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 The vitamins market is set to expand five percent a year to $20
billion in 2019, half its pace of growth since 2009. It's being
outstripped by a traditional medicine business that could be worth
$40 billion by then - and is growing twice as fast.
That's prompted vitamins firms from direct seller Amway to giant
U.S. drugmaker Pfizer Inc to look for inspiration from traditional
medicine recipes going back thousands of years to succeed in China's
increasingly pivotal healthcare market.
"We've tried to learn the heritage and marry it with modern life
sciences," Jia Chen, vice president of Amway's China research and
development division, told Reuters.
The firm offers products for memory and liver health drawing on
traditional ingredients such as ginseng and liquorice. It recently
invested around $13 million in a traditional Chinese medicine
research lab in the eastern Chinese city of Wuxi.
"Half of the population still believe in traditional ways and still
go to traditional doctors or hospitals. This is a way of life and is
passed from generation to generation," she said.
Pfizer broke ground in June on a $95 million facility in eastern
China to expand production of its Centrum and Caltrate brands. It's
now offering golden-hued gift boxes of vitamins, playing into the
trend of giving expensive traditional Chinese medicines as presents.
Traditional remedies are used in China to treat everything from low
energy to cancer, making for a business that's broader than
Western-style vitamins and health supplements. The industry's
ancient roots, along with rising disposable incomes, greater health
awareness and supportive government policies, have helped stoke the
market further.
It's a potentially lucrative model too, with shoppers willing to
splash out for natural ingredients boiled together to create a
curative brew. One Shanghai shopper said she had bought a
three-month skin treatment for 6,000 yuan ($942).
Leaders of the market for these remedies, like Beijing Tongrentang
Co Ltd, have products with snakeskin, dried toad, centipede,
scorpion and dandelion to treat swelling, and others with oyster,
ginseng and black-bone chicken for menstrual pains.
"At the moment the real money-spinners are deer antler and ginseng,"
said Yu Qiangmin, 51, a chemist in a traditional medicine store in
Shanghai.
HEALTHY MIX?
Some vitamins suppliers say demand from safety-conscious consumers
for high-quality imports is robust enough to fuel market growth.
Hong Kong-listed Biostime International Holdings announced a
billion-dollar deal last week for Australian vitamin maker Swisse
Wellness to build on strong Chinese demand.
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"Chinese consumers are prepared to pay a premium for our products
because they know that those products are quality-checked before
they're sent out to China," Christine Holgate, Chief Executive
Officer of Australia's Blackmores Ltd, told Reuters in an interview.
Blackmores has seen its shares nearly quadruple in value this year,
accelerating after an 83 percent spike in annual profit helped by
booming demand in China. The firm has hired Chinese tennis star Li
Na to promote its pregnancy supplements and help boost local demand.
(http://bit.ly/1XJTnj9)
Vitamin makers are also looking to lure younger, urban Chinese
consumers who are less convinced by traditional methods and willing
to mix the old with the new.
Wen Zuolin, 21, a food safety student in Shanghai, has swapped
indigo woad root for vitamin tablets which she says are more
convenient, taste better - and she knows what's in them. She admits
she goes back to traditional cures from time to time.
"Older generations trust traditional Chinese medicines more. Some of
us youngsters still trust it too, but the majority prefer
Western-style medicines because they have a quicker effect," she
said.
In Shanghai, 82-year-old Li Dongmei wasn't yet convinced as she
scoured cluttered shelves and old wooden drawers in a downtown
medicine shop.
"I'm not sure about how effective it is, but I still take
traditional Chinese medicines every day," she said, laden with a
haul of two heavy bags of products which can cost hundreds of
dollars for a few months' treatment.
"Vitamins, I don't really trust yet."
($1 = 6.3694 Chinese yuan renminbi)
($1 = 1.3904 Australian dollars)
(Reporting by Adam Jourdan in SHANGHAI, Donny Kwok in HONG KONG,
Byron Kaye and Jane Wardell in SYDNEY and SHANGHAI newsroom; Editing
by Kenneth Maxwell)
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