HIGH GROWTH MARKET WITH GREAT POTENTIALS

In the 21st century, after considerable social and economic development, people are paying more attention to general health and well-being. The healthcare industry has thus become the most active of industries with high growth and many new players have entered this market. It is also among the most promising industries with high margin and steadily growing demand, almost regardless of the macro-economic situation. Based on the experience of developed countries, where GDP per capita exceeds USD 6000, the local healthcare industry is set to experience a period of rapid growth. China GDP per capita reached USD 6000 in 2011, and total sales of healthcare products in 2011 reached over 300 billion RMB. Since 2011 the healthcare industry has been growing at over 20% per year, and it is expected to exceed 450 billion RMB by 2020.

FIGURE 1: GROWTH OF HEALTH PRODUCTS INDUSTRY 2001-2016

With China’s working population GDP per capita exceeding USD 8000 in 2014, people now have higher and more diversified demand for living standards and health. Since 2008, senior citizens of 60 years and over have exceeded 300 million, and people of 50 years and over now represent 33% of total Chinese population. Demand from senior citizens is increasing dramatically, and people are paying ever more attention to illness prevention. At the same time, sub-healthy population in China exceeds 700 million, 60-70% of total Chinese population. The majority of those are people 35-55 years old, who generally have high and stable disposable income and high willingness to spend on health related products. Living a healthy life has become a trend, if not yet a fashion in Chinese society. Experience from developed countries indicates that spending on preventative health products can significantly reduce medical spending, not only for individual patients, but also for society as a whole. In recent years, China’s government has established a series of laws and regulations for the healthcare industry, including healthcare products registration and administration standards. These policies ensure the sustainability and regulation of the healthcare products industry, providing a better environment for both producers and consumers. Leveraging information technology has increasingly become a trend in the healthcare product industry. Ease of obtaining healthcare information, products and services through mobile applications has enabled a wave of new companies and business models to emerge. Breakthrough in biotech provides further momentum for the healthcare product industry. Developments in Genetics, DNA and biology have made it possible to develop new products and service, tailored to age, gender and health. Decrease costs enable those products and service to be accessible to the general public.

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