China's 'amazing industry growth' shows no sign of slowing...despite regulatory barriers

By Gary Scattergood

- Last updated on GMT

HPA-China executive director Jeff Crowther.
HPA-China executive director Jeff Crowther.
China's supplement market will continue to experience double-digit annual growth for the next couple of years, but longer-term success hinges on regulatory reform, says the executive director of Health Products Association – China.

Speaking to us in Shanghai, Crowther said the size and growth of the China was "amazing"​, especially in light of a deeply complex regulatory environment to enter the domestic market.

"The developments we have seen have been in spite of what is a really tough set of rules for global companies, but also for local companies. It's almost like a shared experience."

This is why most overseas companies have entered the market via cross-border e-commerce, but this, too, has been beset by under-activity since 2016, with the current transitional rules set to expire at the end of the year.

At this stage, it is unclear whether the regulations — that largely class cross-border e-commerce purchases as personal trade, and thereby subject them to fewer rules and taxes — will continue.

Whatever happens with the rules, Crowther insists "cross-border (e-commerce) isn't going away"​.

"E-commerce is here to stay. The growth in China has been massive; the question is how will it be regulated?"

He said he was also keen to see ongoing reforms around access to the domestic market. At present, the application process for 'blue hat' regulations, which allow products to be sold in local retail channels, is both costly and time-consuming.

"They are taking baby steps and we hope this will continue,"​ he added.

"While global brands will still use e-commerce, they also need to be able to enter the channels they are used to operating in across the world, such as pharmacies and hypermarkets.

"If this happens, we'll see consumer education rise, and global brands will be more willing to invest on the ground here in China."

Sports success

One policy that is already having a positive effect, however, is around China's 2030 Health Plan, which places a strong focus on preventive health, exercise and well-being.

Crowther, speaking to us at HPA's International Nutrition and Health Summit — where NutraIngredients-Asia​ was the official media partner — said this had helped the sports nutrition sector in the country, which is developing rapidly.

He said Xiwang Group's acquisition of Iovate Health Sciences International Inc, the Canadian owner of nutrition supplement MuscleTech , was an early marker for the potential of the sector.

"Here we have a China brand that will now want to make money from its deal and will therefore help raise greater awareness of sports nutrition in the country."

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