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Strong Chinese regulation for health products ensures desire for ‘Brand Australia’

Strong Chinese regulation for health products ensures desire for ‘Brand Australia’

China seems to have gone mad for everything Australian. In many ways we are in a golden age for ‘Ozzie’ products in China. China now boasts over 350 million middle class consumers with a changing set of priorities and expectations, particularly when it comes to Health Care Products.

A wave of scandals has really affected the image of Chinese health products and boosted Australia’s reputation in this sector. Healthcare is one of the first priorities in terms of improving product standards & has created a strong demand for international brands that are perceived as high quality when compared to Chinese, local versions.

WHY AUSTRALIAN HEALTH CARE PRODUCTS NEED TO SELL ONLINE 

The answer for Health Products is visibility and reputation to ultimately drive sales online. E-commerce now accounts for over 45% of all product sales in this sector, impressive figures by any global standards. Digital is the only way for marketing & sales. Why?

If you apply to sell outside of cross-border platforms you need to wait for licensing approval in a highly regulated market, if you are successful you should wait 3 years for regulatory approval. On cross-border these restrictions are not in place, you can set up & start to sell without licensing.

WHY CHINESE CONSUMERS ARE BUYING HEALTH SUPPLEMENTS

Supplement purchases have been driven partly by increased awareness of health and nutrition. For many, supplements represent a simple way to improve general health and wellbeing, meet nutritional deficits, and provide a form of medication for those who are unwell. Given the emphasis on traditional medicine in China, vitamins and herbs are a familiar and appealing way to aid health. The increased normalisation of self-medication, along with growing disposable incomes, has also encouraged the health supplement boom.

 NO BRAND… NO BUSINESS IN CHINA

The Chinese buy brands, especially in this sector. They need to develop trust and perceive the products in a positive light. Simply exposing your products on e-commerce platforms is not enough. An effective marketing campaign therefore makes or breaks. Importantly, imported health foods must be marketed in the producing country for at least one year before being registered or notified in China. All application materials must be in the Chinese language with materials in the original language attached as reference. All the materials must be translated into Chinese if originally in a foreign language. A Chinese notary needs to attest that the translation is consistent with the original.

 

Despite concern amongst Australian investors that some consumer goods companies are overexposed in the vast market, China remains a huge opportunity for Australian companies that is unlikely to go away anytime soon. When the Chinese think of Australia, they also envision nutritious food and a healthy population unlike the goods produced in their own country. See this link for more details https://www.theguardian.com/world/2009/jan/22/china-baby-milk-scandal-death-sentence

WHY CHINA?

First, when selling to China, it’s crucial to have a brand that has first achieved consumer credibility in Australia. Without this, “Brand Australia” just doesn’t work. There have been many less successful attempts to launch an adjacent product, even from brands whose core product offering resonates strongly in China. But unless a product has made it first in Australia, it will very likely be viewed as a “Made for China” knockoff.

Secondly, winning in China means tailoring a company’s approach on a city-tier and regional basis. For example, companies should adapt the brand messaging for Chinese consumers at the local level. In the early stages of growth, companies need to remain agile and make measured bets, using China as an opportunity to systematically test and learn.

For consumer goods companies seeking profitable growth, now is the time to lay out a strategy for winning in China. But it takes thoughtful attention to four critical steps: making the brand credible in Australia first, creating demand with China’s consumers, choreographing a channel and distributor strategy, and building the right capabilities to support growth. That’s what it takes to make it as an Australian brand in China.

FINDING A QUALITY LOCAL BUYER

Australian Health Care Products certainly are in vogue, the key is to act fast, the market will only become more competitive when it comes to visibility on the best Chinese Characters. You also need a specialist local partner to guide you through this very different e-commerce system.