Documente Academic
Documente Profesional
Documente Cultură
Euromonitor International
July 2010
Vitamins and Dietary Supplements Hong Kong, China
Appendix................................................................................................................................................................ 11
OTC Registration and Classification ...................................................................................................................... 11
Vitamins & Dietary Supplements Registration and Classification.......................................................................... 12
Advertising .............................................................................................................................................................. 12
Self-medication/self-care and Preventative Medicine ............................................................................................. 12
Switches .................................................................................................................................................................. 13
Definitions.............................................................................................................................................................. 13
Sector and Subsector Definitions ............................................................................................................................ 13
Summary 1 Research Sources............................................................................................................. 17
Headlines ............................................................................................................................................................... 27
Trends .................................................................................................................................................................... 27
Vitamins .................................................................................................................................................................. 27
Dietary Supplements ............................................................................................................................................... 27
Prospects ................................................................................................................................................................ 28
EXECUTIVE SUMMARY
Economic Downturn Impacts Value Sales in 2009
Overall value growth for consumer healthcare slowed in 2009 when compared to the previous year. This was
largely due to the economic downturn that led to a reduction in consumers’ disposable incomes and
discretionary spending. While consumers cut down on unnecessary spending, some trading down was also
observed, particularly in vitamins and dietary supplements, where lingzhi, which tends to garner a high unit
price, observed a decline in value growth when compared to 2008.
are focusing on this demographic change, introducing new products, backed up by significant marketing
activity, to target this age group.
Current Impact
As consumers grow older they tend to pay greater attention to maintaining their health. This is serving to drive
value growth of vitamins and dietary supplements, which put in a robust performance over the review period.
Despite the poor economic climate since the third quarter of 2008, vitamins and dietary supplements continued
to perform well in 2009. Additionally, the category has witnessed increasing segmentation, for example offering
products for heart health and bone health, both of which are key concerns for middle-aged and elderly
consumers.
Herbal/traditional products are also seeing increasing popularity as these do not focus solely on curing ailments
such as flu, but instead seek to improve general wellbeing.
Outlook
Over the forecast period vitamins and dietary supplements will continue to be one of the best performing
categories in consumer health care in Hong Kong as ageing consumers will seek to supplement their diets and
strengthen their bodies. Manufacturers are also expected to tailor marketing campaigns and new launches to this
age group. Additionally, further segmentation is likely to be seen as manufacturers seek to maximise sales
revenue.
Future Impact
Health and wellness trends stemming from the fresh and packaged foods industries at the end of the review
period will give rise to a spillover effect into consumer health, supporting demand for herbal/traditional
products. As such, competition between leading herbal/traditional companies such as Cerebos (Hong Kong) Ltd
and Eu Yan Sang (Hong Kong) Ltd will be intense. To engender customer loyalty, quality assurance will be of
utmost importance and manufacturers are anticipated to introduce new quality assurance measures over the short
term.
Meanwhile, a potential threat deterring the development of the trend will be competition from prescription
medicines or healthcare products purchased through hospitals, which are not covered within the scope of this
report. To overcome this, manufacturers are expected to launch educational campaigns promoting consumer
self-medication.
Since 2003, the Hong Kong and mainland Chinese government has been bound under CEPA (Closer Economic
Partnership Agreement) to offer registered businesses in Hong Kong benefits such as zero tariffs when entering
mainland China. In 2008, this agreement was extended to aid businesses within consumer health.
Current Impact
‘Made in Hong Kong’ products are highly regarded by mainland Chinese consumers as they are perceived to be
of a high quality. This has encouraged more multinationals to set up bases in Hong Kong for manufacturing and
production. Additionally, companies are increasingly targeting mainland Chinese tourists, which account for the
highest share of overall tourist arrivals in Hong Kong year-on-year.
By setting up shop in Hong Kong first before entering mainland China, companies tend to be in a better position
to build a strong brand image among mainland Chinese consumers who will take with them a good impression
when they return home.
Outlook
Based on data provided by the Department of Statistics, an estimated US$250 million was generated by
consumer healthcare players in Hong Kong which benefited from the revised CEPA agreement. This is expected
to rise even higher over the forecast period. However, this will better benefit multinational players than
domestic players which will lose out in terms of smaller financial budgets as registration procedures in mainland
China tend to be more complicated and costly.
Future Impact
Hong Kong’s stable economic climate, sound government policies and low business taxation will continue to
woo multinationals to expand and develop their businesses in Hong Kong. Meanwhile, domestic players are
projected to concentrate on expanding their presence at prime tourist locations in Hong Kong to target mainland
Chinese tourists. Furthermore, with zero VAT, mainland Chinese tourists will continue to purchase consumer
healthcare products in Hong Kong.
Current Impact
Herbal/traditional products achieved current value growth of 6% in 2009. According to the Census Bureau, the
number of Traditional Chinese Medicine practitioners rose by 5% between 2005 and 2007. This suggests that
more consumers are opting for Traditional Chinese Medicine (TCM) over Western medicine and now have
greater knowledge about herbal products.
Additionally, leading traditional/herbal product companies, such as Haw Par Healthcare (Tiger Balm) and Nin
Jiom Medicine (Nin Jiom Pei Pa Koa), have branched out from their original core products to launch numerous
new product developments. For instance, Tiger Balm, traditionally a topical analgesic, came up with a pain
patch, while Nin Jiom Pei Pa Kao, traditionally a cough remedy, extended into medicated confectionery for
coughs.
Outlook
Herbal/traditional products are anticipated to see good growth over the forecast period. The Hong Kong SAR
government is also likely to offer more initiatives and grants for the development of this category. Domestic
companies with a long established history in Hong Kong, including Wai Yuen Tong Medicine Holdings Ltd, is
predicted to benefit from heightened consumer interest in herbal/traditional products and experience strong
growth over the long term.
