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Business / Industry Watch

Foreign interest grows in aging society

By Liu Jie (China Daily) Updated: 2013-03-30 08:10

Pfizer Inc, the world's largest drugmaker by sales, for instance, announced at the end of January that it planned to target the China healthcare market with launch of a new supplement series.

"Pronutrients" is an advanced line of Pfizer's famous multivitamin brand "Centrum" and has been promoted to China only after its launch in the home market, the United States.

Pfizer now has several mature supplement brands in China, another being "Caltrate".

Entering back in 1993, Caltrate is now the country's biggest multivitamin supplement brand by sales, excluding direct-selling supplements.

Keith Choy, the regional general manager of Pfizer Consumer Health China and Hong Kong, told China Daily that considerable resources will be put into advertising, branding, product innovation and quality control to expand its sales in the consumer healthcare sector.

UK-based pharmaceutical giant GlaxoSmithKline Plc, meanwhile, is tackling the China market with what it calls an "umbrella brand" strategy, referring to a group of products being sold and marketed under the same brand name, which it claims saves costs and increases efficiency.

GSK is using its first anti-cold brand "Contac NT" to cover a series of consumer healthcare products, such as anti-congestant nose paste and throat-soothing herb drops.

Another global industry heavyweight, US-based Abbott Laboratories, officially split its nutrition and pharmaceutical sectors at the start of the year, to make each business more focused and independent.

In China, its nutritional business is dominated by milk powder, with more products such as food alternative powder and nutritious supplements, expected to be introduced soon.

Abbott is building a new $230 million dairy powder manufacturing facility in Jiaxing, Zhejiang province, and is introducing its top-selling consumer healthcare products from developed markets to China, especially those targeted at helping people cope with the aging process.

The China Health Care Association claims that China has overtaken Japan as the world's second-largest consumer of health supplements, such as vitamins, minerals and other natural products, only after the United States.

"International pharmaceutical companies have rich experience of healthcare supplement R&D and production, as many have been in the business for many years and own many major branded products," said Bruce Liu, highlighting Johnson & Johnson and GSK as the biggest players.

Industry figures suggest that around 20 percent of those two's revenues now come from the consumer healthcare sector.

Liu Zhanglin from the China Chamber of Commerce, added that Chinese consumers are already strongly associating with well-known, highly successful international brands, and are increasing their spending on them.

In general, he said, global pharmaceutical companies have a reputation for high-quality, reliability and trustworthiness, backed-up by strict manufacturing standards and quality control

Pfizer's Choy said: "We are a pharmaceutical company that does healthcare supplements, and we are developing and producing those in accordance with rules that are just as strict as they are for making medicines."

Liu and Choy both agree, however, that no matter the quality of the product, success in the Chinese healthcare products sector also depends heavily on being able to operate a mature distribution network.

Choy says Pfizer is focused on expanding its distributor network, and has set up a retail network across the country based on its medical sales network.

In addition to hospitals, pharmacies and supermarkets, it has a strong e-commerce presence and sells through cosmetics chains, such as Watsons.

He said its new supplement series will be mainly promoted in pharmacies, but network expansion and diversified channels are also planned to make it available in more cities across China.

Experts say the Chinese consumer healthcare market is far from fragmented, but there are already a large number of brands competing in many categories, such as traditional Chinese medicine, Western-styled supplements and natural herbs.

There are more than 20 Chinese and multinational brands attracting sales of more than $100 million in China, according to a recent report by McKinsey & Co.

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