In the next five years, the scale will exceed 500 billion yuan, and China's health food sector will enter a 'golden period' of development.

As an important part of the big health industry,the market for health products, dietary supplements, and nutritional health foods is ushering in a new round of growth.According to the recent report titled '2021-2026 China Health Products Industry Market Outlook and Investment Planning Analysis Report' (hereinafter referred to as 'the report') released by the Forward Industry Research Institute, China is in the process of transitioning its per capita GDP to between $10,000 and $12,000. Health products in China are gradually shifting from high-end consumer goods and gifts to essential dietary nutritional supplements, and the entire industry is expected to accelerate its growth in scale accordingly.

The report points out that, based on Euromonitor's forecast data and current industry development trends,the industry growth rate is expected to remain at least around 4% over the next five years, with the market size reaching approximately 517.8 billion yuan by 2026..

Industry experts indicate that,in the next decade, the penetration rate of health foods in our country will gradually evolve from first and second-tier cities to third and fourth-tier cities, from the elderly population to the young and middle-aged population, and from health supplements to dietary nutritional supplements.The health food industry will enter a period of rapid development known as the 'golden age.'

E-commerce platform sales are rapidly developing.

Euromonitor data shows that in 2019, the market size of China's health products industry reached 396.5 billion yuan, with a growth rate dropping to 3.1%, mainly due to the strict regulation of the industry in 2019 and the 'Qianjian incident' affecting consumers' willingness to purchase health products. In 2020, due to strict industry regulations and the impact of the COVID-19 pandemic, the Forward Industry Research Institute estimated a growth rate of about 3.2%, conservatively estimating the market size of the health products industry in 2020 to be 409.2 billion yuan.

While the market is rapidly developing, the sales channels for health foods are also constantly changing. In 2016, the online sales share of health foods in our country first surpassed that of pharmacy channels, becoming the second-largest sales channel for health foods after direct sales, with a compound growth rate of as high as 31.2% over the past five years. Due to the pandemic, the e-commerce model has 'stood out' among many sales channels for health foods.

In recent years, among the sales channels for health foods in our country, direct sales account for the largest share, approximately 44% of total sales; online, pharmacy, and mass supermarket channels account for about 30%, 22%, and 3%, respectively. In terms of growth rate, online sales channels represented by Douyin and Xiaohongshu have the fastest growth and maintain a high growth trend. According to relevant data from Alibaba, in 2020, online sales of health foods surged. In 2019, the online sales of health foods through Alibaba channels were 21.41 billion yuan; in 2020, the sales reached 33.396 billion yuan, a year-on-year increase of 55.95%.

From April 8 to 10, Tmall launched its first 'Tmall Health Festival.' Data shows that on April 8 alone, health-related consumption surged by 60%, with health products and traditional nutritional supplements increasing by 78% and 54%, respectively. By the end of the event on April 10, nearly 3 million people purchased health-related products and services during the Tmall Health Festival. 'Genuine products at good prices, health is priceless' reflects the current demand for health consumption, with more and more people willing to 'spend money on health,' crossing age barriers.

'Don't underestimate us young people; it's common to have minor ailments.' Young Zhang, born after 1995, self-deprecatingly talks about the sub-health issues among young people. Tmall health data shows that active users born after 1995 have increased by 30%. In addition to loving beauty products like colored contact lenses, enzymes, and medical masks, health products like goji berry juice, collagen gummies, and black sesame balls frequently appear in their shopping carts. Notably, active users aged 50 and above have also increased by 10%, with their favorite health products being weight loss products, calcium tablets, and moxibustion. It is worth noting that in addition to health maintenance, more and more consumers are beginning to choose e-commerce platforms to meet their household medication needs.

Industry experts analyze that the growth of online sales channels for health foods is mainly reflected in two aspects: on one hand, the COVID-19 pandemic has gradually pushed consumers who originally belonged to the supermarket and pharmacy model online; on the other hand, the improvement of health awareness and the time spent at home have given people more time to browse their phones, all of which have brought more foot traffic to the e-commerce model.

The report points out that from the consumer end, there is significant growth potential in China's health food market. The medical and health consumption expenditure of Chinese residents has increased from 586 yuan in 2009 to 1902 yuan in 2019. However, there is still a significant gap between China's per capita health product consumption expenditure and that of developed countries. In 2019, China's per capita consumption of health products was $29, only about 1/8 of that in the United States. With the continuous increase in per capita disposable income and the growing middle and high-income population, there is still further growth potential for health food consumption, indicating a huge overall development potential.

Presenting a trend towards younger and snack-like development.

As the post-90s and post-95s generations begin to pay attention to health maintenance, the consumer group for health foods is gradually shifting towards younger consumers. The report '2020 Annual Insight into Young People's Online Health Product Consumption' released by CBNData indicates that the post-90s generation is becoming a new force in purchasing health products. Data shows that from 2013 to 2020, the market size for health products among young and middle-aged people in China has been continuously growing, with a growth rate mostly maintaining above 10%. In 2020, the market size for health products among young and middle-aged people in China reached 70.09 billion yuan, a year-on-year increase of 12.4%, and it is expected to grow to 75.8 billion yuan by 2021.

The '2020 New Health Consumption Trend Report' points out that under the guidance of the 'new health' concept, a more significant change is that passive medical care needs are beginning to transform into an active pursuit of a healthy lifestyle. A series of 'fancy health maintenance' concepts such as cyberpunk health, targeted health, after-the-fact health, and traditional Chinese health represent a more diverse direction of current health consumption.

The hot sales of health products such as enzyme jelly, collagen gummies, niacinamide drinks, and oral hyaluronic acid-filled gummies, as well as nourishing products like ginseng honey slices, black sesame balls, instant fish maw, goji berry juice, and fresh stewed bird's nest, also show that the current consumer group for 'fancy health maintenance' is no longer rigid in product forms.

Shen Difan, head of Tmall Pharmacy, revealed: 'The demand for products among health-conscious consumers has changed significantly, and new technologies and products are being maturely utilized by brand merchants. For example, the sales of goji berry juice on the Tmall platform currently account for one-third of the goji category.'

For young people who enjoy 'beer with goji berries and cola with dangshen,' their favorite health products are various convenient ready-to-eat snacks. 'Work hours are very tight; traditional health products are not only expensive but also cumbersome to prepare, so ready-to-eat is the best,' said Xiao Zhu, who works in a media company. 'Due to the impact of the pandemic, everyone is paying more attention to health, and improving personal physical fitness and enhancing immunity will be the main theme of life in the future. The demand for snacks has quickly shifted from just being tasty to being healthy and functional.'

Compared to traditional health food ingredients that require steaming, boiling, stewing, or simmering to be consumed, young people prefer "ready-to-eat" and tasty nutritional supplements. An increasing number of health and wellness foods are emerging in the market, such as collagen gummies and probiotic solid beverages. Currently, health food is developing towards snack-like and lightweight forms.

The report shows that health foods rich in dietary fiber, grape seed extract, and collagen are increasingly favored by young consumers. For example, young people now supplement vitamin C not by buying a bottle of tablets, but by purchasing orange-flavored "multivitamin gummies"—achieving dietary supplementation in the form of eating gummies and jellies. The acceptance of "snack-form" health products among those born after 1985, 1990, and 1995 is rapidly increasing.

Source: WeChat public account "Nutrition and Health Industry",The future five years will exceed 500 billion yuan; China's health food will enter a "golden period" of development.