China’s rapidly developing economy is presenting new and distinct opportunities in the travel retail sector. Urbanisation, a growing middle class with rising disposable

incomes, along with an ageing population and an increasing reliance on self-medication have come together to create a booming health and wellbeing market.

Yintong Betser, managing director of business and PR consultancy Active Anglo-Chinese Communications, argues that China has become the world’s biggest market for health and wellbeing products with a population of 1.3bn and a population that is keen to maintain their health in order to enjoy the wealth they have accumulated.

“The first generation of entrepreneurs have come to an age

when they are concerned about their health and wellbeing after a successful business life. Premature deaths are often reported about businessmen due to their stressful and unhealthy lifestyles, so this is another reason that people’s attention is turning to a healthier existence and better quality of life,” says Betser. “With their increased wealth, people can afford to buy this type of product.’’

On Chinese soil, spending on health and wellness has rocketed in the last 10 years with cities such as Beijing and Shanghai seeing detox, juice cleansing and health food companies springing up, serving and stimulating the growing market.

In Hong Kong, T Galleria by DFS, the luxury department store for travellers, is expanding its beauty hall concept, T Galleria Beauty by DFS. The store takes a holistic view of beauty through new or

HEALTH & WELLBEING

24 • OCTOBER 2016 • FRONTIER

approachA healthy

China is leading the explosion of spending on health and wellness products, a category that is expected to be worth $70bn annually by 2020. Mark Lane discovers how travel retailers are preparing to grab their share of this lucrative market

024-026 Health Wellbeing.indd 24 23/09/2016 16:22:14

expanded product categories such as men’s, health, wellness, hair, body and nail as well as a trend area featuring popular Korean brands.

Growth in this sector is expected not only to continue but to gather pace and it is forecast that the health and wellness market will reach nearly $70bn by 2020.

An increasingly prosperous Chinese population is now using its new-found disposable income to enjoy holidays abroad and growing numbers of Chinese tourists can be found all over the world. It is widely expected therefore that a significant proportion of the burgeoning health and wellbeing spend will go to the travel retail sector in China and overseas.

Betser says she can foresee dedicated health and wellbeing stores thriving in places where there is a high footfall of Chinese in travel

FRONTIER • OCTOBER 2016 • 25

HEALTH & WELLBEING

retail environments such as airports.She comments: “There are so many Chinese people in these

environments who will have the disposable income and the interest to purchase these products. The GTR channel is also the prime place to get hold of products from overseas.’’

Saba Tahir, vice-president of purchasing at Dubai Duty Free, agrees and says that in its household and pharmaceutical categories her organisation stocks a range of health and wellbeing products such as blood pressure monitors, sugar check monitors, a plethora of multi-vitamins, food and herbal supplements and probiotics and it hopes to have an organic food range available in Dubai Duty Free by the last quarter of this year.

“As we move towards a more health-conscious world, we can certainlt say that the future looks bright for the health and wellness subcategory,’’ she says. “The sales volumes may not be huge enough for travel retail operators to provide dedicated stores at the present time, but should space permit in certain airports, then surely we can expect to see specialist health and wellness stores in the future.’’

China International Duty Free (CIDF), the leading distributor and marketer of Chinese consumer brands at global duty free

retail, has been supplying Blackmores Health Supplements to 10 duty free locations since April.

These include a number of Starboard cruises, Princess Cruises, Anway’s duty free shop in Hung Hom station in Hong Kong, and duty free stores in Malaysia, Laos and China. CIDF also reports that it has several other retail partners

wanting to list the products and it is working with them to launch and prepare marketing activities. By the end of the

year it estimates that it will have reached a total of 20 travel retail locations.

“In our experience, in the right locations, this category has excellent sales potential driven by the Chinese consumer. And what’s more, it is 100% incremental for the duty free retailers,” observes Amy Coghlan, CIDF’s global business development

manager. “It’s an entirely new

category. If you look at what’s happening in

Left: Yintong Betser believes Chinese consumers are taking a greater interest in their health than ever before

024-026 Health Wellbeing.indd 25 23/09/2016 16:22:29

0 • MONTH 2014 • FRONTIER

SECTION NAMEHEALTH & WELLBEING

Overleaf: CIDF supplies Blackmores health

supplements to 10 TR locations; below:

Dubai Duty Free stocks a range of wellbeing

products at its pharmacy outlets

26 • OCTOBER 2016 • FRONTIER

China you will see that health is already one of the top areas where the rising middle class are spending their money. The Chinese consumer is incredibly health conscious.’’

