Australian quality health supplements set to take off in China

Steve Ciobo (left), Australian Minister for Trade, Tourism and Investment, witnesses the signing of an agreement in March between BLACKMORES and Alibaba that will build trust in the food supply chain. Photos Provided to China Daily

Australian vitamin and health supplement company BLACKMORES has vowed to expand its presence in the Chinese market, which has seen increasing demand in the sector in recent years.

"Since entering China in 2012, BLACKMORES has built a reputation as a high-quality and safe brand with Chinese consumers," said Peter Osborne, managing director for Asia at the company.

"We place a very strong focus on the quality of our products and the full traceability of our ingredients, and all our products go through 30 quality checks before being released for sales.

"With a wholly owned enterprise in Beijing, and branch offices in Shanghai and the Shanghai Free Trade Zone, we have developed rapidly in this market."

BLACKMORES sells its products in Australia, New Zealand and 12 Asian markets.

So far, China is one of the largest overseas markets for the company, and its sales revenue in the country has reached A$200 million ($150 million) since it entered the Chinese market five years ago.

A high percentage of the company's sales revenue comes from e-commerce platforms, according to Osborne.

According to the China Healthcare Association, the dietary supplement market in China is expected to grow at 10 percent annually in the coming 10 years, and surpass Japan to become the second-largest dietary supplement market in the world.

The huge demand for such health supplement products from China has encouraged a large number of international healthcare brands to seek development in China.

In addition to selling its products through cross-border e-commerce, BLACKMORES also sells its products in about 3,500 offline stores across the country, such as Watsons, Mannings and other high-end chains.

"One of the challenges for foreign brands in the Chinese offline retail market is the lengthy registration process for vitamins and dietary supplements," said Osborne.

"However, with the new listing and filing process to be implemented on May 1, we see the process streamlined to enable Chinese consumers to have access to more high-quality imported products in the normal retail markets that meet China's regulations to ensure safety and efficacy. This will be in addition to products available via cross-border e-commerce, which has a more open regulatory framework," he added.

More offline channels

"We certainly have plans to open more offline channels in the future, which, of course, come with the changes of China's supervision regulations and policies. With such changes, we can bring more products into our offline channels," Osborne said, adding that the proportion of sales from online and offline channels is expected to be 50-50 in the next five years.

He also noted that BLACKMORES will take more measures to increase knowledge and understanding of Western vitamins and dietary supplements in the Chinese market, where these types of nutrition and health supplements are still a relatively new concept.

"In fact, Western dietary supplements are very familiar to people in Western countries, though they are not as well known in China. China, of course, has a very long history of traditional Chinese medicine and the concepts of 'prevention rather than cure' are very similar," said Osborne.

"Like many other emerging consumer goods, people initially will always choose to buy more familiar products, such as fish oil, vitamin C and glucosamine supplements. But over time, consumers will gradually buy more diversified products to supplement their personal nutrition," he added.

"We firmly believe in the importance of education, and we hope that every individual can better understand his or her health and well-being needs, and know how to choose the suitable nutrition and health supplements," said Osborne.

"For example, the BLACKMORES Institute, BLACKMORES' research, education and training organization, provides bilingual information for consumers. We also carry out various training activities for both consumers and retailers, which can help them receive detailed information, such as why they need such a supplement, how much should be taken and where the raw materials come from," he said.

"In this regard, we would like to work with the government, online and offline businesses, as well as medical institutions to further expand the knowledge and understanding of Western vitamins and dietary supplements," he added.

BLACKMORES currently sells 12 kinds of products in China's offline channels and 100 products through cross-border online channels in the country.

"BLACKMORES has more than 600 different products. With the changes of regulations from the Chinese government and the further opening of the market, we believe BLACKMORES will have very bright prospects in China," Osborne said.

wanghongyi@chinadaily.com.cn

About the company

BLACKMORES is Australia's leading natural health company with a history of more than 85 years.

The company develops products and services that deliver a more natural approach to health.

BLACKMORES applies a high-quality standard and rigorous process to guarantee all manufactured products exceed the Australian Therapeutic Goods Administration's standards. It traces every batch from global ingredient sourcing, raw material laboratory testing, raw material suppliers, manufacturing facilities auditing, to the finished product on the shelf.

It is committed to quality and has a team of more than 40 technical experts.

BLACKMORES Institute is the research and academic arm for all natural health solutions.

BLACKMORES sees China as a significant growth market. It sells products across multiple channels in China.

The company signed an agreement with Alibaba to collaboratively combat food fraud in China during Chinese Premier Li Keqiang's visit to Australia in March.

(China Daily 04/26/2017 page16)