Lin Zhicheng, CEO of Tomson By-Health: The dietary supplement industry will still grow rapidly in 2024, but the process will not be smooth sailing

Every reporter: Jin Zhe Every editor: Dong Xingsheng

With the improvement of national health awareness, the demand for health products has soared, and the development of the dietary supplement industry (VDS) has ushered in a new round of acceleration. The change in the consumption environment has further stimulated the segmentation of VDS categories.

People of different ages have different health needs, so there are different product functions and subdivisions of use scenarios. In the flagship stores of leading brands, there are product camps classified according to age, gender and different health needs.

As an industry leader, Lin Zhicheng, CEO of Tomson By-Health, said in an exclusive interview with a reporter from the "Daily Economic News" that in 2023, the dietary supplement industry will show four characteristics: increased overall penetration, multi-category explosion, more online sales channels and continuous entry of new brands, and the industry has become more diversified, professional and younger.

Lin Zhicheng Image source: Courtesy of the interviewee

After the growth of the new cycle in 2023, how much room for the industry to rise in 2024 Lin Zhicheng said that the VDS industry will enter a new growth cycle in 2023, and it will still maintain rapid growth at a reasonable growth rate in 2024, but this process is certainly not smooth sailing, which is both an opportunity and a challenge for Tomson By-Health.

Dietary supplements lead the consumer goods industry

Judging from the macro data, the recovery of consumption is showing a positive trend. On December 15, data released by the National Bureau of Statistics showed that in November, the total retail sales of consumer goods reached 4,250.5 billion yuan, a year-on-year increase of 10.1%, rebounding for the fourth consecutive month and setting a record since May.

VDS was at the head of the line. According to the survey data of the DT Research Institute, in 2023, 14.2% of people will spend more on nutrition than the same period last year, ranking second in consumer goods. Lin Zhicheng also told reporters that judging from the data in the first 11 months of 2023, VDS has maintained a good growth trend in the entire consumer goods.

Specific to the changes in the industry, Lin Zhicheng believes that the first is that the overall penetration rate is increasing, and the main consumer groups are penetrating from the original middle-aged and elderly to young people, and the base of young consumer groups is constantly expanding; The third is that the sales channels are more shifted to online, and in the first 11 months of 2023, the online growth rate will be more than 30%, and the offline will be basically the same; the fourth is that new brands continue to enter this field, as a leading enterprise, Tomson By-Health is happy to see this phenomenon, "which shows that everyone is paying more and more attention to this industry."

In fact, these characteristics are related to the development law of VDS. Under the logic of differentiation, more professionally subdivided products usher in the opportunity of certainty. More than 10 years ago, everyone bought nutritional products to supplement nutrition, enhance immunity, and solve basic needs, but now, everyone has more subdivided needs such as anti-aging, lowering blood lipids, and relieving fatigue.

According to the industry report released by China Merchants Securities, the largest scale of VDS is immune system, bone and joint products, with a market size of more than 12 billion yuan, of which the market size of immune system products has reached more than 25 billion yuan. The fastest growth rate and the strongest potential are joint and vision health products. Data show that in the past four years, the compound growth rate of joint products in mainland China has been close to 30%, and the compound growth rate of vision health products has exceeded 20%.

Continue to consolidate the strategy of strengthening science and technology and brand

As Lin Zhicheng said, in addition to some pharmaceutical and food companies entering the VDS industry, some entrepreneurs with consumer enterprise backgrounds are also looking at the VDS industry, with more and more new brands, and they are becoming younger, more diversified and professional. Compared with the large consumer industry, VDS is still a fast-growing track, but the growth rate of each category may come and go. For example, as the population ages, more and more people pay attention to health, which will drive the growth of related products. Young people will have different needs and consumption scenarios, which will also affect related categories.

The reporter of "Daily Economic News" also noticed that the category opportunities of VDS have been hot, especially in the subdivision of probiotics and other tracks, the domestic supply chain and channels are becoming more and more mature, and the threshold for new brands to enter is getting lower and lower. In this environment, some brands "roll" profits, some "volume" brand concepts, and some "volume" products, constantly launching new categories. No matter what kind of change, "cost performance" is the consensus that the current consumer industry cannot avoid.

According to the "2023 Contemporary Youth Brand Consumption Data Insight Report", 55.9% of young people said that they would give priority to the cost performance of products when consuming. The trend of pursuing "cost-effective" will bring more opportunities to local brands. But this does not mean that consumers will only choose low prices, at least the price of VDS industry products is not the most important thing for consumers, the important thing is its own product efficacy and consumer recognition.

Lin Zhicheng said that the continuous entry of new power brands into the industry is not only a challenge for Tomson Beijian, but also prompts the company to think more, including what shortcomings the company needs to make up for quickly. For Tomson Beijian, the first thing to do is to consolidate the strategy of strengthening technology and brand.

Specifically, the core driving force of consumer goods companies is products, and the mission of By-Health is to provide the highest quality products for family and friends, which not only requires good product quality, but also requires high technology content to provide consumers with different feelings and experiences. On this basis, By-Health will focus on the strong scientific and technological route of "new raw materials, new functions and new technologies", formulate the "three moonlight" scientific and technological goals, hoping to do some forward-looking research and lead the improvement of the technology and innovation level of the entire industry.

In addition, Lin Zhicheng also said that the strategy of "multi-brand, large-scale single product, omni-channel, full-category, and single-focus" of Tomson Beijian is different from that of many other companies. "We also know that in addition to products, the core of consumer goods must also have a very strong brand power. Therefore, in the process of multi-brand implementation, we must (think) how to set up the main brand, especially the big brand of Tomson By-Health. ”

According to the DT Research Institute, if a product or service can provide a better experience, such as "skin care products feel and work better", "digital products are smoother to use", "hotel accommodation is more comfortable, make yourself happier", ...... Young people are more willing to pay a premium. Among the reasons for choosing repurchase, the top three are "quality clearance", "familiar with brands and products", "convenient and trouble-free, too lazy to pick again".

Lin Zhicheng said that with the continuous development of modern nutrition, there is still a lot of room for optimization in all aspects of scientific research and production and operation. "But in conclusion, I am full of confidence that Tomson By-Health has always been in a leading position in the entire industry and leading the industry to a higher level. ”

National Business Daily