International nutritional product makers on happy hunting ground as Chinese consumers put priority on safety and quality

Though branding has undergone a sea change in China over the past few years, there is still no denying the fact that international brands enjoy considerable advantages in China over domestic brands.

Christine Holgate, chief executive officer and managing director of Blackmores Ltd. [Photo/China Daily]

Nowhere is the trend more evident than in the health products sector, where a series of safety and health issues in recent times have propelled demand for foreign brands that are leaving no stone unturned to boost revenue.

Christine Holgate, chief executive officer and managing director of Blackmores Ltd, an Australian nutrition products maker, says: "It is the perfect time to explore the Chinese market."

Established in the 1930s, Blackmores has more than 400 natural nutrition products including fish oil, vitamin C, and vitamin B complex under its belt. Last month, the company formally entered the Chinese market by teaming up with the Hong Kong-based convenience store chain Watsons Personal Care Stores Inc and Tmall, a major online shopping website in China.

"Our target customers include modern working class people in China who lead a busy life, as well as those who want to improve their inner and outer beauty in a natural way," Holgate says.

According to statistics provided by the National Development and Reform Commission's Public Nutrition and Development Center, more than 260 billion yuan ($40.72 billion) worth of nutrition products were sold in China last year.

Blackmores is not the only Western nutrition company that decided to tap the huge market in China. Last year, General Nutrition Centers Inc, a manufacturer and retailer of health products in the United States, started selling its products in major Chinese cites like Shanghai, Guangzhou and Shenzhen.

Holland & Barrett, the biggest health food retailer from the United Kingdom, opened two stores in Shanghai last month.

"We believe that there is a strong but unmet demand from Chinese consumers for good quality natural products, especially from the aging and more affluent population," Holgate says.

Unlike their European and US counterparts, Holgate says Blackmores will not open its own chain stores. It will instead rely on "the most effective routes to boost revenues in China".

Besides its retail partners, the company is also establishing direct linkages with new platforms such as e-commerce and TV shopping which are slowly becoming popular with Chinese customers, the company says.

"I want Blackmores to be remembered as a health product developer, and not as a retailer," she says.

Peter Osborne, director of Blackmores Asia, says the company's strategy is to focus on multiple channels to grow revenue.

"We are entering the market with Watsons because we know them well. We also have excellent rapport with them."