GNC hits Chinese pharmacies with four newly approved ‘blue-hat’ products

The products which have obtained the ‘blue-hat’ status include 1) a melatonin and vitamin B6 capsule, 2) a co-enzyme Q10 and natural vitamin E softgel, 3) a glucosamine, chondroitin sulfate and calcium capsule, and 4) a conjugated linoleic acid, green tea, and l-carnitine softgel.

GNC is partnering with Renmintongtai, the pharmacy chain of Chinese firm Harbin Pharmaceutical Group, to sell products.

The latter, which has acquired a 40.1% equity stake in GNC, has purchased the registration, import approval and exclusive sales rights in China for six of GNC's products.

CEO of GNC China, Samuel Huang, said during the launch event that the partnership would enable Chinese consumers to obtain more high-quality health foods and efficient services through the pharmacy chain.

The four products are mainly catered to the white-collar workers and the elderly, as their benefits range from improving sleep quality, assisting with weight loss, protecting bones and joints, and enhancing immunity.  

The ‘blue-hat’ registration is a stringent and time-consuming process for health supplements to be sold in China via the brick-and-mortar retail route.

As such, most foreign brands preferred to tap on the cross-border e-commerce (CBEC) route instead when entering China.

However, as a response to the risk of changes to China’s CBEC policies, overseas brands are trying to branch out of CBEC and adopt an omni-channel sales model.

Last year, 342 health supplements from 268 manufacturers have obtained the ‘blue-hat’ status, data compiled by China’s regulatory consultancy firm Chemical Inspection and Regulation Service (CIRS) has shown.

In 2018, more than a fifth (23%) of supplements and functional foods in China were sold via pharmacies, according to statistics​ from China Chamber of Commerce for Import and Export of Medicines.

Younger generation shows potential ​

On the other hand, the retailing pharmacy, Renmintongtai, pointed out that China’s vast market opportunities lie in the younger generation of consumers.

Those born after 1990 are slowly becoming the main consumers of health supplements, and pharmacies should cater to their needs, said Shiwu Ai, vice GM of Renmintongtai Pharmaceutical and GM of Renmintongtai Pharmacy Chain.

The insight echoed the findings of a recent Tmall report​, which pointed out that consumers born post-1995 were the core spenders of health-nourishing foods last year and the trend is expected to continue this year.