Future Impact
There is likely to be a surge of new brand entrants in Hong Kong, particularly from Taiwan and mainland China,
over the forecast period. This may give rise to products with ambiguous or false claims regarding their herbal
content. As such, the Consumer Council is expected to introduce new initiatives and tighter legislation to
safeguard the interests of consumers. Meanwhile, manufacturers are expected to focus on establishing quality
assurance measures in order to build up consumer confidence and engender brand loyalty.
Current Impact
The value share of the direct selling channel reached 27% in 2009, up nearly one percentage point on the
previous year. More impressively, the channel’s sales rose by more than 44% between 1999 and 2009. The
success of direct sellers can be explained by their good before- and after-sales service that offers consumers
advice and reassurance on the benefits of the products. Additionally, leading players have also invested in social
marketing events to build up their brand images. One example is Amway Hong Kong Ltd’s ‘Amway Smiley
Children – Mental Enhancement Project’ which helps children to cope with school and family pressures.
The success of direct sellers drove up overall unit price in categories such as slimming products and vitamins
and dietary supplements over the review period. Direct selling goods are generally premium products which are
priced higher than standard products available at store-based outlets.
Outlook
The share of direct selling will continue to grow over the forecast period, although the channel is anticipated to
face an increasing threat from other healthcare specialist retailers that primarily focus on selling products in one
or more categories, such as nutritionals and/or medical goods. One example is GNC (Dairy Farm International
Holdings Ltd) that not only offers its own private label products but is also well supported by in-store sales
promoters. Moreover, there has been a rise in number of negative press reports concerning multi-level marketing
which may shake consumer trust and drive them towards store-based retailers.
Future Impact
Direct selling will continue to experience the most success within slimming products and child-specific dietary
supplements over the forecast period. This is because products in these categories tend to invite more
controversy and require greater persuasion from a sales representative to drive purchase.
Meanwhile, as the economy improves and more jobs become available, direct selling representatives who joined
during the recession may leave, simultaneously making it difficult for direct selling companies to retain
customer loyalty.
Current Impact
Overall value growth in consumer health in 2009 was weaker than in 2008. This was mainly due to the
economic downturn, which forced consumers to tighten their belts and reduce unnecessary purchases. However,
cough, cold and allergy (hay fever) remedies maintained its value growth rate from 2008. This suggests that
consumers were comfortable self-medicating despite numerous reports in the press magnifying the effects of the
H1N1 virus.
Nonetheless, while consumers were generally comfortable self-medicating, they were more wary about
purchasing over-the-counter products for their children. Moreover, numerous reports highlighting how a wrong
dosage could have serious consequences for a child resulted in an underdeveloped child-specific consumer
health segment in Hong Kong.
Outlook
Self-medication will continue to be strong over the forecast period and consumers will continue to purchase
over-the-counter products for the treatment of common ailments such as digestive problems and itchy eyes.
As consumers become more independent in purchasing healthcare products, sales via the internet will also rise
as consumers rely on on-line research and forums to source popular products from overseas.
Future Impact
With an ageing population, the potential value sales from self-medication may fall as elderly consumers are
likely to visit the doctor more frequently and purchase products directly from clinics and hospitals, which are
not covered within the scope of this report. Nonetheless, to get around this, companies can consider inviting
popular doctors to endorse their products, or give out free product trials in these channels to raise awareness and
build up brand image.
MARKET INDICATORS
Table 1 Consumer Expenditure on Health Goods and Medical Services 2004-2009
HK$ million
2004 2005 2006 2007 2008 2009
years
2004 2005 2006 2007 2008 2009
MARKET DATA
Table 3 Sales of Consumer Health by Sector: Value 2004-2009
HK$ million
2004 2005 2006 2007 2008 2009
Sports Nutrition - - - - - -
Vitamins and Dietary 1,977.5 2,094.9 2,230.5 2,447.0 2,634.5 2,800.1
Supplements
Wound Treatments 14.0 14.1 14.3 14.5 14.8 14.9
Allergy Care 31.3 31.9 32.9 34.3 35.4 36.6
Child-Specific Consumer 97.7 101.6 107.2 116.6 122.3 125.3
Health
Consumer Health 3,299.1 3,426.9 3,563.7 3,842.7 4,081.2 4,303.4
Source: Official statistics, Trade associations, Trade press, Company research, Store checks, Trade interviews,
Euromonitor International estimates
Note: Sum of sectors is greater than the market size because the four allergy care subsectors are included in allergy
care as well as cough, cold and allergy remedies, medicated skin care and eye care.
Table 8 Sales of Consumer Health by Sector and Distribution Format: % Analysis 2009
OS OT SP SN VD WT
AC CSO
HK$ million
2009 2010 2011 2012 2013 2014
OTC Obesity - -
OTC Statins - -
OTC Triptans - -
Slimming Products 1.5 7.7
Sports Nutrition - -
Vitamins and Dietary Supplements 1.9 9.8
Wound Treatments -0.5 -2.4
Allergy Care 1.1 5.8
Child-Specific Consumer Health 1.4 7.0
Consumer Health 1.6 8.1
Source: Official statistics, Trade associations, Trade press, Company research, Trade interviews, Euromonitor
International estimates
Note: Sum of sectors is greater than the market size because the four allergy care subsectors are included in allergy
care as well as cough, cold and allergy remedies, medicated skin care and eye care.
APPENDIX
OTC Registration and Classification
Under Hong Kong law, medicines are classified into three main categories, according to the severity of the
diseases they are intended to treat and the magnitude of the side effects they may cause:
• Medicines in Category 1 must be dispensed and sold on a doctor’s prescription in registered dispensaries
under the direct supervision of a registered pharmacist;
• Medicines in Category 2 do not require a doctor’s prescription but have to be sold in registered dispensaries
under the direction and supervision of a registered pharmacist. According to the Pharmacy and Poisons
Ordinance, medicines in Categories 1 and 2 must be labelled with the word ‘poison’;
• Medicines in Category 3 can be sold in dispensaries or drugstores without a resident pharmacist.
