China’s much-hyped market for vitamins and supplements is facing a steep challenge from traditional remedies from ginseng to deer antler, even as the sector’s rise fuels billion-dollar deals and share price surges.
The vitamins market is set to expand five percent a year to $20 billion in 2019, half its pace of growth since 2009. It’s being outstripped by a traditional medicine business that could be worth $40 billion by then – and is growing twice as fast.
That’s prompted vitamins firms from direct seller Amway to giant U.S. drugmaker Pfizer to look for inspiration from traditional medicine recipes going back thousands of years to succeed in China’s increasingly pivotal healthcare market.
“We’ve tried to learn the heritage and marry it with modern life sciences,” Jia Chen, vice president of Amway’s China research and development division, told Reuters.
The firm offers products for memory and liver health drawing on traditional ingredients such as ginseng and liquorice. It recently invested around $13 million in a traditional Chinese medicine research lab in the eastern Chinese city of Wuxi.
“Half of the population still believe in traditional ways and still go to traditional doctors or hospitals. This is a way of life and is passed from generation to generation,” she said.
Pfizer broke ground in June on a $95 million facility in eastern China to expand production of its Centrum and Caltrate brands. It’s now offering golden-hued gift boxes of vitamins, playing into the trend of giving expensive traditional Chinese medicines as presents.
Traditional remedies are used in China to treat everything from low energy to cancer, making for a business that’s broader than Western-style vitamins and health supplements. The industry’s ancient roots, along with rising disposable incomes, greater health awareness and supportive government policies, have helped stoke the market further.
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