The Rising Sun of Sports Nutrition Market in China

What is Sport Nutrition?

First of all: what are we referring to when we talk about sports nutrition food? Here is a useful definition provided by the most recent relevant food standard of China (GB 24154-2015 National Food Safety Standard): “specially processed food that meets the physiological metabolic states, sports performance and special needs for certain nutrients by sports population (who participate in physical exercise of medium intensity or above for 30 min or above each time & three times or above per week)”. However, when we talk about Sports Nutrition, we should distinguish between different categories. Some sports nutrition has the purpose of enhancing athletic performance, like products specifically designed to increase Speed and Power or Endurance. Others are classifiable as energy supplements: they are usually consumed during, immediately after or before sport activity. The last category is Post Exercise Recovery Food Supplements that help recovering faster after physical activity.

Worldwide and Chinese trends

When such products were first introduced to the market, the percentage of population engaged in regular physical activity was very small. At that time, sports nutrition products were considered professional and “niche” products used to satisfy the demand of a small market composed of athletes and experienced amateurs.

The subsequent development of the market happened because of the diffusion of regular exercise habits in the population, with younger consumers in China’s first and second tier cities adopting health-conscious lifestyles and embracing western-style fitness culture. Other prompting factors are the bigger propensity to spend of the ageing population, the contrast to obesity and other diseases of affluence, related government policies and public spending. We shouldn't forget that the State Council on June 23, 2016 issued a plan to carry out a national strategy to improve the physical fitness and health level of the whole nation, aiming at a 1.5 trillion RMB ($225 billion) investment on sports and fitness by 2020.

Following the massification of Sports Nutrition, these products became more available to the general public and marketed to many previously unreached sectors of the population. One of the outcomes of this process is that some types sports nutrition are getting more and more included in the bigger category of wealth and wellness products: the border between the two is blurring.

Some Characteristics of the Sports Nutrition market in China

The biggest and most mature market for Sports Nutrition Products is North America and, to a lesser extent, the Western Europe. Other areas (China included) joined the party at a later stage but were involved in similar dynamics. The Chinese Market of Sports Nutrition showed spectacular growth rates in last couple years (reaching a record 19% in 2012) but the growth rate is apparently slowing down. However, market size is what makes investments desirable, as it reached 74 million dollars in 2015.

Even so, we shouldn't ignore some of its peculiar characteristics. The first is homogeneity. For example, Protein Powder is the dominating product of the sports nutrition market, accounting for a 91% share of the market, with protein bars accounting for a big part of the remaining share. The second is high concentration. Domestic companies currently occupy the top three positions of this highly polarized market and this de facto oligopoly won't be easily challenged by new players. The third is what makes this challenge feasible: the high level of development and diffusion of e-commerce in everyday life. The development of cross border e-commerce makes it easier for sports nutrient products access to market easier as more websites make it possible to buy foreign products online. In addition, some related regulations are easing. Foreign companies have huge opportunities in this maturing sector, but they would need to first cope with capital, technical and regulatory barriers, such as finding appropriate marketing strategies. Among the others, one of the most important rules concerning labeling is the GB 13432-2013 National Food Safety Standard Labeling of Prepackaged Foods for Special Dietary Uses.

The market for sports nutrient products is still in its initial stage of development and it has not yet fully expressed its potential. To get a better sense of the market trend, keeping an eye on related government policies and investments and the widespread e-commerce, we can expect a dramatic growth of the sports nutrient products. Therefore, this is a great moment for new players to enter the Chinese Sports Nutrition Market!