Medicine-related laws in Hong Kong include the Pharmacy and Poisons Ordinance, the Dangerous Drugs
Ordinance and their subsidiary legislation.
According to the laws of Hong Kong, medicines to be applied on human or animal bodies for diagnosis,
treatment, relief or prevention of disease must be registered with the Pharmacy and Poisons Board (PPB) prior
to their sale in the market.
Pharmaceutical products are required to conform to standards of safety, efficacy and quality before they can
obtain registration. The applicant has to provide a set of information including production formula, product
specification, laboratory report and manufacturer licence in the application for registration to gain approval by
the PPB.
Upon registration, the medicine will be given a PPB registration number, which is required to be printed on the
medicine label.
Apart from the registration number, the label should also bear the following general information:
• Name of product
• Name and quantity of active ingredients
• Name of manufacturer
• Batch number
• Expiry date
• Method of storage, if there are special requirements
• Method of use, dosage and dosing intervals, if the medicine is sold over the counter
The Undesirable Medical Advertisements Ordinance (UMAO) (Cap 231) prohibits the advertising of medicines,
surgical appliances or treatments for the prevention or treatment of certain diseases or conditions in human
beings as specified in Schedules 1 and 2 of the Ordinance, in order to prevent the adverse effects of improper
self-medication by members of the public.
Under Schedule 1, there are 14 diseases or conditions specified in column 1 in respect of which advertisements
are prohibited or restricted, except for the purpose (if any) specified in column 2. Under Schedule 2, there are
three purposes which are prohibited. In addition, advertisements relating to abortion are also prohibited.
Products within vitamins and dietary supplements are subject to registration controls in Hong Kong. Depending
on the exact nature, composition and medical claims of the product, some products are exempt from registration.
In general, products within vitamins and dietary supplements are regarded as pharmaceutical products if they are
used, with regard to human beings, for the diagnosis, treatment, mitigation, alleviation or prevention of disease
or its symptoms; or the diagnosis, treatment, mitigation or alleviation of any abnormal physical or physiological
state or its symptoms; or the alteration, modification, correction or restoration of any organic function.
Advertising
The Undesirable Medical Advertisements Ordinance prohibits the publication of any advertisement prompting
the use of any medicine or surgical appliance for the purpose of treatment or prevention of major diseases, such
as malignant tumours, venereal disease, heart disease and genitourinary disease. The ordinance also prohibits the
advertising of any medicine, surgical appliance or treatment for the purpose of delaying menstruation,
promoting sexual virility or correcting deformity.
Under the ordinance, the term ‘advertisement’ includes print, television and verbal announcements and also
refers to any claims made on or inside the product packaging. The term ‘medicine’ includes patented medicine,
proprietary Chinese medicine, in particular Chinese herbal medicine, and purported natural remedies. If a name
appears in the advertisement, it should be the name of the manufacturer or the supplier of the medicine or
surgical appliance.
The expansion of chemist/pharmacy counters in retailers, along with the assistance of pharmacists, has boosted
self-medication. With a longstanding presence and reputation, herbal/traditional products are benefiting from the
self-medication trend. Consumers also took more preventative action by consuming products such as vitamins
and dietary supplements as part of their daily diet in order to maintain their health, as prevention is better than
cure.
Switches
There were no switches in 2009.
DEFINITIONS
This report analyses the market for Consumer Health in Hong Kong, China in 2004-2009. For the purposes of
the study, the market has been defined as follows:
• Analgesics
• Cough, cold and allergy (hay fever) remedies
• Digestive remedies
• Medicated skin care
• Vitamins and dietary supplements
• NRT smoking cessation aids
• Eye care
• Wound treatments
• Ear care
• Adult mouth care
• Calming and sleeping products
• Emergency contraception
• OTC statins
• OTC obesity
• OTC triptans
• Slimming products
• Sports nutrition
• Herbal/traditional products
This market is measured in terms of retail sales. The following product types are excluded from Euromonitor’s
definition of Consumer Health: prescription-generated sales of non-prescription bound medicines, or
prescription generated sales of semi-ethical products; loose, unpackaged and unprocessed remedies such as
roots, barks or herbs; sales through hospitals (institutional sales); cosmetic skin care products; and
homoeopathic remedies.
The analgesics sector covers pain-relief medications. The subsector breakdown is as follows:
• Aspirin
• Acetaminophen
• Ibuprofen
• Combination products
• Dipyrone
• Ketoprofen
• Naproxen
• Diclofenac
• Child Specific Analgesics
• Topical analgesics/anaesthetic
The cough, cold and allergy (hay fever) remedies sector covers products used to alleviate cough, cold and
allergy/hay fever symptoms. The subsector breakdown is as follows:
• Decongestants
• Cough remedies
• Combination products
• Pharyngeal preparations (sore throat remedies)
• Medicated confectionery
• Antihistamines/allergy remedies (systemic)
• Child-specific cough, cold & allergy remedies
Digestive remedies
The digestive remedies sector covers products used to treat stomach, oesophageal, or intestinal complaints. The
subsector breakdown is as follows:
• Indigestion and heartburn remedies
• antacids
• antiflatulents
• digestive enzymes
• H2 blockers
• proton pump inhibitors
• laxatives,
• diarrhoeal remedies,
• motion sickness remedies,
• IBS treatments,
• Child-specific indigestion and heartburn remedies
The medicated skin care sector covers products used to treat serious skin conditions and contain active
pharmaceutical ingredients. Skin care products that do not contain active pharmaceutical ingredients are
included in the Beauty and personal care system. The subsector breakdown is as follows:
• Hair loss treatments
• Topical antifungals (formerly fungicides)
• Vaginal antifungals
• Medicated shampoos
• Acne treatments
• Antipruritics
• Topical germicidals/antiseptics
• Topical allergy remedies/ antihistamines
• Antiparasitics/lice (head and body) treatments:
• Cold Sore treatments
• Haemorrhoid/Hemorrhoid treatments
• Child-specific medicated skin care
• Nappy/diaper rash treatments
These products contain nicotine to help patients overcome the withdrawal symptoms associated with quitting.
