Myth about the Chinese marketplace: Are Chinese people really slim?

Last year, an Australian weight loss company was interested in selling its products in China. A senior partner in my firm has raised a very interesting question—“Chinese look so slim to me. Is there a demand for slimming products in China?”

In the 1980s, the Chinese were regarded as being among the most fittest people in the world in terms of body mass. Today, they face serious health issues due to a high-calorie, high-cholesterol diet over the past twenty years. Unfortunately, this condition is a by-product of increasing Chinese economic development and a vastly improved quality of life. A recent study revealed that 92 million Chinese adults have diabetes, and nearly 150 million show early symptoms of the disease. Between 70 and 90 million Chinese are actually clinically obese (mostly in urban areas), and between 6 and 10 million adults become obese each year. Most alarming is that as many as 200 million Chinese are predicted to become morbidly obese by 2015.

Obesity is also a major problem for Chinese children. In a city in southern China, more than 12.5 percent of the city’s 350,000 students in primary school and high school are obese. This situation has resulted from eating Western-style fast food and getting very little exercise.

So, is there really a demand for health food in China?
In 2009, China imported US$110 million in health food products, and some analysts predict that over the next five years China will become the top-ranked country in the world, followed by the US, for offering the greatest opportunities for companies that sell natural health products. The Chinese health food market is projected to reach US$19 billion by 2010 and US$65.9 billion by 2020.

What challenges do Western companies face when trying to sell their products in China?

Import registration documents are required before health products can be brought into China, and the country’s laws often tend to be obscure, inconsistent, and arbitrary. This confusion may actually prevent Western companies that are unfamiliar with such laws from doing business in China. At present, the import registration process takes as long as two and a half years and usually costs at least $100,000, depending on the products.

To understand what is required to pass import registration, you are advised to do two things before making a major investment: 1) work with a specialist who will handle application paperwork and 2) do research to determine if your product and its ingredients are currently approved by the SFDA (State Food and Drug Administration of China).

What is necessary for success in the Chinese market?

Your approach to selling in China should be a long-term effort, not a shortcut, such as hoping someone will buy your products and that everything else will somehow be OK.

Companies that take time to learn about the marketplace and focus on building partnerships with local Chinese companies are those that will be successful.