China seems to have gone mad for everything Australian. In many ways (as I have argued before) 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.
Indeed, China the second-largest pharmaceutical market is expected to be worth $167 billion by 2020. 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.
A wave of scandals has really affected the image of Chinese health products and boosted Australia’s reputation in this sector.
Why Australian Health Care Products Need to Sell Online
The answer for Health Products is to drive visibility, reputation and ultimately sales online. E-commerce now accounts for over 45% of all product sales in this sector, impressive figures by any global standards.
An example is ‘Pharmacy 4 Less’, a medium sized business with a number of chains across Australia. They begun life in Sydney before expanding to South Wales, Queensland, Victoria & Western Australia. The company have now ‘set up shop’ online on China and devoted resources to building their presence on the Chinese net.
The results have been successful with Rania Awad, the companies GM estimating that e-commerce accounts for 15% of total revenue. ‘In a way, the Chinese consumer found us, or more broadly speaking, Australia’, Awad said.
An example sample ad by Pharmacy 4 Less.
Health Products Have to go Digital
There is no way to sell via other channels, 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 have to wait 3 years for regulatory approval. On cross-border these restrictions are not in place, you can set up & start to sell without licensing .
Vitamins & Skin Care are Market Leaders
Vitamins & Skincare are the main sellers for Pharmacy 4 Less in China. The key is to test the market and see which products sell the best after an investment into branding and reputation, once sales figures are analysed you can devote a larger portion of the budget into the most effective product lines.
‘Blackmore’ have been a huge success, daily they appear at the top of Tmall Global & have sold more than 30 000 units per month.
What Sort of Supplements are Popular on Crossborder?
As well as vitamins, a report from Austrade indicates that other popular supplement products include:
- Grape seed extract
- Fish oil
- Ginkgo biloba and ginseng
- Protein powder
- Co-enzyme Q10
- Weight loss supplements
Combination supplements tend to be preferred over single vitamin products. Australian brands already selling in China include Blackmores and Nature’s Way.
Blackmore Sell More 30 000 Units per Month on TMALL.
This is with no special event, consider the sales volume at a special e-commerce event like 11/11, China’s infamous singles day. This is not simply because they are on Tmall, it’s not a ‘magic bullet’, it’s because they have a very effective branding & marketing campaign.
A range of Blackmore products listed on Tmall.
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Why Chinese consumers are Buying Health Supplements
Supplement purchases have been driven partly by increased awareness of health and nutrition, notes Austrade.
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 any product launch in China.
Chinese consumers are some of the most active and discerning, they will research extensively online before deciding what to purchase.
Awad from Pharmacy 4 Less spoke of; ‘very intense engagement within Chinese social media channels, it’s all about the brand image, it’s difficult to repair a brand image so everything has to be perfect’.
A Variety of E-Commerce Platforms
For Health Products you can consider; Tmall, Taobao Global, WeChat Stores, Youzan or Jingdong (to name a few). It’s important to select the most effective platform based on your budget as the set-up costs can vary greatly.
Cross-border is not a ‘magic bullet’ for health brands in China, you need to invest in a quality marketing strategy to drive traffic and sales. Ensure you budget for this. Despite the best visibility, without branding sales conversions will not be sufficient.
Consider Your Reputation in Chinese Forums
Forums are wildly popular in China, many consumers turn to forums such as Tmall, Baidu Tieba, Zhidao or Tianya to drive sales, posting comments from user to user is key, Consumer recommendations are powerful so focus on generating positive reviews and starting threads in forums that are engaging, the rate of comments will up-rank the post improving its visibility.
Chinese speak on Tmall comments comparing thoughts on the Blackmore Product