Sports, regs and cross-border success: The three top trends among trade body members in China

By Gary Scattergood contact

- Last updated on GMT

Sports, regs and cross-border success: The three top trends among trade body members in China
The rise of sports nutrition, complex regulatory and sourcing issues, and the ongoing surge in cross border e-commerce is driving trade association membership in China, as more international firms begin to tap into opportunities in the country.

Industry trade body the US-China Health Products Association (USCHPA) recently welcomed 12 new member companies, taking its total to around 35 and encompassing more than 80 brands.

USCHPA executive director Jeff Crowther said a growing interest in sports nutrition and the increasing professionalism of the sector were two key factors.

"In the past, most international sports nutrition brands entering China did so through local China distributors. Unfortunately, many of these distributors did not have national reach, were unfamiliar with the growing roll of e-commerce, and in some cases, operated with little oversight of the brand owner," ​he said.

"This hands-off approach to China will not work into the future because competition is ramping up and getting mainstream."

Investment and expansion

He added that international brands like MuscleTech and Labrada now have significant Chinese investment. In addition, brands including GNC, Optimum Nutrition, BSN, Isopure and Clean Machine all have offices in China, while domestic companies such as Competitor and By-Health’s Gymmax are moving ahead with investment and expansion.

"Sports nutrition is beginning to mature in China. New players to the market will have to invest, be hands on and involved otherwise it will be difficult for them to grab market share," ​added Crowther.

On the back of this growing interest, USCHPA recently held its sports nutrition summit in Shanghai ahead of the annual FIBO trade show.

The event attracted 75 delegates, with companies such as GNC, Glanbia and Alibaba among the presenters.

The association also hosted an International Sports Nutrition Education Seminar during FIBO.

"The goal here was to give association members an opportunity to speak directly to athletes, trainers, coaches, distributors and exercise enthusiasts," ​said Crowther.

"The seminar was a big success, with over 100 attendees. The association will be hosting more educational events like this at FIBO and other expos."

Sourcing data

Crowther added that regulatory issues were continuing to attract new memebers, especially in light of new rules around permitted ingredients.

He has also witnessed growing interest in sourcing, and said this was a topic the USCHPA would be devoting more resources to over the next year.

Finally, he added that the ongoing boom in cross-border e-commerce, along with regulatory uncertainty in this field, was a major focus for new members.

The current cross-border e-commerce regulations were due to expire in January, but were recently extended​ to 2019.

The Chinese government was originally planning to introduce tougher rules that would have seriously affected supplement and health food firms.

But now, the latest indications suggest that the current model, where goods are regarded as for personal trade rather than for commercial distribution, are likely to stay in place for at least another year.

"Cross border e-commerce is big business. Most international supplement brands are doing 80% to 90% of their total China business through cross-border,"​ said Crowther.

"At this point, the economic environment of cross-border includes many Chinese supportive industries, including logistics, packaging, labelling, IT, customs clearance and marketing.

"If the government were to shut it down for supplements, they would not only be denying Chinese citizens what they want, but also hurting local businesses that support this industry."

Tax rates

Furthermore, Crowther added the government would lose the 11% to 15% tax they are currently getting for each cross-border shipment.

"I really don't see a benefit in shutting it down. At most, the government might change tax rates or caps on the amount one individual can buy through cross-border, but that is most likely it."

The USCHPA’s 12 new members are: AlzChem, Blackmores, Cyanotech, GOED, Golden Omega, Healthy Directions, the International Probiotic Association, It Works, Lonza, Pharmavite, Probi AB, Reed Sinopharm and TwinLab.

Crowther added: "We have a good mix of ingredient and finished product companies, and we are seeing greater interest from local, as well as international, firms now."

Related news

Related products

show more

Robuvit

Introducing Robuvit® For Premium Vitality

Horphag Research (USA) Inc. | 06-Jun-2017 | Clinical Study

Horphag Research launches Robuvit®, a French oak extract that is a caffeine-free natural energizer and supports sports performance. Published research...

Related suppliers

Follow us

Featured Events

View more

Products

View more

Webinars