Analysis on China’s Blood Enrichment Products Market

Products for blood enrichment have distinct characteristics in China’s health market. They are, for one, the most advanced products available in the Chinese healthcare market, and products for blood enrichment have been classified into two categories of regulation that are medicine and health food.

Second, the ingredients of products for blood enrichment fall into three major categories, which are chemical compounds, common foods ingredients and Chinese herbs, such as angelica and donkey-hide gelatin. Additionally, as a result of continuous advertisements, people are now aware of the existence of three kinds of products for blood enrichment with regards to effectiveness, including pure blood enrichment as well as the blood and Energy Dual Enrichment and women’s body strengthening.

It is possible to say that China’s blood enrichment market is the result of a large amount of consumer education in the last 10 years. The medicine portion of the market is worth around RMB 2.25 billion (US$ 260 million) as opposed to the health food segment is around RMB 2 to 2.5 billion (US$ 260 to 330 million).

Products

For products that enhance blood flow health food products, the category of health food has been the most effective contributor to the market to date. According to a study in the early months of 2006, it was estimated that there are 600-700 blood enrichment food companies in China and leading national players like Red Heart King Group, Join care Pharmaceutical Group, Hong Fu Loi International, Harbin Pharmaceutical Group Sixth Pharm Factory, Hengan Group and Yangshengtang Group, and tens of the most renowned regional brands.

The market for blood enrichment medicines was less competitive in comparison to the food segment for blood enrichment. There was a small number of national players that were serious, like Dong-E E-Jiao Group, Jiuzhitang Group, Jilin Xiuzheng Pharmaceutical and Shandong Fujiao Group, and there were hardly any major regional companies. Dong-E E-Jiao Group had been the most dominant player in the market, having 43% of the market share in the domestic market and 75 per cent of the market share for exports for the past three years.

As a class of blood-enhancing medicines such as donkey-ride gelatin, these products have gained more and more recognition, with over 45% market share at the mid-point of 2006.

Prices

The wholesale prices of blood-enhancing products in China have the following characteristics that include health food products that are more expensive than medicine oral liquids, higher in quality than syrups, brand-name products more expensive than products that are not branded, and prescription products higher than OTC (over the counter) products.

In terms of the retail price, there were three distinct features. For one, brands, even though they cost more, were less profitable than products that were not branded. For instance, for the same donkey-ride oral liquids containing gelatin, the products made by Dong-E E-Jiao had a gross margin of just 20%, whereas products from less well-known Jiangxi Yuxin Pharmaceutical could reach 85 per cent. In addition, competition in the retail market was growing in the industry, as producers and distributors tried to find an equilibrium between promotional costs and product prices in various geographical areas. In addition, while blood enrichment products originated in rural areas in the 1990s in the context of a limited competitive landscape, at present, there is a lack of products that could fulfil the needs of rural people.

Retail competition

More than 80percent of blood enrichment products were offered by OTC medicines in China, and the main driving force behind this market is concurrence among OTC stores (mostly pharmacy stores). The survey data showed that, of the top three factors that influence the consumers’ buying decision for products for blood enrichment, “in-store recommendations” ranked top and was closely followed by “doctor recommendations” and “brand awareness”, each with 21% of respondents, and “previous experience” came in last with 12% of the respondents.

From these statistics, we can conclude that a product’s competition was determined largely by its reputation in the marketplace and was built from various factors such as the development of retail outlets and sales staff in stores distinctive benefits of the product packaging and advertising campaigns.

Market strategies and solutions

The above analysis suggests it is possible to identify two primary aspects in the market for products that enhance blood retailers and demands from the rural market. These two areas could provide the basis for a company’s breakthrough development.

Strategies for retail outlets

Retail strategies should be distinctive emotional, and communicated. Differentiating is the term used to describe product innovations and operational benefits in order to create an optimal mix of product performance, quality and price.

A marketing campaign that is emotionally appealing is essential for products that enhance blood flow because their customers are typically female consumers who tend to be more emotionally driven. Thus, a thorough and considerate and thorough promotional campaign, along with successful execution, are the main factors to ensure a high volume of sales.

A communication strategy is when businesses must establish lasting relations with their customers through frequent and varied messages and messages in the order that consumers are able to improve their knowledge of specific products and producers.

Promoting rural markets is essential to operations.

The term “rural market” includes markets at the county level (the third and fourth-tier markets). When compared to the urban market rural market offers three advantages. A major advantage is their greater understanding of the risk of deficiency of blood due to their inadequate intake of nutrients. The majority of rural consumers purchase products for blood enrichment, not just for cosmetic reasons. However, they also use them for intended purposes that require blood. Another benefit is that consumers in rural areas typically possess a more “sheep mentality regarding consumption, and are more easily controlled by well-planned marketing campaigns. Another benefit is that in the rural market, promotions and sales activities are typically connected, and businesses may need to invest more money into marketing to satisfy the more selective metropolitan customers.

Distribution channels and promotions are key to expanding the market for rural consumers of products that enhance blood flow. It is essential for product manufacturers to collaborate with commercial distributors with the qualifications to supply rural areas. Promotional campaigns shouldn’t just be aimed at end-users but also the grassroots level pharmacy and shops.