Exports are booming. Over the last two years, Australia has seen formal exports of its complementary medicines grow by 36%. Shipments to the wider Asian region have doubled, showing that there is continued healthy demand for Australian products. Over half the counties in the top ten list of destinations are in the Asian region.
South Korea, which saw a 14% volume increase in complementary health deliveries from Australia last year, has now overtaken New Zealand as Australia’s top export market, though New Zealand itself has also seen a sizeable increase in imports. Hong Kong alone has witnessed a 122% volume increase over the last year.
“Recent growth in the sale of vitamins in Australia has been driven by rising demand from offshore consumers, particularly those from China," investment bank JPMorgan Chase recently noted in a report.
This charge is being driven by the industry’s reputation for products that meet the highest standards of quality and safety. At the same time, changing Asian demographics have been presenting considerable, never-seen-before opportunities for businesses looking to enter the many and varied markets to Australia’s north.
According to Karen Hocking, head of government relations and industry development at Complementary Medicines Australia, an industry lobby group, Australian companies are in a fortunate position.
“Complementary medicine products meet the basic human needs of health and beauty, in a time when global trends, such as concerns with food security and improved communications, are supporting Australian firms to realise the remarkable opportunities within Asia,” she said.
It is estimated that if barriers to trade and investment affecting complementary medicine products in the Chinese market were removed, the retail market for imports of supplements could more than treble to US$916m. Indonesian imports could increase six-fold to US$78.5m.
“In recent years, the Australian government has been focusing on deepening Australia’s economic ties with countries within our region, which is expected to greatly assist our industry. The Australian complementary medicines industry is also keen to see a future focus of free trade negotiations on helping to address behind-the-border issues,” Hocking added.
Already, over 60% of Australian complementary medicine companies are engaged in exporting and the number of businesses looking to export is growing rapidly.
One firm, Blackmores, has already gained a significant foothold in Asian markets. Indeed, the health supplement manufacturer was the top performing stock on the Australian Stock Exchange’s benchmark ASX200 last year, with its 620% growth in 2015 coming on the back of surging sales in Asia.
"In China and many parts of Asia, where traditional medicine is universally used, you never have to explain the benefits—it’s just a Westernised and clean version of traditional remedies," Christine Holgate, Blackmore's chief executive, told the Nikkei Asian Review.
Blackmore’s has seen its share of sales from Asian countries grow from 2% in 2010 to around 33% last year, and this may reach 50% in the 2016 fiscal, according to Holgate.
From April 27-29, Karen Hocking will elaborate on the Australian minerals boom at Food Vision Asia in Singapore, the first time the professional forum will take place in this region.
The event, which is organised by William Reed Business Media, publisher of FoodNavigator-Asia, is well-established in Europe and America, where annually it brings food industry innovators, strategists and analysts together to discuss market challenges, business opportunities and what today’s consumers really want.
The programme for the Asia event was released recently, and includes a session led by Hocking, who will look the underlying drivers of demand for Australian complementary health products. She will also offer insights, observations and lessons learned the hard way, with examples of success from Australian trail blazers.
For more information on Food Vision Asia, visit www.foodvisionasia.com