Accelerated through the pandemic, consumers in China are more dedicated to healthy ageing than ever before—including an increasing base of younger consumers proactively addressing prevention. Within the ageing category, inner beauty is a particular area of interest driving new launches in edible beauty products. Additionally, sleep and general anxiety management through dietary supplementation is seeing significant uptake. Tune into this podcast with Zarina Kanji, Tmall Business Development lead for Health & Wellness and Food & Beverage Brands, Alibaba Group Europe, to learn more about:
- How Chinese consumer attitudes toward ageing have shifted over the past few years, including through the COVID-19 pandemic
- Defining healthy ageing and positioning the category for wider demographic appeal
- Examples of UK and Nordic companies seeing success in the Chinese market
- Key considerations for EU and UK-based nutraceutical brands looking to launch into China
Vitafoods Insights: 00:00 Welcome to the Vitafoods Insights podcast. Join us as we explore the latest science innovation, helping the global health and nutrition industry connect, develop and progress. Today's host is Charlotte Bastiaanse, editor.
Charlotte: 00:22 Hi, and thanks for tuning into this Vitafoods Insights podcast. I'm so pleased to be joined today by Zarina Kanji, who is Tmall business development lead for health & wellness and food & beverage brands at Alibaba Group Europe. Thanks for joining me today Zarina.
Zarina: 00:36 Hi, Charlotte. Thanks so much for having me. It's great to be here.
Charlotte: 00:39 Today we are zooming in on China and talking through the consumer mindset shift that is currently being observed when it comes to the healthy aging category. But before we get into any of that Zarina, I'd love to just hear a little bit more about you and what it is you do exactly at Alibaba.
Zarina: 00:55 So I lead business development for health and wellness and food and beverage brands at Alibaba group in Europe and based in London. And essentially my role is to look for the leading and trending brands in those categories and help them export to China to sell on Tmall global. Tmall global is part of Alibaba's core commerce business, and It's a marketplace platform- essentially the home of international brands in China. So we work with almost 30,000 international brands, across many different categories. And 80% of those brands are actually making that China debut into the market.
Charlotte: 01:35 Awesome Zarina. Thank you so much for that introduction. I think, um, China itself really does present a tremendous opportunity within the nutraceuticals and the health and wellness industry at both consumer and supply chain levels. Well, let's get into our discussion. I'm so excited to talk about the healthy aging opportunity with you. I think, as with very many other industries, COVID-19 has really changed behaviors and purchasing habits, which is driving growth in some key categories while others might, you know, be seeing a different interest. And later in this discussion, we are going to talk a bit more about the accelerated trends within healthy aging specifically, but from your perspective, Zarina, how has the COVID-19 pandemic impacted Chinese consumers' attitudes to health and wellness overall?
Zarina: 02:19 I think the pandemic has been really interesting to observe in China because it hasn't really changed the attitude to health and wellness. What it's done is accelerated the attitude towards health that was already in place in China. In 2016, the government launched an initiative called healthy China 2030, which works across 14 different streams from healthy eating to exercising more to stopping smoking, really with the goal of having Chinese people live longer and move more. So the pandemic really accelerated this shift that was already happening. As a result of the pandemic, what we've seen are 80% of Chinese consumers saying they plan to eat more healthily. We see almost three quarters of people in China who have developed healthier eating habits during lockdown and sense. And a recent survey also saw that 27% of Chinese consumers suggest that they would purchase more health and vitamin supplements after the pandemic. And then from our own platform from Alibaba Tmall platforms, we found that during the Chinese lockdown last year, which was the early part of 2020, sales of nuts increased on our platforms by 122% and sales of fresh vegetables and fruits increased by 72% on the platform year on year. So this show that the, you know, the pandemic meant that Chinese consumers were increasingly becoming more and more health conscious.
Charlotte: 03:54 Thanks Zarina. I think that's quite common what we're seeing is that these trends, not only within healthy aging, but I suppose, you know, we could call out the sports nutrition category for example, we're seeing this uptake in certain kinds of trends in the academic has really accelerated that. And to your point, I think, you know, people are aware that the health and nutrition that they invest in now, whether that's through raw foods or supplements really does contribute to how well they are protected naturally, and the strength of their immune system etc, as you said, people are looking to be more active, live longer, and I think quite keen to invest in that. Let's talk about healthy aging or more specifically, how do you think that consumers attitudes have changed towards aging? And, I suppose what is the sort of evolution of that category as a whole?
