End of daigou era? Social media e-commerce strengthens its status for supplement sales in China
Prior to the COVID-19 pandemic, daigou – essentially a form of surrogate shopping where buyers/exporters outside of China purchase items such as infant formula and health supplements, usually in large quantities, for consumers residing in China – was known to be an essential form of cross-border e-commerce (CBEC).
Many brands used this channel to gain entry into the Chinese market, which has traditionally been difficult to enter and navigate.
But since the pandemic hit and supply chains have increased significantly in complexity, the appeal and utilisation of this route is no longer as straightforward, and this has opened up the doors for other marketing channels such as social media to gain a stronger foothold.
“Since the COVID-19 pandemic entered the picture, the overall daigou business volume is estimated to have dropped by some 80%,” BYHEALTH International Head of Sales and Marketing Jesse Gu told the floor at the recent Growth Asia Summit 2022.
“A good number of the top daigou firms have converted to other forms of sales and marketing, and today the current CBEC sales channels can mostly be divided into Traditional e-commerce i.e. by big online platforms such as Alibaba, JD and Pinduoduo; and what is called Interests e-commerce i.e. sales via social media platforms such as Douyin (Tiktok China) and Kuaishou.
“The Interests e-commerce platforms especially have been on the rise since the pandemic – taking a look at Douyin for example, in the first six months of 2022 the total GMV (Gross Merchandise Value) is estimated at CNY57.57bn (US$7.9bn), of which CNY26.79bn (US$3.70bn) came from live streaming sales conversion and CNY1.45bn (US$200mn) came from short videos sales conversion.”
As expected from the rise in the health and wellness trend globally amongst consumers including in China, health foods and dietary supplement product sales have been highly popular in this CBEC space - Chinese consultancy firm TMO Group reported that June sales alone were CNY2.71bn (US$374mn) with brands from Australia and the United States leading the charge, whereas Gu highlighted that liver health and eye health are emerging this year as major areas that consumers are showing strong interest in purchasing health supplements for.
“Based on data from Alibaba, we saw that the total turnover of the liver protection industry in June 2022 was valued at CNY596mn (US$82.2mn), a huge year-on-year increase of 64.34% from CNY365mn (US$72.0mn) in the same time period last year,” she said.
“Even more impressive sales were seen in the lutein category on Alibaba, which hit a value of CNY575mn (US$79.3mn), a 99.93% year-on-year increase from CNY280mn (US$38.6mn) in the same period in 2021.”
Preventing ageing-related issues to promote healthy ageing
Gu was speaking at the Healthy Ageing session of the summit, and named six areas where it is crucial to prevent ageing-related issues in order to promote healthy ageing in the population, both in and out of China.
“Our research has shown that six major health fields – the gut microbiome, homeostasis, cardiovascular, brain, anti-ageing and precision nutrition – need proper care, as these are the main precursors to ageing-related issues,” she said.
“Looking after these is important to prevent the ageing-related issues that could hinder healthy ageing, such as chronic diseases (linked to anti-ageing, brain, cardiovascular); nutrient imbalances (precision nutrition, homeostasis) and cancers such as gastric cancer (gut microbiome).”
These can be considered important key areas of focus for product development to support a healthy ageing process, such as BYHEALTH’s own development of specific probiotics to support gut health, natural senolytics (the destruction of senescent cells) to slow down the ageing process, personalised vitamins in capsules to provide precise nutrition and more.