Are online supplement sales in China set to peak?
A recent report by market intelligence agency Mintel suggested online retail in China could plateau in terms of per capita spending to 2019.
But according to Carl Gibson, CEO of Complementary Medicines Australia (CMA), it's too soon to tell if online sales of supplements are nearing a peak, and Chinese demand for Australian products will continue to support the sector.
He told NutraIngredients-Asia: "Complementary medicines are still seeing growth in online sales. I would say it's too early to predict a peak, as consumer demand continues to grow for Australian products because of their reputation."
Growth factors
He attributed China's supplement sector growth to three main factors: its ageing population, growing middle class, and increased access to technology.
Gibson added: "Exports of Australian complementary medicines to China are continuing to grow. Three years ago, we exported just 1.5% of all products to China.
"This year, it's 54% of all exports, and (China is) our number one market for exports, thanks in part to the Australia-China Free Trade Agreement and the fact that Australian products are highly sought after because they are regulated with the highest standards.
"Some researchers and industry commentators have predicted that Asia has the potential to be a $40bn market in the vitamins and supplements category — so there is still a great deal of room for growth in our sector."
Peak performance?
According to Mintel, China's overall online retail market has reached a critical mass.
Business-to-consumer (B2C) online retail is expected to reach 60%+ of total e-commerce sales in 2017, with mobile online retail expected to make up 80%+ of the B2C retail category.
Mintel estimates that per capita online retail spend will grow to 45.7% of total per capita retail spend by the end of 2017; however, per capita online retail spend is predicted to hold steady between 2017 and 2019.
Mintel's APAC research director Matthew Crabbe said, "Mintel research reveals that online per capita spend in China is close to reaching a peak, and there are a few reasons why this is happening. One issue is that consumers are increasingly buying experiences and services online, rather than products.
"The other issue is that consumers are already adapting to 'new retail'; they are embracing greater integration between online and in-store shopping. This will mean much tougher competition between retailers.
"It will also likely mean more pressure for further consolidation in the market, resulting in more mergers, acquisitions and strategic partnerships."
