Driven by the growing awareness of the holistic health associated with Covid-19, Chinese consumers are on a health-conscious move to spend more on health and lifestyle products.
Chinese consumers are taking additional diet products to boost their immune systems, boosting China’s vitamin, mineral and supplement market, which is expected to reach $ 40 billion by 2023.
WHC, a Belgium-based fish oil brand known for its pure omega-3 concentrates, spotted this opportunity and jumped out of the competition to quickly become the # 1 category on Tmall Global, the leading cross-border B2C marketplace. from Alibaba.
“Chinese consumers are very health conscious. In Asia, people are working hard, investing and thinking more about prevention than managing a health problem at the moment. This is very evident in China, ”said Jo Wyckmans, founder and president of the WHC. “Since last year, given the pandemic, there has been a growing awareness around supplements, and sales have since taken off,” he added.
China’s sophisticated appetite for imported supplements
WHC was first introduced in China in 2015 by Daigou, a Chinese term for an individual or group of people who purchase products while traveling or abroad for mainland consumers. Among them was Dylan Zhang, then 22, who later opened his own import business called InReady Limited to help integrate WHC into Alibaba’s e-commerce platforms.
Back then, the overseas dietary supplement market in China was much smaller than it is today and the market was dominated by a dozen American and Australian brands, Zhang said. Daigou has played an important role in introducing mainland consumers to the idea of niche brands and supplements from overseas.
As the purchasing power of Chinese consumers increased over time, Chinese buyers became more sophisticated and specific, Zhang said people began to educate themselves on the content of their products, which gave brands of boutique and niche a chance to flourish. In fact, a McKinsey 2020 consumer report found that 60% of consumers in major Chinese cities said they read food labels and would decisively avoid things that are unhealthy.
This behavior worked in WHC’s favor as its product innovations enabled the brand to produce highly concentrated fish oil. Ultimately, this helped WHC respond to specific dietary demands that turned into long-term consumer loyalty.
“We wanted to make sure they got their omega 3s in a capsule, with extreme purity. We were sure that our product was strong and of high quality, perfect for the Chinese market, ”Wyckmans said.
Swim above the competition
Like many foreign brands in this industry, WHC’s debut in China has been exclusively online – first with Taobao Global, Alibaba’s cross-border channel featuring SMEs. When the brand gained enough momentum, it launched a flagship store in 2019 on Tmall Global. Along the way, the brand leveraged Alibaba’s extensive supply chain and cross-border processing services, where Cainiao Logistics took care of local pickups from Belgium, global shipping, customs clearance and storage. in warehouse until local delivery in China.
“Alibaba is the first and the largest cross-border platform, so it was not a difficult decision to make. Honestly, I didn’t think about choosing another place to start the business, ”Zhang said.
Unlike the over-the-counter or in-store purchases popular in the US and European markets, vitamin, mineral and supplement companies, or VMS for short, in China rely heavily on e-commerce. For Chinese consumers, online shopping has come to mean incredible service, convenience, and access to more foreign brands.
On the marketing side, the brand has been able to reach more of its target customers through Tmall Global, with China now accounting for a third of its global sales. Much like Zhang, who initially bought the product for his own family years ago, WHC buyers are savvy, young and generally educated. This group of supplement buyers tend to choose quality over price, which is why foreign brands in this category have a strong take-off potential.
Dive Deeper into China’s Untapped Supplement Market
The brand peaked at the last Global Shopping Festival on November 11, in terms of brand reputation and sales – reaching over one million GMVs, tripling its record in 2019. Buyers placed large orders during the pandemic, partly to stock up, but also because fish oil was becoming an essential supplement widely by all age groups.
“Belgian products or European products in general are widely recognized by Chinese customers for their quality. Many European brands do not compromise on quality for rapid growth. They regard the brand’s reputation as a top priority, ”said Zhang.
Instead of looking for additional sales, the next step for WHC is to focus on China’s diverse consumer segments and meet their localized product needs. Zhang said he believed the opportunity was in the urban outskirts, second and even third tier cities. To that end, the brand will launch its best-selling fish oil in smaller half-price bottles later this year to meet the needs of customers who buy at lower prices.
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