The subsector breakdown is as follows:
• Nicotine replacement therapy patches
• Nicotine replacement gum
• Lozenges
• Inhalators/inhalers
• Other NRT
Eye care
This category includes: artificial tears, eye ointments and eye washes, as well as eye drops used to treat eye
allergies. The subsector breakdown is as follows:
• Standard eye care
• Allergy eye care
• Antibiotic eye care
Ear care
This sector includes drops or ointments used to treat tinnitus (ear ringing, buzzing, or hissing), to clean the ear,
to reduce inflammations (anti-inflammatories), to treat infections, and to soften ear wax.
These products treat mouth ulcers, canker sores, and inflammations. This sector does include oral analgesics -
namely painkillers specifically for the alleviation of pain in the mouth.
This sector includes sedatives (calming or soothing agents) both analgesic (includes a pain reliever) and non-
analgesic (does not include a pain reliever), as well as herbal sleeping remedies.
Wound treatments
This sector contains products used to cover, seal, or close small wounds. The subsectors are sticking plasters
and other wound treatments.
OTC Obesity
This sector includes products with active pharmaceutical ingredients that reduce body fat. Herbal and dietary
supplements are excluded. See the slimming products sector for other types of weight reduction products.
Emergency contraception
This sector contains pill or capsule products with an active pharmaceutical ingredient used to prevent pregnancy
after unprotected sexual intercourse.
OTC Statins
This sector includes only the statin-version of drugs that lower cholesterol or lipids.
OTC Triptans
This sector contains only the triptan family of drugs used to treat migraines and cluster headaches.
Vitamins and dietary supplements are products used to provide additional nutrients or non-standard healing
treatments. The subsectors are vitamins, dietary supplements, tonics and bottled nutritive drinks and child-
specific vitamins and dietary supplements .
The vitamins subsector contains the two additional subcategories: multivitamins and single vitamins.
The dietary supplements subsector has been subdivided into three main subcategories: herbal dietary
supplements, non-herbal dietary supplements and other dietary supplements. The other dietary supplements
category contains single ingredient products that are indicative to a particular region and could be herbal or non-
herbal. Each of those main subcategories is broken down further as follows:
• Herbal dietary supplements:
• Garlic
• Ginseng
• Ginkgo biloba
• Evening primrose oil
• Echinacea
• St John’s wort
• Non Herbal dietary supplements
• Calcium supplements
• Mineral supplements
• Fish oils, which includes the cod liver oil and other fish oils subcategories
• Protein powder, which excludes products used to improve endurance for exercise or increase muscle
growth (those products are found in sports nutrition)
• Probiotic supplements
• Eye health supplements
• Royal jelly
• Co-enzyme Q10
• Glucosamine
• Sam-E
• Combination formulas, which contain multiple ingredients
• Other dietary supplements
This sector includes all vitamin and dietary supplement products designed specifically for children.
Slimming products
This sector is defined as commercial dietetic foods and supplements specially formulated and marketed as being
suitable for individuals who want to lose or control their weight. The subsectors are as follows:
• Meal replacement slimming products:
• Weight loss supplements:
• Slimming teas
• Other slimming products:
This sector includes products positioned in the marketplace for increasing muscle development, improving
physical endurance, and speeding recovery after exercise. Ingredients typically are soy protein, whey protein,
creatine, L-carnitine and amino acids.
Herbal/traditional products
This sector includes medicinal products made from herbs. These herbal remedies correct, restore or modify a
physiological function in a person. They are considered alternative remedies to standard products. This sector
includes the following subsectors:
• Herbal analgesics
• Herbal cough, cold and allergy (hayfever) remedies
• Herbal digestive remedies
• Herbal medicated skin care
• Herbal dietary supplements
• Herbal tonics/bottled nutritive drinks:
• Herbal child-specific vitamins and dietary supplements:
• Herbal calming and sleeping products
• Herbal medicinal teas
• Herbal smoking cessation aids
• Fortune Pharmacal’s focus will be on the efficacy and safety of its medicines, ensuring that the company
offers top-quality products for its customers over the forecast period.
Key Facts
Company Background
• Fortune Pharmacal Co Ltd is an independent research-based pharmaceutical company founded in 1954. Its
packaging is characterised by three black vertical stripes on the right side of the box with a shield. The three
stripes represent the three pillars of the business: quality, efficacy and safety first. The shield represents
protection.
• The company’s core business is in OTC products, with over 20 different products in the following areas:
cold and flu, pain and fever, alimentary, respiratory, throat and mouth and motion sickness.
• Fortune’s products are mainly sold in Chinese communities. Its main market is Hong Kong, with a strong
presence in mainland China, the US, Canada, the UK, Australia, New Zealand, Brazil, Singapore, Malaysia
and the Philippines.
Production
• All products sold are made in Hong Kong. The company attained the Good Manufacturing Practice (GMP)
compliance certification from the Hong Kong Department of Health in 2005.
• Fortune Pharmacal exports internationally to markets with a Chinese population, including mainland China,
the US, Canada, the UK, Australia, New Zealand, Brazil, Singapore, Malaysia and the Philippines.
• The company’s products can be found in major supermarkets (Taste, Wellcome), convenience stores (7-
Eleven, Circle K) and health and beauty retailers (Watson’s, Mannings). Fortune does not manufacture for
any other brand owners.
Competitive Positioning
• The company is present in analgesics, cough, cold and allergy remedies and digestive remedies. Its products
in analgesics and cough, cold and allergy remedies are strong in terms of value share, with the company
ranked second in both categories in 2009.
• The company’s value share in consumer health in 2009 was 2%, giving it a ranking of 13th. The company
faces strong competition from multinational companies, as evident from its decline in value share over the
review period. The company’s value share in analgesics and digestive remedies declined over the review
period.
