This has caused China export to the US to drop to US$300m. Exports to the US now consist of 15.9% of China’s health food and ingredient exports.
The is according to the latest report by the China Chamber of Commerce for Import and Export of Medicines and Health Products (CCCMPHIE).
The CCCMPHIE explained that the trade war had reduced the competitive price advantage of China’s exports vis-à-vis the US market.
China’s export of vitamins and fish oil soft gels related products were some of the categories most affected by the trade war, where export value of these two categories dropped by 5.9% and 7.1% respectively.
Despite the trade war, the US remains China’s biggest export destination.
Overall, China’s import and export of health products reached a value of US$5.28bn last year. Exports grew 12.7% to US$1.88bn while imports were up 12.8% to US$3.4bn.
Hong Kong second
Hong Kong is now second to the US in terms of China’s export destination. China’s exports to Hong Kong last year were worth US$290m, up 71.8%.
China’s three other key export destinations last year were Japan, Myanmar, and Thailand, with exports value recorded as $110m, US$86m, and US$82m respectively.
Together, these five markets formed a market concentration rate of 46.2% for China’s exports.
Jiangsu aland, Sirio Pharma, and Sichuan-based KinOmega were the top three health foods exporting companies.
Province wise, Jiangsu, Guangdong, Shandong, Shanghai, and Zhejiang, being the traditional players in the health foods industry, exported the most products.
Imports preference
In the last decade, China’s health foods imports had shot up from US$610m in 2010 to US$3.4bn last year, with a CAGR of 21%.
Australia remained China’s biggest importer for the second year running, where imports grew further by 9.2%, followed by the US, Indonesia, Thailand and Germany.
China’s imports from these five countries were US$730m, US$680m, US$240m, US$230m, and US$220m respectively last year. The market concentration rate of China’s imports from these countries hit 61.9% last year.
“From here, it can be seen that Chinese consumers’ market preference is still relatively concentrated (on a few markets),” said the report.
Except for Germany, all the other four key importing countries were importing more products to China last year.
Imports from Germany to China dropped 19.6% while imports from Indonesia saw the greatest growth, up 48.6%.
The report explained that the drop from Germany was due to a low market awareness and not yet establishing itself in China with a well-known national brand.
Overall, the imports of health foods into China continued to grow due to a higher living standard in the country, as well as issues such as stringent barriers to entry for new products within China’s physical retail market, the report noted.
It added that the implementation of a new cross-border e-commerce (CBEC) regulation since January 1 last year and addition of pilot cities has boosted the confidence of health foods companies which highly rely on the CBEC channel to sell its products in China.
Edible bird’s nest rising popularity
Categories wise, China’s imports of edible bird’s nest have been growing each year.
According to data from China customs, imports of edible bird’s nest was up 43.8% yoy to reach US$320m last year.
South East Asia is a key edible bird’s nest producing region. Last year, we reported how companies from Malaysia and Cambodia were hoping to make their mark in China.
Other highly sought-after categories included vitamins, fish oil soft gels, calcium supplement, protein powder, collagen, and probiotics.