Some Advice on Breaking into the Chinese Nutrition Market (Part 2)

Some experts and SFDA officials still insist on sticking with the current system. They said China will finally adopt the adverse event recording system, but it’s not the good timing currently. They also claimed that in terms of the manufacturers’ credit and government administration method, the current market is not mature enough for a totally open regulatory system, and we should do step by step. Professor Jin Zonglian, of the SFDA evaluation committee, suggested that the SFDA gradually adopt record-keeping system for health food products with substantiated functions, confirmed dosage and science based ingredients like aloe, epiphysin and others, for a total of 20 ingredients.

The debate regarding this is ongoing, as the SFDA have not yet finalized the Health Food Supervision and Administration Regulation. All the nutritional products marketers, including foreign marketers, are waiting and watching the situation develop. Efforts such as lobbying the regulation makers are necessary, currently but different from in the US, this kind of thing is not as widely known by the public.

Secondly, I’d like to discuss some points before entering the Chinese market. It’s evident that the Chinese nutrition market still has big potential opportunities for US dietary supplement companies. Some US brands have already entered China and became successful after years of effort, companies including; Amway, Nuskin, Avon, Sunrider, USANA, Herbalife and more. They had shown a strong presence in China market by their particular multi-level marketing strategies. We can also see other brands from Canada, Australia and New Zealand in China’s hyper markets and chain pharmacies.

As I have given my advisory services to some US and Australian companies who expect to enter in China market, some preparatory work can assist in avoiding potential trouble. Preparatory work usually includes studying Chinese nutrition regulations on label layout, ingredients compliance, health function claim, advertising and more. I suggest the companies that want to develop in the Chinese market keep their eyes on the regulatory reform and stay in close contact with their consultants. The regulatory reform is just the beginning, a lot of corresponding reform will be following in the future.

I always suggest to my clients that they can carry out their Chinese operations with the following steps:

1- Find a business partner in China. This partner should own a warehouse in good condition, offer effective distribution channel and have a creditable business history. If the US dietary supplement companies are big enough, they are better off establishing their own branch company in China. That would enable them full control of their Chinese operation.

2- Find a consultant who can assist with services concerning label layout and regulatory compliance so that they can avoid problems during customs clearance, shelf display and product advertising.

3- Find a consultant who can provide market research and work with marketers on how to position their niche market, discuss the comparative landscape, and decide what the proper marketing and pricing strategies will be. Is it direct-selling, conference selling, outlet display or seek assistance from a tele-center? All of these decisions should be made on a base of solid market research.

To read the first half of this article, follow the link below.

Andrew Liu is the chief consultant of CNutrInfo, a China-based consulting firm specializing in nutrition products Chinese label layout, China regulatory compliance and China nutrition market research. Email: [email protected]
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