Zarina: [00:04:41] I think that there are three sort of overarching trends within this. Firstly, is that the Chinese consumers work very preventatively rather than reactively. So they really do start taking care of themselves a much younger age than people in the west. Really, we see it coming through products like eye health, joint health probiotics to really look after the body. Secondly, I think that we're seeing more of an acceptance of aging, particularly amongst women. Historically, if we've looked at supplements that are on the market for women of menopausal age, 75% of those supplements are really aimed to delay the onset of menopause. Historically women in China were just perceived as childbearers with not really much other function. So we've now got a generation of women who are more independent, more educated. And there's this increasing dialogue about menopause and prolonging life rather than prolonging child-bearing. That is a big shift. And then finally, we've got this greater importance by all on health and immunity, which overall saw the Tmall global health category growth 50% year on year, last year.
Charlotte: 05:52 It's really interesting your observations, Zarina. I think the whole definition of healthy aging is really changing. And the target areas, as you mentioned, the conversations changing around, what is the role of women? How do we support them as they age? And as you say, immunity becoming a lot more of a priority within the healthy aging category. It's no longer just about bonds and mobility really, is it? So if we consider the different consumer types that we're kind of seeing within the aging category, this is not really spanning different age groups, genders, etc., What do brands need to know about the different consumer types that are driving the demand for aging products at the moment and more widely, I suppose the dietary supplement market?
Zarina: 06:31 I think the first thing is really to look at the consumer demographic on Tmall global: 85% of the consumers on Tmall global are aged between 18 and 39. So we're really hitting that millennial and gen Z spot. And these are people that have really grown up with Alibaba with Tmall that very digitally savvy, that globally minded, they've really grown up with a phone in their hand and they've seen this rapid development in China in the past 30 years; 90% of the 779 million users of our China retail marketplaces are shopping on a mobile app. These are people that are real early adopters. But I think the brand also be aware that China has an aging population and that population is around 260 million people today and that's forecast to grow as people are living longer as part of this healthy China, 20, 30 initiative. So what we're going to see is, a population who are more internet savvy than ever before. And they're going to be continuing to look for international brands. We've also got many top tier cities with a demographic that we call supermoms. So women with children, but also careers, and because they are replicated and they are more financially independent than women were in the past, they are able to, and they want to make the best decisions in what they purchase for their children and for their family. And it quite often as the supermoms who are the decision maker and the purchaser of products, and again, as mentioned this entire demographic in China of these millennials and gen Z, they are working preventatively, not reactively when they think about health and healthy aging.
Charlotte: 08:22 That's really interesting as you read. I think it's so fascinating to see how broad the consumer group is becoming within healthy aging. I mean, as you said, there's still an from population of people who are living longer and are on the more senior spectrum, but to have such a wide group of people that are in the millennial side, that are sort of adopting products that they deemed to support them in the aging process, it's no longer about anti-aging, isn't it? It very much is about supporting health through the ages, and I think the fact that we're seeing younger people interested in preventative health is really creating very big opportunity within healthy aging. This category, seeing quite a lot of interest in sort of specific health areas, what product categories within the dietary supplement market are you seeing? What is kind in significant growth at the moment?
Zarina: 09:08 There were really five major trends that we're seeing at the moment. The first is really products to help you look good and look younger. So inner beauty supplements, they were actually the number one seller during our double 11 global shopping festival, which happens every year in November across 11 days. During last year's festival in 2020 November, we turned 74.1 billion us dollars of GMV across the 11 days of the festival. So during that time, it's really where we see a lot of trends come forward, and inner beauty was the top subcategory within the health category. So collagen and fish oils. We have a couple of really interesting Nordic brands, actually one called Alexa Pharma from Sweden, Nora Mega of Norway who produce special products for skin, hair, and nails keeping it younger. We've got also the edible beauty market within that. So edible beauty for inner beauty is estimated to become a $3.7 billion industry by 2022 and 70% of those edible beauty consumers in China are under 25 years old. So that's that early adopter market coming through again. The second trend is supplements for sleep. Some research published in China, uh, by the NCBI and also the U S, they suggested that maybe a quarter of adults were suffering from depression during the lockdown. And that 20% was suffering from clinically significant insomnia. So it is no surprise that sleep is the number one health issue in China, um, they work very long hours. Like all of us through a pandemic, the anxiety levels are through the roof and finding supplements that can help them calm and relax are very, very important. The third trend is around meal replacements. It's a super interesting category. It's a category that's expected to grow by another 30% this year and to be worth approximately 18 billion us dollars by the end of 2022, next year. We've got some really interesting brands, particularly from the UK, from the hot group, like Myprotein, Exante Diet, plus, you know, the old incumbent brand SlimFast, which have really contributed to the growth of this category. And then top tier cities like Shanghai and Beijing, we've really seen these major trends in detoxing, juice cleansing, healthy foods over the last few years and mental commissioned to report recently, which saw that 87% of Chinese consumers are now drinking these plant-based protein drinks. The fourth trend is gut health trend, which is really taking force across the world. I'd say probiotics have become really popular in China and there's an increasing demand for prebiotics as well. And then the fifth and final trend is around longevity. So products to help you age better like glucosamine for joint health, and people in China, taking them at a younger age at the time that you really should be taking Glucosomine to help you age rather than taking them before that deterioration has already started. And then another product within that would be iron for boosting immunity if your levels up and we saw actually SALUS, they produce a Floradix iron liquid supplement. They actually took part in a livestream during August last year in 2020 and sold 34,000 bottles of that Floradix iron liquid supplement in just seven minutes. So these are the five major category trends that we're seeing to take force in China to work with healthy aging.
