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China's Growing Health and Wellness Market Is Poised to Reach Nearly $70 Billion by 2020

BCG Survey Finds That China's Consumers Are Self-Medicating and Willing to Pay More for Brand Names and Higher-Quality Products

BEIJING, CHINA -- (Marketwired) -- 02/25/14 -- Chinese consumers are the most health-conscious people in the world, according to a new report by The Boston Consulting Group (BCG). The report, titled Capturing a Share of China's Consumer Health Market, is being released today. It offers nine key insights and six timely strategies that can help guide companies seeking to capitalize on this growing market.

BCG's Center for Consumer and Customer Insight (CCCI) surveyed 2,600 Chinese consumers aged 18 to 65, from the middle and affluent classes, and from large, medium, and small cities across the country. The research revealed that Chinese consumers are increasingly health conscious, buying a wide variety of products to treat common ailments, boost their energy, and strengthen their immune systems. The reasons for this growing trend are many: rising incomes, the stress effects of urbanization, an aging population, and the country's ongoing issues with food safety and quality.

"Almost half of the Chinese consumers we surveyed said they feel subpar because of lifestyle factors, such as work pressures, family obligations, and long work hours," explained Carol Liao, a BCG senior partner and coauthor of the report. "Common complaints were insomnia, fatigue, lack of energy, obesity, and frequent illness." Other insights from the report reveal that traditional Chinese medicine is popular with consumers of all ages, not only the older generation; Chinese consumers often lack knowledge about health and wellness treatments and don't trust their claims; brands are powerful, and their reputation matters; most consumers make final purchase decisions on-site; and although the Internet isn't an important purchasing channel for vitamins and over-the-counter treatments yet, it is fast emerging as one.

Strategies for Winning

"For manufacturers of health and wellness products, Chinese consumers present an increasingly attractive market," notes Chun Wu, a BCG partner and coauthor of the report. "But before jumping in and committing valuable resources to secure a foothold, most companies are wrestling with a variety of strategic issues, such as which consumer segments to target, what products to offer, how city size affects consumer behavior, and which distribution channels to use."

The report suggests that companies seeking to make inroads in China's highly competitive market choose their battlefields wisely, focusing on segments that play to any advantages in scale, brand strength, product efficacy, or expertise. Companies must also build their brands; educate and inform consumers; manage retail outlets aggressively; get ready for e-commerce -- especially to sell vitamins and supplements; and understand the role that city size plays in consumer behavior.

A copy of the report can be downloaded at www.bcgperspectives.com.

To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or [email protected].

About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 81 offices in 45 countries. For more information, please visit bcg.com.

About BCG's Center for Consumer and Customer Insight
The Boston Consulting Group's Center for Consumer and Customer Insight (CCCI) applies a unique, integrated approach that combines quantitative and qualitative consumer research with a deep understanding of business strategy and competitive dynamics. The center works closely with BCG's various practices to translate its insights into actionable strategies that lead to tangible economic impact for our clients. In the course of its work, the center has amassed a rich set of proprietary data on consumers from around the world, in both emerging and developed markets. The CCCI is sponsored by BCG's Marketing and Sales and Global Advantage practices. For more information, please visit www.bcg.com/expertise_impact/capabilities/center_consumer_customer_insight.

About bcgperspectives.com
Bcgperspectives.com features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content -- including videos, podcasts, commentaries, and reports -- can be accessed by PC, mobile, iPad, Facebook, Twitter and LinkedIn.

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