The growth also coincided with the increase in average spending on vitamins, minerals, and dietary supplements among China consumers, which went up 11.5 per cent to US$23.30 last year. Still, the amount was only 22 per cent of what American consumers were spending on average per person.
BYHEALTH announced its financial results for the year of 2023 on March 19.
The Shenzhen stock exchange listed company said that operating revenue last year was up 19.66 per cent yoy to RMB$9.41bn (US$1.31bn).
Net profit attributable to shareholders rose 26.01 per cent to RMB$1.75bn (US$242.6m).
The level of growth reflected industry wide performance, said chairman Liang Yunchao.
Citing data from oIBP, he said that China’s vitamins, minerals, and dietary supplement retail had increased 11.6 per cent to RMB$225.3bn (US$31.3bn) last year.
BYHEALTH maintained its top spot with a market share of 10.4 per cent, while the second and third largest players had market shares of seven and 5.4 per cent.
Powder the powerhouse
The persistent demand for products that support immune health was the key driving force fuelling market growth, according to BYHEALTH.
For instance, its protein powder sold under the same name BYHEALTH saw sales jump 21.48 per cent to RMB$5.4bn (US$750m). Similarly, its probiotic brand Lifespace increased by 46.84 per cent to RMB$445m (US$61.8m).
The company said that the rapid growth was mainly due to a higher health awareness among Chinese consumers.
In fact, protein products, specifically soy protein isolate, and whey protein were permitted to make the health claim “strengthening immunity” since October 1 last year.
BYHEALTH said the popularity of both its protein and probiotic powder had led to a 35.72 per cent increase in its powdered supplement production volume. Sales volume of its powder supplements also went up by 30.27 per cent.
However, the sales and production volume of its capsule format supplements had contracted by 5.54 per cent and 6.48 per cent respectively.
Sales of its tablet format supplements also declined by 1.19 per cent in terms of the number of tablets sold, although production volume was slightly up by 0.36 per cent.
E-commerce continues to expand
Liang highlighted that e-commerce continued to emerge as the preferred channel in purchasing dietary supplements among Chinese consumers, with the channel responsible for 56 per cent of the sales in China’s VDS sector.
Last year, the channel expanded by 30.7 per cent, with the total transaction value of vitamins and dietary supplements exceeding RMB$100bn (US$13.9bn) last year.
Much of the growth came from the first two quarters of last year, where the e-commerce channel expanded at a rate of over 46 per cent but this later slowed down to 12.5 per cent in Q4.
Direct sales came in second at 20.8 per cent, while pharmacies, modern trade, and other channels contributed 16.4 per cent, 1.4 per cent, and 5.4 per cent.
Sales coming from both direct sales and pharmacies have however decreased, with the latter seeing a 5.4 per cent decline, according to data from Sinohealth CMH.
For BYHEALTH, online sales grew 27.53 per cent, while its offline retail, which contributed 58.10 per cent of its entire sales in China, also went up by 12.39 per cent.
Works on new function claims
BYHEALTH is working on research that supports new function claims such as lowering homocysteine – an amino acid that could signify the presence of heart disease or homocystinuria when in high levels.
Another function claim of interest to the firm is lowering advanced glycation end products or AGEs.
Last year, BYHEATLH was the first company to have applied for new health foods functional claim – a new framework introduced by the Chinese government for approving new function claims from the existing list of 24 approved claims.
The claim submitted by BYHEALTH was “maintain normal platelet aggregation function and benefit blood flow health” for the water-soluble tomato extract branded Fruitflow+.
Liang added that the company was working on new raw materials, as well as areas such as gut health, cardiovascular health, and anti-ageing.
Glycosaminoglycans (GAGs) collagen peptide is an example of a new raw material that the company had developed, which was used to upgrade its series of beauty-from-with products sold under the brand Yep.