• The company has been in Hong Kong since the 1950s, and is a trusted and reputable brand. Its main
products – cough, cold, and allergy (hay fever) remedies and analgesics – are positioned in mature and less
dynamic areas of the market. Fortune has a relatively wide portfolio of products for a local manufacturer.
• With such a rich history and being a trusted brand in Hong Kong, the company’s products, positioned at the
low to middle end of the market, appeal to the mass consumer. Fortune does not assume the role of a leader
in consumer health and does not come up with innovative products. However, Fortune donates generously
to charities such as the HK Community Chest, and also encourages social services in China by setting up
scholarships to recognise students who are enthusiastic about providing services for the poor.
• Hoe Hin Pak Fah Yeow Manufacturing Ltd is expecting that the economic downturn in 2009 will slow
down the company’s sales. The company is expected to further improve its overseas sales and expand into
more countries over the forecast period.
Key Facts
Summary 4 Hoe Hin Pak Fah Yeow Manufacturing Ltd: Key Facts
Full name of company: Hoe Hin Pak Fah Yeow Manufacturing Ltd
Address: 11/F 200 Gloucester Road, Wan Chai, Hong Kong
Tel: +852 2881 7713
Fax: +852 2577 2895
www: www.whiteflower.com
Activities: Manufacture, marketing and distribution of Hoe Hin
brand
Source: Euromonitor International from company reports
Summary 5 Hoe Hin Pak Fah Yeow Manufacturing Ltd: Operational Indicators
2007 2008 2009
Revenue HK$88.3 million HK$99.3 million HK$97.2 million
Company Background
• The medicated oil White Flower Embrocation, commonly known as Pak Fah Yeow, was first developed in
Singapore in 1927. The brand entered Hong Kong in 1951. Hoe Hin Pak Fah Yeow Manufacturing Ltd was
incorporated in Hong Kong in 1959. It is now a wholly-owned subsidiary of Pak Fah Yeow International
Ltd, a company incorporated in Bermuda with limited liability, and shares which have been listed on the
Hong Kong Stock Exchange since 1991.
• The company focuses on its OTC products Hoe Hin White Flower Embrocation, Hoe Hin Strain Relief and
Hoe Hin White Flower Ointment. In 2007, the company introduced Fuzai 239, which replaced its previous
floral-scented Pak Fah Yeow.
• The introduction of Fuzai 239 in 2007 was aimed at rejuvenating the company’s brand image among young
people. As part of the brand’s promotion, it has organised a school touring drama with the message ‘The
Dangers of Being an Addict’, to encourage students to spend less time on computer games and on-line
activities.
Production
• Hoe Hin Pak Fah Yeow is manufactured according to an original formula in Hong Kong. The Hoe Hin
brand of products is manufactured, marketed and distributed by Hoe Hin Pak Fah Yeow Manufacturing Ltd.
• Hong Kong is the major market for the Hoe Hin brand of products. The brand is also available in mainland
China, Macau, the Philippines, Thailand, Singapore, Malaysia, Australia, the US, Canada and South Africa.
• Hoe Hin does not manufacture for any third parties.
Competitive Positioning
• Hoe Hin Pak Fah Yeow Manufacturing Ltd faced strong competition from its major competitor Haw Par
Healthcare Ltd over the review period. Hoe Hin Pak Fah Yeow’s value share in topical analgesics declined
marginally in 2009 as a result of stronger marketing campaigns including television commercials and print
media by Tiger Balm.
• The company positions its products at the middle to high end of the market. Hoe Hin has aimed to improve
its competitiveness through ensuring high product quality. In 1996, the company was awarded Good
Manufacturing Practice (GMP) certification, and gained ISO9002 and ISO9001 certification in 1999 and
2003, respectively. Since 2001, it has also been licensed to use the Hong Kong Q-Mark for all varieties of
Pak Fah Yeow and Hoe Hin Strain Relief.
Summary 6 Hoe Hin Pak Fah Yeow Manufacturing Ltd: Competitive Position 2009
Product type Value share Rank
Topical analgesics/anaesthetic 13.7% 2
Source: Euromonitor International estimates
• Holistol positions itself as a major producer of high-quality herbal products to consumers in Hong Kong
and abroad.
Key Facts
Company Background
• Holistol was established in 1998 as an independent company. Holistol is mainly present in dietary
supplements, with coverage in Hong Kong and exports to China. Its distribution network includes
chemist/pharmacy and parapharmacy/drugstore chains such as Mannings and Watson’s.
• Holistol’s marketing efforts focus on television commercials, often using well-known celebrities and
athletes in its commercials and also on its product packaging. Celebrities used include Wu Fung and Lee
Shi Kay, two well-known mature celebrities, which may suggest that Holistol’s target customer is more
mature. Athletes used in its marketing efforts include Hong Kong windsurfing Olympic champion Lee Lai
Shan.
Production
Competitive Positioning
• Holistol’s main products are lingzhi and its derivatives. Holistol’s value share in consumer healthcare in
2009 was 1%, giving it a ranking of 22nd.
• Holistol is a leader in both lingzhi and cordyceps. However, it faced strong competition from companies
like Wai Yuen Tong Medicine Holdings Ltd, Vita Green Health Products Co Ltd and Eu Yan Sang (Hong
Kong) Ltd in 2009.
• Holistol offers a wide product portfolio for a local manufacturer. Apart from different formats of lingzhi
and cordyceps, Holistol also offers lingzhi for children and herbal teas for detoxification of the body.
• The company positions itself at the mid to high end of the market. Its lingzhi and cordyceps products are
quite expensive and would not appeal to the average middle-class Hong Kong customer. Holistol is a leader
in lingzhi, laying down the foundation for developing ganoderma spore products. By using registered
patented technology from the US, Holistol has managed to extract more fat from the ganoderma fungus
spores, which greatly enhances the effectiveness of the lingzhi. Its new patented technology is always
emphasised in its marketing campaigns.
