3 Trends in China’s Health and Wellness Market That British Brands Should Capitalise On
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Experts agree that China’s post-pandemic health and wellness boom is here to stay. Here are the key areas of opportunities for brands looking to move into the Chinese e-commerce market.
Forget the lipstick economy. In the wake of a global pandemic, it’s the health and wellness industries that are booming. And nowhere is this more profound than in China.
A report by Boston Consulting Group had estimated that the country’s health and wellness market was worth around $70 billion in 2020. Some experts forecast that this will rise to $145.1 billion by 2025.
There’s no Chinese word that directly translates to wellness. Instead, its consumers naturally divide the concept into physical, mental and spiritual well-being. All three are high priorities for Chinese consumers.
A recent McKinsey report surveyed respondents across six countries, including China. One of the findings was that China’s consumers reported the highest share of wellness spending online of all six countries.
So what is all that Renminbi being spent on?
China’s love affair with smartphones is well known, so it’s no surprise that not only is the vast majority of health and wellness shopping being done via mobile. And that sector itself is heavily tech-influenced, too.
Among the 802 million mobile users in China, over 104 million have at least one fitness app on their phones. Interestingly, this penetration jumps to around 20% in second-tier cities.
Other key areas of growth are health and beauty supplements, physical exercise and sports gear, and athleisure and workout wear.
But is this just a post-pandemic boom that will fizzle out? No, industry experts resoundingly agree. The health and wellness industry bonanza is “here to stay,” according to McKinsey.
“If the pandemic has taught us one thing, it’s that physical and mental health will remain a priority for millions of people across the globe for a long time to come.”
It’s a (vegan, low-fat, zero-sugar) gravy train that workout wear brand Lululemon has ridden into 2021 on. First stop: China.
“We saw a 4% revenue increase in international markets, and despite all that happened in the world, China delivered a really strong performance with total revenue increasing by more than 100% in the third quarter [of 2020],” Calvin McDonald, Lululemon’s chief executive, in the South China Morning Post.
But it’s not just opportunities for industry icons like Lululemon that beckon.
While local companies are gaining traction, international brands in the health and wellness category are still leading the industry. Brand-savvy Chinese consumers still value the stringent safety standards, improved quality and innovation that foreign brands promise. And they are willing to pay premium prices for them.
What’s driving this health and wellness sector growth?
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There’s no doubt that COVID-19 has put health at the forefront of consumer’s minds. In China, this shift towards a healthier lifestyle has been on the horizon even pre-pandemic.
As well as government initiatives to promote health, one driving factor in this is the explosive growth of the country’s middle class, which is on track to expand from the current 430 million to 780 million by 2025.
Well-educated with a global mindset, this middle class views a healthy lifestyle as a high priority. More than 70% exercise regularly, purchase organic food, and strive to achieve a daily work-life balance.
With these consumer insights in mind, here are the key trends that offer significant opportunities for British businesses looking to enter the Chinese health and wellness market.
1. Sports gear and gyms
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With average weekly exercise rates significantly higher than in the UK and wider Europe, the domestic demand for sporting goods in China continues to increase.
Statista projects that the value of the sports equipment market there will reach approximately $200 billion in 2021.
And it’s not just products that offer opportunity, but the facilities themselves.
A recent Deloitte report showed that while the Chinese fitness sector is growing rapidly, there is still plenty of room for further growth – including those looking to invest in the country.
“The fitness market in China has been developing rapidly for more than 20 years, going through various phases of development in the past two decades. In the past few years, the fitness industry has once again witnessed accelerated growth.”
There are gaps in the sector for professional management and trainers and transparent market information. These offer unique and potentially lucrative opportunities for the well-oiled British fitness sector.
2. Supplements and vitamins
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Chinese consumers are popping more pills than ever. A survey by BCG showed that almost a third of consumers indicated that they would purchase more vitamin and health supplements post-COVID-19.
This is a market heavily geared towards cross-border trade, with the high safety standards associated with foreign brands highly attractive to China’s online shoppers. The ability to purchase online, directly from foreign retailers is also important to customers looking to avoid the types of counterfeit products that have been known to be sold domestically.
“The reason we went into China was that we saw a big appetite for our products. People would actually buy the product… take it to China, and then sell it for twice or three times the price. So we thought, ‘There is interest. Let’s look into the market.” Walter Faulstroh, co-founder and CEO of Hum Nutrition, which launched on China’s Tmall Global platform in October 2019.
Niches like sports nutrition and pregnancy supplements are also considered areas that domestic brands are failing to deliver on, opening up clear opportunities for British brands.
And it’s not just a boost in health that consumers are looking to supplements for, but beauty, too.
“Beauty from the inside out has always been a tradition in China, especially with traditional Chinese medicine.” Julian Reis, the CEO of SuperOrdinary, a Chinese marketing and distribution firm.
Beauty supplements are the fastest-growing category within the health and wellness space on Tmall, according to new insights from e-commerce giant Alibaba. Those products with whitening, anti-ageing and hydration promises are the most sought-after.
Another supplement trend that savvy businesses should consider is supplements that are taken preventatively. For example, market analysts are noting increasing levels of younger consumers taking supplements like the well-known Naobaijin melatonin supplement, which is generally marketed at older generations.
3. Athleisure and workout wear
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Most of us probably feel as if we wore jogging bottoms for the entirety of 2020, but clothing with comfort in mind is here to stay. In China, at least.
The Chinese love for streetwear combined with a growing interest in sports participation has led to a desire to appear fit and healthy. ‘Appear’ being the operative word. According to analysts at Euromonitor this ideal of looking sporty ‘has become the new sexy’.
China’s Gex X see fitness as something to be done for its health benefits, but its Millenials and Gen Z view it as a social activity. The result? Consumers want activewear that’s both functional and – arguably more importantly – fashion-forward.
The lines between fitness and fashion are blurring. This, coupled with beauty preferences shifting away from skinny to strong, is driving more Chinese women to work out than ever before. And more working out means more gear to do so in.