Charlotte: 12:38 Thanks, Zarina, that was really interesting framework to have. I'm really not surprised, you know, that sleep and general anxiety is really becoming an accelerated problem. Something I think speaks to, you know, the realities of modern lifestyle. And also obviously the real struggles people have faced through these various lockdowns and gut health, another one that you mentioned, you know, huge potential there to connect in with the concern for immunity and also relate back to cognitive health. So very interesting to see that those are quite prominent. And I think it was also interesting that you mentioned meal replacements, because I think people who are invested in their health, you know, they're interested in supplement support and nutrition support, but I think they very much do want this through food, don't they? Rather than lining up tablets and capsules, I think that's very much a thing of the past these days. Zurina, outter inner beauty and, you know, edibles and edible beauty, etc., You kind of mentioned there was some very successful brands from the Nordics that were producing fish oil products. Can you give us some examples of some of the brands here in the UK that are doing well or are quite popular in China and what can other retailers learn from their success?
Zarina: 13:44 Yeah, I think it's really important to note that there is a huge appetite for British brands in China. During our double 11 global shopping festival in November, 2020, we saw more than 1300 British brands taking part in the festival and actually selling 494 million. So almost half a billion dollars worth of British goods were sold to Chinese consumers in the 11 days of the festival. So that's a really something of note. Some of the brands that are seeing success would be firstly, Vitabiotics, the UK's number one vitamins company. They have been working in China for about five years now, predominantly with the pregnant care brand. And a year ago they opened a secondary team or global store for their health products. And what they've seen really interesting over the last year really is that their vision A's product for iHealth has become a top seller for them. So really Chinese consumers are like all of us, but more so than all of us spending a lot of time looking at screens. So products that will help combat that screen time to work against the blue light. And they also have a huge hobby in gaming, which again is exposing their eyes to a lot of blue light. So what bites Vertex are, is a product that is not one of the best sellers in the UK, actually becoming one of the best sellers in China. So the lesson that they've learned is really to go to China with quite a blue sky thinking, to look outside of your home best sellers and to look into what are the key concerns of the local market, and tap into that to reach a new consumer. Another brand that from the UK that's done really well, actually, um, they've been working with us for about two years is ProVen. ProVen are a Welsh probiotics brand. They actually have the largest probiotics factory in the UK and they did really, really well by just focusing on two of their products for female probiotics. So what they learn is actually that a really good partner is key for them. So everybody that works on Tmall global and opens a flagship store works with either a trade partner or a distributor. And that partner is essentially your e-commerce team on the ground in China. And what ProVen found is that having a good partner that can be extremely focused on what they want to do with your product and tap into the key consumer by using the data available to them is a way of really expanding a brand that is an SME in the UK and making it a success in China. And then the third example would be actually another trend, which is really, really taking force in China is Rude Health who have capitalized on the plant milk trend, which has just exploded in China over the last year. Plant milk sales grew two and a half thousand percent during double 11 global shopping festival last year. And what Rude Health did was really quickly moved to open an store so that they could access the Chinese consumer and tap into this trend relatively early for a Western brand. And then now driving ahead with their oat, almond and coconut milks to serve in China what is a largely lactose-intolerant market. Over 90% of Chinese consumers actually have a lactose intolerance, but also are becoming much more aware of the climate impact of eating meat, so moving towards a more plant based diet.
Charlotte: 17:15 Thanks for sharing those Zarina. I think it's really great to hear how these UK brands are shining in China and finding success and growth by tapping into the various specific needs of Chinese consumers- that's super to hear. These are obviously UK brands, what are some of trends that European health and wellness brands need to be aware of, I suppose, when selling to China?