• Nin Jion Medicine Mfy (Hong Kong) Ltd will continue to launch new products over the forecast period to
promote Chinese medicine, ensure the good quality of its existing products and produce high-quality
products using modern and advanced technology.
Key Facts
Summary 9 Nin Jiom Medicine Mfy (Hong Kong) Ltd: Key Facts
Full name of company: Nin Jiom Medicine Manufactory (Hong Kong) Ltd
Address: 16/F, Block A, Texaco Road Industrial Centre, 256-
264 Texaco Road, Tsuen Wan, New Territories, Hong
Kong
Tel: +852 2408 8521
Fax: +852 2407 6269
www: www.ninjiom.com
Activities: Manufactures, distributes and markets its own
products
Source: Euromonitor International from company reports
Company Background
• Nin Jiom is an independent company founded in 1946 by Mr Tse Siu Bong in Hong Kong.
• The core business is Pei Pa Koa, a traditional remedy from the Ching dynasty. Another area in which the
company is branching out is medicated confectionery and Traditional Chinese Medicine in powder form.
• Nin Jiom is prominent in Hong Kong as well as other countries in Asia such as China, Thailand, Singapore,
Taiwan, Indonesia, the Philippines and Malaysia.
• Since the 1960s Nin Jiom has run television advertisements featuring local female celebrities such as Carol
Cheng and Miriam Yeung. It changes spokesperson every few years. In 2008, it changed its spokesperson
to young female singer Fiona Sit.
Production
• Nin Jiom has plants in Hong Kong and Taiwan, and only manufactures its own brand. The Hong Kong
plant supplies the local market.
• Apart from Asia, the company also exports its products around the globe. It has distributors across the
world. In Asia, distributors can be found in Hong Kong, China, Thailand, Singapore, Taiwan, Indonesia, the
Philippines and Malaysia. In Europe, distributors are present in the Netherlands, Portugal and Spain, the
UK, France and Italy. Other countries include Panama, the US, Canada and Australia.
Competitive Positioning
• Nin Jiom is present in cough remedies and medicated confectionery. It offers Nin Jiom Pei Pa Kao
(sugarised and sugar-free) and Nin Jiom Herbal Candy in original and tangerine-lemon flavour. The
company’s position in cough remedies and medicated confectionery is very strong, ranking first and third,
respectively, in 2009.
• The company’s value share of 1% in 2009 gave it a ranking of 15th in consumer health in Hong Kong. Nin
Jiom has always marketed a relatively narrow portfolio, with Nin Jiom Pei Pa Kao being its main product
and medicated confectionery being a subproduct. The company is expanding into powder/concentrated
granules in Traditional Chinese Medicine which can be dissolved in water.
• With such a rich history and being a trusted brand in Hong Kong, the company appeals to the mass
consumer, positioning itself at the low to middle end of the market. As marketing efforts have been focused
on Pei Pa Kao since the 1960s, the company ranks first in cough remedies, compared with third in
medicated confectionery, which has not had as much marketing support.
• Nin Jiom is a leader in modernising, standardising, and promoting Chinese medicine. It is one of the few
companies that has worldwide distribution in Traditional Chinese Medicine, and it also donates to and
sponsors Chinese medical research centres around the world, including the Chinese medicine research
centre at San Francisco State University and the Chinese University of Hong Kong Chinese Medicine
Development Foundation.
Summary 10 Nin Jiom Medicine Mfy (Hong Kong) Ltd: Competitive Position 2009
Product type Value share Rank
Cough, cold and allergy (hay fever) 10.5% 3
remedies
Source: Euromonitor International estimates
• Wai Yuen Tong Medicine is looking to expand its business to overseas markets, including Singapore,
Malaysia, Indonesia, Cambodia, Vietnam, the Philippines, North America, China and the UK, making the
company a truly local player with a global presence.
Key Facts
Company Background
• Wai Yuen Tong Medicine Holdings Ltd was listed on the Hong Kong Stock Exchange in 2002. It has a
portfolio of businesses, one of which is manufacturing and marketing Chinese and Western pharmaceutical
and healthcare products.
• Wai Yuen Tong Medicine Holdings Ltd is also an associate of the Wang On Group Ltd (WOG), which was
listed on the Hong Kong Stock Exchange in 1995. Wang On Group Ltd has a diverse business portfolio,
from the sublicensing of Chinese wet markets and shopping centres to managing car parks and properties to
property development and investments.
• Wai Yuen Tong was first founded in 1897 during the Ching dynasty and registered as a trademark in Hong
Kong in 1979. The Luxembourg Medicine Company was established in Hong Kong in 1954, specialising in
Madam Pearl’s Cough Syrup.
• Wai Yuen Tong has vast regional coverage in Hong Kong. With franchising, Wai Yuen Tong has expanded
to 53 retail outlets in Hong Kong that sell products exclusively from Wai Yuen Tong Medicine Company
Ltd. Wai Yuen Tong’s products are available in health stores and supermarkets across Hong Kong.
• Wai Yuen Tong has operations in Beijing, Shanghai, Guangzhou and Shenzhen for business development.
The company generally invests heavily in television advertising and uses male celebrities such as Hacken
Lee and Leo Koo to endorse its Wai Yuen Tong Young Yum Pill.
Production
• Wai Yuen Tong manufactures its products in Hong Kong. It has business relationships with Canada, the
US, the Netherlands, Macau, Vietnam, Taiwan, the Philippines, Singapore, Indonesia, and Australia.
Currently, Wai Yuen Tong has distribution channels in Singapore, Malaysia, Sarawak, Sabah and Indonesia
in Southeast Asia, the UK, the US and Canada.
Competitive Positioning
• Wai Yuen Tong’s overall value share in consumer health was less than 1% in 2009, giving it a ranking of
25th. The company faces strong competition from rivals such as General Nutrition Centers, which
registered strong growth in Hong Kong. General Nutrition Centers is an internationally established player
which advertises its brands on television and in magazines.