She adds: “All of our locations have a high concentration of Chinese travellers. They are the main target audience for our

health and wellness portfolio. Another important factor has been whether retailers are permitted under their duty free licence to list health and wellness products.

“The consumers want them and the retailers want to please the consumers, but we are sometimes faced with antiquated duty free licences that make it difficult for the retailer to provide what the modern health-conscious consumer wants to buy when they are travelling. Times are changing – it’s

time for travel retail to really get innovative and become much more consumer-focused.’’

She continues: “Of course we have a wonderful marketing suite for Blackmores as well. We support each location with health and wellness training for the staff, white coat promoters, GWPs, BOGOFFs, custom furniture, and the striking Blackmores identity system featuring its brand ambassador Lina, the world-famous tennis star from China.’’

However, CIDF is taking a measured, strategic approach to expanding the market, ensuring that it has the right products for the right outlets. Coghlan explains: “We have been approached by several other potential strategic partners in the health and wellness industry. We have done something quite incredible with Blackmores and there has been a huge amount of learning from that which has set us apart as the preferred travel retail partner for many other health brands.

“We want to be really sure that, whatever brands and products we choose to partner with, they are the best choice for consumers and our retail partners. We have quite a rigorous approach to taking on new brands and products.’’

Health and wellbeing is clearly a fast-developing market with new products constantly being introduced, but there is established demand in a number of sub-categories.

Dietary and health supplements are very popular with the Chinese health and wellbeing consumer. According to recent reports, the market has almost doubled since 2008 and was worth more than $15bn by the end of 2014. Research has shown that two thirds (66%) of Chinese consumers had used supplements in the previous 30 days, with most taking a specific vitamin or mineral.

Non-conventional supplements and products are also important

and the Chinese have a long history of incorporating Traditional Chinese Medicine (TCM) into their health regimes and products such as herbs, liquids, tinctures and others are commonly used as alternatives to, or in conjunction with, modern medicine.

According to new research from Mintel on plant protein drinks (PPD) in China, nearly nine out of ten (87%) Chinese consumers drink plant-based concoctions, be these soybean drinks, juices or grain drinks and consumption of coconut water has grown by 30% over the last year.

Comments Betser: “The pollution and food scandals in recent years – such as in April 2004, when at least 13 babies in Fuyang, Anhui and 50 to 60 more in rural areas of Anhui died of malnourishment from ingesting fake powdered milk –have made people increasingly alert to the quality of their food and wellbeing products.’’

But this has done nothing to affect demand, it has only driven up standards. Betser says that popular products are those that are believed to be helpful in reducing the ageing process, losing weight, keeping cholesterol down, promoting youthful and clear skin, and those products that protect against common diseases such as cancer and arthritis.

She does, however add that the Chinese are ready to look at non-Chinese health and wellbeing products. “I believe many products from the US are very popular in China, especially among the middle class, such as Usana and Nu Skin due to the way they are marketed and sold, for example through direct marketing or pyramid marketing, selling through friends and relatives,’’ she says.

CIDF’s Coghlan points out that many products that are popular in the Chinese market are sourced from overseas. According to her: “Popular products are fish oils, women’s health and heart health. We base the assortment on the top sellers amongst Chinese consumers, who order mostly from Australia as such products are not officially available in China; we also take into consideration other demographics and the needs of each respective location.’’

With all this demand, can she see any future potential for the opening of health and wellbeing dedicated stores for the travel retail market for Asia and beyond?

“Absolutely – the consumer demand is there,’’ she says. “We hope more duty free licences and agreements will allow for dedicated health and wellness stores in the future.” F

Amy Coghlan, CDIF’s global business development manager

024-026 Health Wellbeing.indd 26 23/09/2016 16:22:50