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