• Wai Yuen Tong offers a wide product portfolio. It is also the first pharmaceutical company in Hong Kong
to incorporate a Chinese medical healthcare service in its retail stores. These services include personal
diagnosis by certified Chinese medicine practitioners, therapeutic massage and acupuncture. Wai Yuen
Tong is also implementing a membership programme to maintain its customer base. Joining the
membership programme allows members to receive product and healthcare services regularly. Other
attempts to gain a larger customer base include promoting public awareness of Chinese medicine and
medical therapies by periodically organising seminars and free medical consultations.
• With such a rich history and being a trusted brand in Hong Kong, the company offers a wide range of
products catered from the low to high end of the market. The company ranks quite high with its main
products, and its slimming products are also maintaining their share despite a lack of marketing support.
• The company may be considered to be a leader in the market, having been established since 1897. Wai
Yuen Tong engages in constant research and development with teams based in Hong Kong, Singapore, and
China. The company is generally prompt in developing products to suit the latest market trends. One of its
most recent innovations include the Healthy Heart Formula of the Metro Series which contains Red Yeast
Rice Extract, an ingredient that has been featured in the media towards the end of the review period, for its
health benefits.
Summary 13 Wai Yuen Tong Medicine Holdings Ltd: Competitive Position 2009
Product type Value share Rank
Vitamins and dietary supplements 1.0% 15
Source: Euromonitor International estimates
HEADLINES
• In 2009 vitamins and dietary supplements registers current value growth of 6% to reach HK$2.8 billion
• Rising health consciousness drives sales
• Combination herbal/traditional dietary supplements the best performer with current value growth of 14% in
2009
• USANA Hong Kong Ltd leads the category with a 16% value share in 2009
• Over the forecast period vitamins and dietary supplements set to record a constant value CAGR of 2%
TRENDS
• Influenced by health scares such as the H1N1 virus in 2009, consumers are increasingly looking after their
health, driving overall value growth of vitamins and dietary supplements in Hong Kong.
Vitamins
• Value growth in 2009 was slower than that of the previous year. This can be attributed to reduced
disposable income due to the economic downturn.
• Vitamin C achieved current value growth of 6% in 2009, performing better than in 2008 and also being the
most dynamic single vitamin. Vitamin C benefited from the H1N1 virus scare, with consumers increasing
their purchases to boost their immune systems.
• Unit price remained relatively constant as manufacturers and retailers leveraged heightened health
awareness following the H1N1scare to push price promotions and encourage consumer spending.
• Multivitamins registered strong current value growth of 5% in 2009, their popularity boosted by the
convenience of being an all-in-one pill which fits consumers’ busy and fast-paced lifestyles.
• Segmentation in multivitamins was increasingly popular towards the end of the review period. Gender-
specific targeting of different age groups and products positioned specifically for pregnancy are some of the
most commonly available items in Hong Kong.
• Vitamin C is the most popular vitamin in Hong Kong, accounting for a 63% value share of single vitamins
in 2009. Successful marketing campaigns from leading players, particularly Redoxon (Bayer Healthcare Co
Ltd), have helped contribute to raising consumer awareness.
• Fortified foods and drinks are increasingly common in Hong Kong (for instance, fruit/vegetable juice and
sugar confectionery fortified with vitamin C). However, these do not pose a strong threat to supplements as
the concentration of vitamins in these foods is comparatively low. Moreover, consumers are becoming
increasingly educated about food labelling so as to be able to distinguish between marketing gimmicks and
genuine nutrition.
• Child-specific vitamins are present in Hong Kong and are available in effervescent format and chewable
tablets. The leading brand of child-specific multivitamins is Centrum Jr (Pfizer Corp Hong Kong Ltd).
Dietary Supplements
• Dietary supplements achieved current value growth of 7% in 2009. The category has seen declining rates of
growth due to maturity.
• Lingzhi is the most popular dietary supplement, reaching value sales of HK$246 million in 2009. Lingzhi is
a key herb in Traditional Chinese Medicine and is known for its multiple benefits, including lowering blood
pressure and improving one’s overall wellbeing. As such, it is familiar to many consumers in Hong Kong.
However, due to its relatively high unit price in 2009, the category achieved value growth of only 1%,
down from 5% a year earlier.
• Combination herbal/traditional dietary supplements achieved the strongest current value growth of 14% in
2009. Consumers like the fact that they are able to obtain benefits from multiple dietary supplements in just
one single capsule.
• With a declining birth rate, Hong Kong is moving towards an ageing population. This has helped to drive
value sales of glucosamine, which registered current value growth of 7% in 2009.
• Dietary supplements positioned for general health are the most popular and accounted for a 65% value
share in 2009. These remain the most popular because consumers seek convenience and therefore prefer a
product that caters for all aspects of one’s health.
• Child-specific dietary supplements are popular in Hong Kong as parents are eager to supplement their
children’s diets with the necessary nutrition. Products comprising of fish oil and DHA, which support brain
development, remain some of the most popular variants.
• Due to work-related pressures, many parents overlook their children’s diets. Most prefer to buy child-
specific products to supplement their children’s diets. DHA and other ingredients related to brain
development have been some of the most popular choices for parents over other vitamin and dietary
products.
• Tonics and bottled nutritive drinks generated 3% current value growth to reach HK$282 million in 2009.
Brand’s Essence of Chicken (Cerebos (Hong Kong) Ltd) is the dominant brand, accounting for a 57% value
share in 2009. Towards the end of the review period, tonics positioned for beauty became increasingly
popular.
COMPETITIVE LANDSCAPE
• USANA Hong Kong Ltd led vitamins and dietary supplements in 2009 with a 16% value share. The
company derives its share from multiple categories, including child-specific vitamins and dietary
supplements and co-enzyme Q10. USANA’s direct selling representatives are well trained and professional,
helping the company to achieve the biggest gain in value share in 2009.
