In June the New Zealand Institute for Plant & Food Research conducted a survey with 3,500 urban Chinese consumers that looked into their views on supplementation. The results were compared to a similar survey done in March 2019.
Survey finds foreign brand allegiance down
The survey organizers said the results showed that Chinese consumers’ allegiance to foreign brands seemed to be waning. On the question of “I prefer multivitamins and supplements from overseas brands” 75% of respondents said they agreed less with that statement compared to the previous year.
The survey also found that consumers’ trust in TCM products was up. A number of TCM formulas have been investigated for their effects on helping COVID-19 patients recover better from their infections. The overwhelming majority of TCM products come from in-country producers.
Experts say ‘Made in USA’ still a selling point
The question NutraIngredients-USA put to experts familiar with the topic was whether they’ve observed a diminution of the value of the ‘Made in USA’ claim on dietary supplements. As part of a long standing hangover from the 2008 melamine scandal Chinese consumers have seen US-made supplements as being higher quality and more trustworthy than fully domestic brands. This is true even if those supplements assembled in America inevitably contain many Chinese ingredients.
“We have not seen a decline in the enthusiasm for US-made products,” said Loren Israelsen, president of the United Natural Products Alliance. UNPA has made a point in recent years of helping its membership find pathways into mainland Chinese markets, a process that can be fraught with difficulty for the uninitiated. UNPA has gone so far to have a full time employee within the country who is familiar with US business practices yet is also fully fluent in Mandarin.
“As for TCM, the Chinese government has had a long standing interest in advancing TCM products both for domestic use as well as introducing it to the Western world as an ancient tradition that is being updated,” Israelsen said.
“Western medicine is seen in China as being very expensive and in many cases not very accessible to a lot of people,” he added.
Geopolitical tensions underlay market concerns
Jeff Crowther, president of the trade group Health Products Association - China, said the origin of the survey in New Zealand is telling. Australia and New Zealand supplement brands look to China and East Asia for their major markets, and the governments of both countries see China as their most pressing geopolitical concern.
While US President Donald Trump’s trade war with China has dialed up tensions between the two countries, Crowther said the US is far from the only country that has issues with the Asian giant.
“From Australia and New Zealand there is definitely a concern because they are a smaller couple of nations where a high volume of their exports are going to China and they don’t have a very good relationship with China. But a lot of countries don’t have a good relationship with China,” Crowther said.
“China can’t bully the US. The two countries are in a lockstep because of their trade relationships. But China does like to bully smaller nations that have a heavier reliance on them,” Crowther added.
Israelsen said the Chinese policy of having business sectors serve foreign policy goals can be seen in official statistics. Even though the Chinese market was seen before the pandemic crisis as one of the holy grails for US exporters, the overall penetration is still small.
“Look at the ‘blue hat’ supplement registrations; 98% of these are Chinese companies. Only 2% are from foreign firms,” he said. A blue hat registration (so called because of the shape of logo on the labels) allows a supplement to be sold in brick and mortar stores in the country. But it’s not the only route to the market; many exporters to China opt for a cross border e-commerce method.
US products tainted with virus?
While sales of US made products are holding up so far, Crowther questioned whether the pandemic crisis could have a long term impact. While COVID-19 infections peaked first in China, that country successfully corralled the spread of the disease. In the US, however, cases continue to rise.
“Consumers might start to question if a package from the US is contaminated with the virus. That would be a very Chinese way to look at things. After the Fukushima meltdown, sales of Japanese products went way down because Chinese consumers were concerned they might be tainted with radiation,” Crowther said.