WanLian Security: Three major factors drive the growth of the health supplement industry, and the prospects for the young consumer-related market are promising

According to the Zhitong Finance APP, WanLian Securities has released a research report stating that on the supply side, the health supplement category is gradually becoming more refined, and consumption scenarios are becoming more diverse, attracting the younger generation of consumers. In the segmented market, dietary nutritional supplements are mainstream, with promising prospects for sports nutrition and children's health consumption, while traditional tonics and weight management face downward challenges. With the improvement of regulations, as well as effective drives from channels, demand, and supply, it is expected that the health supplement industry in China will continue to maintain a growth trend in the medium to long term. The firm judges that segmented markets related to young consumption and high efficacy, such as sports nutrition, children's health, workplace recovery, and anti-aging, are the fastest-growing tracks, and it is recommended to focus on leading health supplement companies that actively layout in these high-growth areas with strong channels, research and development, and brand strength.

WanLian Securities' main viewpoints are as follows:

Driving Factors: Three main factors driving industry growth

The driving factors for industry growth include: ① On the channel side, the shift of health supplement channels from offline to online brings more precise marketing methods, which can more effectively stimulate consumer demand; ② On the demand side, in recent years, residents have experienced COVID-19 infections, coupled with the intensifying aging trend, health awareness is expected to continue to strengthen; ③ On the supply side, the health supplement category is gradually becoming more refined, and consumption scenarios are becoming more diverse, attracting the younger generation of consumers. Overall, China's health supplement market still has considerable growth space compared to relatively mature markets. With the improvement of regulations, as well as effective drives from channels, demand, and supply, it is expected that the health supplement industry in China will continue to maintain a growth trend in the medium to long term.

Segmented Market: Dietary nutritional supplements are mainstream, sports nutrition is growing rapidly

Dietary nutritional supplement market: The most significant consumption area for health supplements, with a market size accounting for 55.98% of the industry in 2024. Market concentration is decreasing, and the overall pattern is relatively dispersed, with a CR5 of 27.6%. In the long term, as regulations tighten and competition intensifies, the advantages of leading companies will become more apparent.

Traditional tonic market: The second-largest market for health supplements, which was once stagnant due to the impact of the "Qianjian incident." Due to the unique effects of traditional Chinese medicine, product information asymmetry is common, facing downward challenges in both volume and price.

Sports nutrition market: Although small in scale, it is growing the fastest, with an average annual compound growth rate of 8.64% from 2010 to 2024. The industry concentration is relatively high, with Xiwang Foodstuffs accounting for nearly 20% of the market share. With the popularization of sports and fitness concepts, the industry has sufficient growth potential in both volume and price.

Children's health consumption: Although the birth rate is declining, the focus on children's health drives industry growth, with a CAGR of 8.37% from 2010 to 2024. Growth slowed after the pandemic, but it is expected to rebound in the future. The market competition pattern is relatively dispersed, and the concentration has stabilized post-pandemic, with major leading companies having a relatively balanced market share.

Weight management market: Growth rates are notably volatile, with the market size turning negative year-on-year in 2022, as increased health awareness and the launch of weight loss drugs squeeze market space. Emerging brands are continuously emerging, impacting the existing market structure. From the perspective of consumer groups and penetration rates, market growth is still expected.

Risk Factors: 1. Industry policy risks; 2. Product quality and food safety risks; 3. Economic, political, and social condition risks