Founder Securities released a research report highlighting that cross-border health products have emerged as a significant growth direction in the industry, primarily operating through general trade and cross-border e-commerce channels. The latter demonstrates stronger appeal due to advantages in regulatory access, tax efficiency, logistics speed, hit product success rates, and premium pricing. Compared to domestic health products, the report identifies clear competitive edges for cross-border offerings in both product quality and marketing strategies. Additionally, tightened regulations are expected to benefit compliant contract manufacturers and brands in this sector.
**Key Insights from Founder Securities:** China’s cross-border health products market, initially driven by personal shopping agents, has evolved with policy refinements, now exceeding RMB 50 billion in scale. These products, imported via international trade, include categories such as vitamins, mineral supplements, herbal extracts, and functional foods under customs classifications. From informal purchasing channels around 2010, the market has matured with improved policies on bonded warehouses and cross-border e-commerce. In 2024, China’s health product imports reached $7.75 billion (RMB 55.8 billion), while the 2025 Double 11 shopping festival saw total nutrition and health product sales hit RMB 23.8 billion, with cross-border brands like Swisse, K-Max, WHC, Move Free, and GNC dominating top sales rankings.
**Operational Models:** 1) **General Trade:** Requires enterprises to submit registered health product certificates or filings approved by Chinese regulators, ensuring compliance with national laws and food safety standards. This route suits large-scale commercial imports but involves rigorous inspection procedures. 2) **Cross-Border E-Commerce:** Consumers purchase overseas goods via platforms under "bonded import" or "direct purchase" models, with shipments originating abroad or from customs-supervised zones. Products need only meet origin-country quality and labeling standards, not Chinese regulations. Buyers are advised to scrutinize electronic Chinese labels to verify product types and functions.
**Advantages Over Domestic Products:** 1) **Product Superiority:** Younger consumers increasingly favor cross-border options, drawn by established international brands and premium ingredients (e.g., ergothioneine’s popularity). 2) **Marketing Innovation:** Platforms like Douyin leverage content-driven conversions and algorithmic precision to overcome trust deficits, boosting sales efficiency.
**Regulatory Tailwinds:** Authorities have intensified oversight across production, import, warehousing, and sales chains, particularly targeting bonded warehouses and e-commerce platforms. Stricter entry/exit mechanisms are expected to elevate compliance standards, benefiting OEMs and brands.
**Stock Recommendations:** - **Baihe Co., Ltd.** (expanding cross-border operations via New Zealand’s Ora factory) - **By-Health Co., Ltd.** (multi-channel growth in China’s e-commerce sector) - **H&H International Holdings** (profitability uplift from Swisse Plus sales)
**Risks:** Slower-than-expected demand growth, heightened competition, policy shifts, food safety incidents, and raw material cost volatility.
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