National Medical Products Administration, and the entry threshold has been significantly reduced. Overseas brands such as Swisse, Blackmores, Nature Made, etc. have entered the domestic market through e-commerce. Since 2024, the consumption of health products through online channels has maintained a growth rate of over 20%.

The demand for hair loss prevention and vision protection is emerging

In the entire health product market, vitamins and dietary supplements can account for about half of the market share in the domestic health product industry. According to Euromonitor data, the total retail scale of China's vitamin and dietary supplement industry will reach 225.3 billion yuan in 2023, an increase of about 11.6% compared to the previous year, with an average annual compound growth rate of 9.45% from 2009 to 2023. In 2023, the per capita consumption of vitamins and dietary supplements in China will be 23.3 US dollars, a year-on-year increase of 11.5%. The per capita consumption is slightly higher than the global average, and consumers mainly rely on daily needs to enhance immunity.

However, diversified health and wellness needs have given rise to an increasing number of new consumers, and the health product market also has more and more segmented tracks. In addition to traditional vitamins and dietary supplements, the demand for hair loss prevention and vision protection has begun to emerge. According to the research data from the "Young People's Health Consumption Trend Report" by the First Financial Business Data Center, more than half of the post-90s generation in China suffer from hair loss, hair loss, and weakened vision; About 40% of the post-90s generation suffer from obesity and decreased physical activity; Another 30% have experienced a decline in immunity; Frequent consumption of takeout and other food can also lead to poor gut health, and the demand for these sub-health issues is gradually transforming into the market.

According to the "Post-90s Health Report" by Sutu Research Institute, in the health market dominated by middle-aged and elderly people, the Top categories are mainly protein powder, calcium, vitamins, and intestinal cleansing products used to meet the health and wellness needs of middle-aged and elderly people; Among the most popular health care products of the post-90s, ass hide glue, medlar, health care tea, red dates, honey, etc. accounted for 55.21%. According to Tmall Health data, in 2023, health products targeting multiple organs such as liver, liver, spleen, lungs, eyes, and brain will become popular, including probiotics, lutein, protein powder, and more VC、 Creatine, fish oil, niacinamide, milk thistle, chondroitin sulfate, and melatonin have become the top ten hot search items for health products. Consumers who embody the "ingredient party" have also ushered in the era of ingredient search consumption, including peptides such as aspartic acid, glutathione, gamma aminobutyric acid, sodium hyaluronate, collagen peptides, astaxanthin EPA、PQQ， Enter the Tmall search surge chart. At the same time, young people are beginning to pursue health preservation, and the number of consumers of mugwort products after 2005 has increased by 51% in 2023. During the Double 11 period in 2024, the fields of fish oil and gastrointestinal health will enter a rapid development cycle. In 2024, Tmall's sales of healthy fish oil increased by 50% year-on-year, and joint health increased by 30% year-on-year, with liquid calcium DHA、 The sales of children's growth and development products, represented by probiotics, increased by 100% year-on-year.

In addition, with the rise of the health economy and beauty economy, young people, especially female consumers, have become loyal consumers of health and wellness products. The "2024 Women's Nutrition and Health Food 618 Consumption Insight Report" shows that in the past five years, the average annual compound growth rate of the online market for women's nutrition and health food on Taobao, Tmall, and JD platforms has reached 15.5%, with the main customer group being married and childbearing users born in the 1980s.

Consumer traps such as false advertising still exist

Although the overall market has maintained a high growth trend for many years, the consumption trap of health products still exists. False advertising, impersonation of regular food as health food or even drugs, and other behaviors are not uncommon, especially with the rise of forms such as live streaming sales, these consumer traps have also begun to shift. The "Three Products and One Equipment" (drugs, medical devices, health food, and special medical formula food) live streaming sales consumption survey report released by institutions such as the Beijing Food and Drug Safety Rule of Law Research Association in 2024 shows that the public opinion data on false advertising is as high as 30.5%, and problems such as food counterfeiting as health products or illegal promotion of drug efficacy are quite common.

In 2023, the State Administration for Market Regulation investigated and dealt with 47600 cases of false and illegal advertising, and fined 466 million yuan. In order to further regulate the advertising market order in the fields of healthcare, pharmaceuticals, food, and other livelihood areas, and protect the legitimate rights and interests of consumers, the State Administration for Market Regulation organized a special action on advertising supervision in the field of livelihood nationwide from April to November 2024. The State Administration for Market Regulation stated that it will strengthen the supervision of food advertising, strictly prevent the promotion of health food efficacy and ordinary food efficacy, and investigate and punish food advertisements that claim to be inconsistent with facts or violate relevant standard requirements in accordance with the law.

【 Conclusion 】

With the improvement of people's health awareness, the health product market has also shown a continuous growth trend for many years, especially under the increasingly diverse health and wellness needs of people, which has given rise to multiple market opportunities. In addition, policy support and the convenience of consumption brought by e-commerce platforms have brought multiple benefits to the development of the health product market.

Looking ahead, with the deepening of China's aging population and the increasing awareness of disease prevention and health care among people, the health product market will undoubtedly usher in more opportunities. At the same time, with the market becoming increasingly mature and consumers forming a more scientific understanding of health products, there is still a possibility of reshuffling in the health product market. A batch of products that meet consumers' health needs and satisfy their health and wellness "pain points" will occupy the market at a faster pace.