Mar-06
Return of direct sales
in China bodes well for wellness
The global wellness market, currently dominated by the US, Canada,
Japan and Europe, is valued at US$80 billion. Comprising health-complementary
products such as vitamins, dietary supplements and neutraceuticals,
the market in Asia - led by Japan and China - is slated to emerge
as the world leader. Demand is fuelled by growing consumer awareness
of diet-disease links, aging populations, advances in nutrition, growing
purchasing power and rising health-care costs.
In December 2005, the most significant shift in the region’s
wellness industry took place when China lifted a seven-year ban on
direct sales, allowing both domestic and foreign companies to tap
into a wellness market which is expected to reach US$12.5 billion
by 2010. Direct sales were banned in 1998 amid reports of rampant
fraud and pyramid sales schemes. We are now witnessing a near stampede
of major players - Herbalife, Avon, Amway and Nuskin - rebuilding
sales networks in the country.
This is merely the beginning of a major shift in distribution models
in China which will have far-reaching implications for the wellness
industry. A case in point, Shenzhen-based Joincare Pharmaceutical,
which generates 30% of its US$380 million revenue from healthcare
items (including health-drinks), plans to sell these products door-to-door.
Looking to the future, the wellness market opportunity in China dwarfs
that of other Asian markets such as Thailand, India and the Philippines,
thanks to rapid growth, sheer size, and the easing regulatory environment.
In China’s disparate market, the winners will be companies which
formulate segmentation, marketing and distribution strategies that
offer products to consumers who both want and can afford them, especially
upcoming products such as nutraceutical beverages, skin supplements
and nanoceuticals.
If you would like to find out more about how our analysis frameworks
and business research could help your company succeed in China and
other Asian markets, please email more@fusionc.com.
Visit our Life science
practice
About Fusion Consulting
Fusion Consulting is a business intelligence consultancy providing
strategic advice on Asia-Pacific markets. With offices in Shanghai,
Singapore and Hong Kong, and a network of 400 freelance industry consultants in 16 countries, the company conducts custom research and consulting
to help clients understand their markets, compete more effectively
and grow into new areas of opportunity. www.fusionc.com
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