5 things you need to know before start:
- Need professional guideline on the product launching and marketing tactics locally
- Develop sharp brand positioning among target consumers
- Consider expanding categories with a focus on immune function
- Be creative in the format and use scenarios
- Capture the growing potential in ecommerce, especially in Chinese market
Rise of the nutrition & health industry in APAC
Due to various factors including the pandemic, aging population, stressful work life, accelerating urbanization and increasing disposable income, consumers in APAC are increasingly pursuing a healthier lifestyle and diet habit. They prefer to choose healthier and organic food ingredients, as well as enhance immune system and body functions through food supplements and functional food & beverage.
In 2021, APAC accounted for 36% of the global market for nutrition & health, comparing to 20% and 31% in Europe and North America respectively. China and Japan, the two largest markets in APAC, represent 47% and 21% of the region in 2021. Both countries are expected to remain the main driver of APAC market.
Intense requirements for product registration, ingredients, and marketing wording
Unlike other daily consumer products, the sales and promotion of nutrition & health products are subject to strict regional-specific regulations. For instance, in Mainland China, “Blue Hat” certification from National Medical Products Administration (NMPA) is a must for food supplements to sell offline and domestically online (i.e. non cross-border) as well as to claim for specific health benefits. In Japan, Consumer Affairs Agency will review the efficacy and safety of health products before going on shelf. There is a designated range of specific content in the nutrition and food supplement product when importing in Korea, otherwise the product can only be imported and distributed as general food. Moreover, most markets in APAC region also require food supplements to be advertised as a non-drug substitute. Swedish brands should be aware of these strict regulations and be careful in using appropriate product launching and marketing tactics.
Shifting consumption trend
Consumers tend to choose healthier ingredients
The pandemic has aroused increasing focus on balanced diet, e.g. organic fruits and vegetables. The consumption of organic food and beverage in APAC region has reached 6.4 BUSD in 2021, with a rise from 9.5% to 11% of global market size since 2016. Besides that, consumers are inclined to pursue foods with healthier ingredients, for instance, low-sugar, low-oil and vegetable-based. Some Swedish brands have already been following this trend. Oatly has targeted APAC as the largest market for plant-based dairy products. It entered China since 2018 and has already opened over 4700 locations via branding with coffee shops. NICK’S no-sugar-added ice-cream has been marketing towards healthy ingredients and provides consumers an option of no-guilty snacks. Swedish brands should consider positioning their brands to reflect healthy a lifestyle and focus on educating local consumers of the health benefits of their products.
Enhancing immune system as the main demand for food supplements
The pandemic and public health policies have shifted the focus from disease treatment to precautionary measures, which in turn has driven consumers’ demand for nutrition & health products and supplements. Immunity-boosting product has become one of the most popular categories among APAC consumers. During JD’s 6.18 shopping gala in China, sales of immunity-boosting product under nutrition & health category increased 42 times from the previous year. In South Korea, red ginseng products accounted for the largest sales share in health category in 2020. What’s more, each market in APAC region has its own prior need for healthcare. For example, in Mainland China, products that help sleeping and enhance sports performance are more popular among consumers. Swedish brands could capture a larger share of the growing market by expanding product variety and marketing efforts with a focus on immune-oriented products.
Functional nutrition food and beverage in snack format in order to create more use scenarios
Nowadays, consumers are fond of taking in nutrition in increasing occasions in order to reduce health problem as much as possible under hectic lifestyle. As a result, there have been increasing number of functional nutrition products in innovative format especially attracting attention from the younger generations. For instance, Nelo probiotic fudge, GABA help-you-sleep chocolate coming from Japan, and Blueglass hyaluronic acid candy coming from China. AstaReal, a traditional Swedish astaxanthin food supplement brand, has also stepped up its innovation efforts after entering APAC market. By launching its gummy candy product, AstaReal has created a more enjoyable experience compared with taking capsules. For Swedish brands that might already lead the Scandinavian market, the key is to be creative when entering APAC, developing a more daily and casual use scenarios.
Offline remains the main sales channel
The offline channel remains the dominant channel for nutrition & health industry in APAC, accounting over 80% of total. The prevailing and traditional channels include department store, supermarket, offline pharmacy, and convenient stores. This can partially be explained by local preferences, for example in Japan, multitude of supermarket and convenient stores are 24hr available which enables the accessibility, and in Korea, consumers prefer to have a clear understanding about product through introductions from the offline stores.
Although the online channel still accounts for a minority of the total sales for nutrition & health food in APAC, online sales present a large potential going forward. The CAGR of online sales of the category in APAC is estimated to be 8% from 2021 to 2025. Several emerging ecommerce platforms have been growing fast as well. In particular, China has the most potential to grow due to local consumer behavior and well-developed digital ecosystem with e-commerce platform such as Tmall, JD, and Suning. There has been a trend that an increasing number of foreign consumer goods flock to ecommerce in China in order to initiate presence. Swedish brands are encouraged to explore region-specific market potentials of ecommerce with a focus on Mainland China.