• Multinationals dominate the category as they possess the expertise and technology to develop new products
to meet consumer needs. Moreover, international brands are favoured by consumers as they benefit from
strong brand equity and are perceived to be of a high quality. The leading domestic company is Wai Yuen
Tong Medicine Holdings Ltd, which ranked 15th in 2009 and specialises in offering herbal/traditional
products.
• Cerebos (Hong Kong) Ltd, which ranked sixth in 2009, saw a slight decline in value share due to a product
recall incident in the US for its Brand’s Essence of Chicken drink. However, the damage was minimal as
the company was quick to react, organising media visits to its production plants in Thailand and issuing
press releases to reassure consumers in Hong Kong.
• In terms of marketing campaigns, television commercials, print advertisements and price promotions are the
most common strategies used by companies to gain share. Celebrity endorsement is also sometimes used, as
in the case of Cerebos (Hong Kong) Ltd which invited Eason Chan, a singer and actor popular throughout
Asia-Pacific, to be its spokesperson.
• Chemists/pharmacies and parapharmacies/drugstores, including Watson’s and Mannings, are the most
important store-based distribution channels for vitamins and dietary supplements in Hong Kong. On top of
stocking brands that do not have stand-alone stores such as Eu Yan Sang, well-trained sales consultants are
also present in-store to offer consumers assistance when needed.
PROSPECTS
• Over the forecast period the category is expected to continue to achieve positive growth, driven by
increasing health-consciousness. Since the SARS outbreak in 2007 and the H1N1 virus in 2009, consumers
have placed greater emphasis on maintaining their health. Furthermore, the declining birth rate and ageing
population will drive sales of dietary supplements, particularly those positioned for joint support, vitality
and improving heart health.
• There are not expected to be any major threats to growth apart from product recalls that may impact brand
rankings.
• Combination herbal/traditional dietary supplements are expected to be the best performer over the forecast
period due to consumer demand for convenience. Rather than consume multiple capsules with each serving
an independent function, consumers would prefer consuming a single capsule with multiple benefits.
Co-enzyme Q10, which is a relatively new category, having only been introduced in 2002, is also expected to
perform well, registering a constant value CAGR of 3% thanks to heightened beauty consciousness and a desire
to look younger.
• Price competition is widespread in an effort to encourage consumer trial and capture a larger share of sales.
Companies such as Cerebos (Hong Kong) Ltd have also been seen to offer different prices in different
channels for the same product.
• New launches towards the end of the review period included Wai Yuen Tong Medicine Holdings’ City
Series of dietary supplements, positioned to maintain heart health. This herbal/traditional product is
predicted to do well as there has been growing interest in plant-based natural products in recent years.
• Over the forecast period more companies are likely to target their products at the ageing population.
Therefore, new launches are likely to be focused on the maintenance of healthy bones and joints, heart
health and anti-ageing (antioxidants).
CATEGORY DATA
Table 11 Sales of Vitamins and Dietary Supplements by Subsector: Value 2004-2009
HK$ million
2004 2005 2006 2007 2008 2009
Table 12 Sales of Vitamins and Dietary Supplements by Subsector: % Value Growth 2004-2009
Ltd
Vita Green Vita Green Health 2.5 2.3 2.2 2.1
Products Co Ltd
Nature's Way Bayer Healthcare Co Ltd 2.6 2.2 2.1 1.8
Herbalife Herbalife International 2.2 2.0 1.8 1.8
of Hong Kong Ltd
Jamieson Natural Jamieson Laboratories 1.9 1.8 1.7 1.7
Sources
Centrum Pfizer Corp Hong Kong Ltd - - - 1.5
AG Santé Naturelle AG Ltd 0.8 1.3 1.5 1.5
2036 Holistol International Ltd 1.6 1.6 1.5 1.5
Redoxon Bayer Healthcare Co Ltd 1.4 1.3 1.3 1.2
Wai Yuen Tong Wai Yuen Tong Medicine 1.1 1.1 1.0 1.0
Holdings Ltd
Nutri-Green Green Science 0.7 0.7 0.7 0.7
International Ltd
Yu Yeuk Tong Royal Medic (Holdings) Ltd 0.8 0.8 0.7 0.6
Calcium Sandoz Novartis 0.8 0.7 0.7 0.6
Pharmaceuticals (HK) Ltd
Blackmores Blackmores Ltd 0.9 0.7 0.7 0.6
Long Far Long Far Herbal 0.4 0.4 0.5 0.5
Medicine Mfg Ltd
Caltrate 600+D Pfizer Corp Hong Kong Ltd - - - 0.4
Centrum Select Pfizer Corp Hong Kong Ltd - - - 0.4
Caltrate 600 Pfizer Corp Hong Kong Ltd - - - 0.4
True Vitamins True Vitamins Co Ltd 0.3 0.3 0.3 0.3
Surbex Abbott Laboratories 0.3 0.2 0.2 0.2
(Hong Kong) Ltd
Caltrate Plus Pfizer Corp Hong Kong Ltd - - - 0.2
Pharmaton Boehringer Ingelheim 0.2 0.2 0.2 0.2
(Hong Kong) Ltd
Centrum Wyeth (HK) Ltd 2.2 2.1 2.0 -
Caltrate Wyeth (HK) Ltd 1.2 1.1 1.1 -
Your Life Leiner Health Products Inc 0.8 0.4 - -
Dayalets Abbott Laboratories 0.3 0.3 - -
(Hong Kong) Ltd
Others 20.7 19.9 19.2 18.3
Total 100.0 100.0 100.0 100.0
Source: Trade associations, Trade press, Company research, Trade interviews, Euromonitor International estimates
Table 19 Forecast Sales of Vitamins and Dietary Supplements by Subsector: Value 2009-2014
HK$ million
2009 2010 2011 2012 2013 2014
Table 20 Forecast Sales of Vitamins and Dietary Supplements by Subsector: % Value Growth
2009-2014
Beauty Tegreen97 1
Nutrilite 2
USANA 3
Mental USANA 1