Zarina: 17:36 I think there were three major interesting trends here that we're seeing. Firstly would be consumption habits. And we've talked a little bit about it already on this podcast. There's a real pill fatigue in China, which is slowly expanding to the rest of the world. So consumption of supplements really does need to be different now. So collagen drinks and gummies are really popular for inner beauty. There's actually a Chinese snack brand called Pejoy, which is a chocolate breadstick. They launched a range of beauty snacks containing niacinamide, so helping to brighten the skin. We're seeing things like college rich ice creams, as well as gummies, as well as drinks. Any way that you can consume a supplement that is innovative, that feels a bit indulgent is really at the forefront of this concept of edible beauty that's really quickly gaining momentum in China and the rest of Asia. And then alongside that, you've got, taking health products in more of a snacking format. So healthy snack bars, like there's a brand called Bomba from Serbia. They sold 1.2 million RMB of products of their protein balls on Double 11 global shopping festival. There's also a big demand for brands like the kind bars from USA, more of a natural health bar. So that is really interesting, the way is it's consumption trends. It's the way that you consume your health products. The second trend is around packaging size. We are seeing a lot more demand for portion size products with Chinese consumers being so busy being on the go all the time. They like to purchase those products in bulk, but they want to have it in a portion size so they can tuck it into their wrap cycle, their hand bag, and take it with them on the go so that they don't have to worry about where they're going to get their health and food from throughout the day. And then the third trend, I think health and wellness brands really need to be aware of when selling to China is how consumers shop. One of the biggest trends that's really taken over in China last year, and it's continuing to grow at a rapid speed is the trend for live streaming, live streaming as an immersive dynamic gamified interactive way of consuming products for a brand and for the shop for themselves. It's really about shop attainment. It's a key opinion leader or an influencer presenting, a product or a brand to consumers and the live audience format you can interact with it. You can click emoji's, you can ask questions and you can see the product and buy it now. So some of the brands from the UK they've taken part and would be again Vitabiotics. Um, and they actually have not only the key opinion leader, but also an expert from the brand. It's obviously harder to explain what exactly a health product does without having an expert there to really tell what the product can do for you, what the science says. So it's really. Exciting that this way of shopping has become so popular for Chinese consumers and enables them to really get closer to the brand to understand what they're about to buy.
Charlotte: 20:48 So there's a real emphasis on foods and beverages that are really packed with health benefits that seems to be quite a common trend, you know, everybody wants to invest in these different areas of health and nutrition and supplementing, but they really want in food and now nevermind getting it into food format. They also wanted to be small and compact so that it's convenient and fits into the lifestyles of consumers in China. So thanks for pointing those out Zarina .And I think it is really important to highlight how different the marketing channels are and the way that consumers seek their brand discovery. I think that's very, very different compared when you consider the sort of conventional marketing streams of the UK and Europe and even the U S I suppose. So I think that's a really difficult one for European brands to get their heads around. So Zarina we've covered what your European brands need to consider when they're trying to wiggle their way into Chinese health and wellness markets. But what do Chinese consumers look for when they are considering international brands?
Zarina: 21:47 I think first and foremost, they're really looking for product that they can trust. The Chinese consumers place a really great importance on trust. And that is a massive deciding factor in the products that they buy. More than 60% of Chinese consumers actually read the ingredients on the back of the label before they make a purchase. So they're looking for an international brand that produces in a trusted factory, that uses ingredients that they can recognize and that they can research the science behind. They're also looking for product efficacy. They want to see the science to back up what that product will do for them. And it's increasingly important for products that you put inside your body or onto your skin. The Chinese consumers really do want to be careful about what it is, and there's a perception amongst Chinese consumers that international brands have a great degree of trust, have a great degree of science behind them and particularly brands from the UK. But we'll say Australia and New Zealand, Japan, Korea, most of Europe and Australia , America and Canada. So, that's really what the consumer's looking for. And then finally, I think they're looking for a point of difference. They're looking for something that they can't find at home. There's a lot of sharing of trends between east and west, but there are also trends that do come out of the west that the Chinese consumers want to tap into. So that's also something really important. So trust, efficacy and difference are really what a Chinese consumer wants to see in an international brand.
Charlotte: 23:19 Well, and rightfully so, I think, um, there is a large generation of skeptical consumers who, um, as you say, want to be very careful about what it is they're putting into their bodies and they're quite patient, and they're quite happy to be proactive about researching products that they're discovering, especially those through online channels, where they're not having to make a decision in store and I think they want, as you say, the science to really reflect what products are claiming on their packages. And I think brands know that they can't fool consumers as easily as they were able to. Um, never mind how tight regulation is these days as well. Zarina it has been such a pleasure speaking to you about this topic and really sort of digging into the opportunity in China as well as understanding a little bit more about the consumers of today and the opportunity that exists for brands in the UK and Europe looking to, I suppose, you know, nag their little share of the market. So thank you for joining me today. It's been really interesting chatting to you.
Zarina: 24:13 Thanks so much, Charlotte. It's been really, really exciting and I look forward to seeing more British and international brands moving on to Tmall global in the future and getting into that health and wellness market there.
Charlotte: 24:25 Absolutely. Thanks Zarina.
Zarina: 24:27 Thanks Charlotte.