The plant extraction industry is ushering in a golden period of development. How should companies tap the market potential?

In recent years, the development of my country's plant extraction industry is ushering in a golden period of development, but it is also in a period of industrial pain. Whether it is self-driven or industrially forced, companies need to complete self-innovation. my country's plant extraction industry is also experiencing a return to rational development from barbaric growth. In the future, how relevant companies create competitive products and have a greater right to speak in natural health products has become the focus of industry attention.

1.Welcome to the blue ocean

Expanded coverage of consumer groups

Plant extracts are currently widely used in botanical medicines, food additives, functional foods, cosmetics and other fields. Especially in the field of health food, whether it is functional health food or nutritional supplements, plant extracts are the basic and most important part of the core competitiveness of products.

In the past, my country's plant extraction industry was dominated by exports. At present, both in terms of scale and growth rate, my country's plant extract market is a blue ocean.

According to the statistical annual report of the former State Food and Drug Administration, in 2017, there were 2,317 health food production licenses nationwide, and the total value of my country's nutrition and health care market exceeded 700 billion yuan. It can be seen from this that there is still huge room for growth in the industry. The growth rate of market consumption potential lies in the overall consumption upgrade, and people are more willing to pay for health.

In 2017, my country's per capita health care expenditure was 1,451 yuan, and this growth rate was already higher than the growth rate of per capita consumption expenditure. In addition, the consumer groups in the health food consumer market are also becoming more diverse.

The post-90s generation who are keen on the "health trend" love to buy health care products as much as the 90-year-old. According to data from Yibang Power, one of the favorite health products of the post-80s and post-90s generation on Double Eleven last year was wolfberry. The post-90s coexist with the growing silver-haired people, and are gradually growing into another force in the consumption of health care products.

2.Industry short board

Restrict the development of the industry

Although the plant extraction industry has a huge market space, in recent years, the industry has also experienced a process of returning to standardized development from vicious competition. For now, the entire plant extraction industry is still facing developmental shortcomings.

In order to gain more voice and occupy a core position in the industry chain in the fierce international competition, the domestic natural health product industry needs more practice both inside and outside. Because of the rapid development, endogenous problems such as the lack of obvious industry scale development, weak core competitiveness, and weak R&D capabilities have become prominent.

First of all, at present, the scale advantage of my country's health food industry is not obvious. Enterprises with an investment scope of more than 100 million yuan only account for 1.45% of the total number of enterprises in the industry. Enterprises were 38%. This shows that the industry has not yet formed a large-scale development. In addition, in terms of products, the competition between imitation and homogeneity is serious. Under the background of increasingly fierce international competition, domestic enterprises have to face the competition pattern of "cannibalism".

In addition, in the quality supervision system, industry standards and entry barriers are relatively low; in sales channels, excessive publicity or even false publicity and other violations of consumer rights and interests also occur from time to time.

3.external challenges

Forcing enterprise market innovation

In addition to breaking through development bottlenecks, solving industry development problems, and changes and challenges in the external environment, my country's plant extraction industry also needs to make positive changes in my country's natural health product industry itself. In the past plant extraction industry, my country was a big country in the export of plant extraction raw materials, but it was a weaker in the product competition in the downstream of the industrial chain. As international competition intensifies, maintaining the status quo can only be a matter of sitting still.

Although my country's health food market has a scale of 100 billion, not everyone can get a share. Relevant data shows that in 2017, foreign health food sales accounted for 10% of the total cross-border e-commerce imports, reaching a market size of 50 billion yuan. The total import volume of cross-border e-commerce has been close to the share of domestic health food brands.

A set of data from the China Chamber of Commerce for Import and Export of Medicines and Health Products shows that in 2017, my country's export volume of plant extracts reached US$2.01 billion, a year-on-year increase of 4.33%, but my country's health food exports were only US$241 million, a year-on-year decrease of 3.35%. %.

At the same time, in 2017, my country's health food imports reached 323 million US dollars, which is not surprising, but the year-on-year growth rate was as high as 69.51%. That is to say, the impact of foreign products on the domestic market is getting bigger and bigger, and domestic health food cannot avoid the fierce international competition.

These data reflect that the development of my country's plant extraction industry is ushering in a golden period of development, but it also indicates that the industry is in a period of industrial pain. Whether it is self-driven or industrially forced, domestic health care products companies need to complete self-innovation.

4.Take advantage

Turn crises into opportunities

Generally speaking, in the R&D process, enterprises need to innovate more and increase investment in scientific research, instead of just being satisfied with the lowest profit upstream in the industrial chain. In the production process, it is necessary to use digital methods to redefine quality control; in the marketing process, it is necessary to expand new channels, cooperate with downstream enterprises, and carry out brand building. 

Meng Dongping, vice president of the China Chamber of Commerce for Import and Export of Medicines and Health Products, said: "If the natural health products industry wants to break through the bottleneck of development and form a large-scale development, firstly, it needs to have an international vision and follow international rules; secondly, it must continue to innovate and create differentiated competition. Advantages; Third, we must use the industry platform to combine punches, investment and trade, and bring in and go out.”

Zhang Chengwen, chairman of the China Plant Extracts Branch, said: "At present, the industry still needs the introduction of relevant laws and regulations to regulate the development of the industry, and at the same time fully activate the consumer education mechanism, and establish a quality control mechanism from raw materials to distribution."

In the future, the plant extraction industry will grow from big to strong, and the formation of differentiated core competitiveness cannot be accomplished in a short period of time. Relevant industry insiders have said that they have been promoting the development of the industry in depth, improving the capabilities of scientific research, quality control, service and other links, so as to play a greater role in the Healthy China strategy and better meet the needs of consumers and consumers. Multi-level needs of customers.

Shaanxi Huike Botanical Development Co., Ltd. a integrated enterprise which is focus on natural products, plant extract related products and services.We mainly focus on pharmaceutical, functional food, Freeze-dried powder,Natural Pigment,beverages and other business services.

Email:sales8@huikes.com

2022-4-12

Shaanxi Huike Botanical Development Co., Ltd.