The China Nutricosmetics Market Is Booming

Integrated anti-aging is gradually becoming the new trend in the medical aesthetics industry. It advocates a holistic anti-aging concept from the inside out. This trend not only focuses on changes in the surface layer of the skin, but also pays deeper attention to the health and youthful vitality inside the body, striving to achieve substantive anti-aging results. Guided by the idea of integrated anti-aging, the medical aesthetics industry continues to explore and innovate, and is committed to integrating a variety of anti-aging technologies and methods to provide more personalized services to customers. In particular, nutricosmeticsproducts have received widespread attention, and their market penetration continues to grow, bringing new growth points to the “appearance economy” market.

01The rise of the nutricosmeticsindustry has achieved leapfrog development from “outside” to “inside”.

In the high-pressure environment of modern society, young people generally face health problems such as collagen loss, dull complexions, and insomnia, which has prompted consumers to have increasingly diverse needs for nutricosmeticsproducts. New nutricosmeticsingredients such as collagen peptides, hyaluronic acid, and niacinamide have gradually become the focus of consumer attention, which in turn has promoted the continuous segmentation of the nutricosmeticsmarket, with the emergence of diverse tracks such as “anti-aging,” “hydration,” and “anti-sugar.” Behind this trend is consumers' recognition of the concept of “eating your way to beauty.” Through orally consumed beauty products, consumers expect to improve their skin condition from the inside out and realize their vision of beauty.

The concept of “internal beauty adjustment” has been around in China for more than 20 years, but due to limitations in technology and the market environment at the time, it failed to develop on a large scale. It wasn't until 2004, when highly bioactive collagen peptide drinks became popular in Japan and entered China through daigou (personal shopping agents), that the orally consumed beauty market truly exploded. However, for a long time, the market was mainly monopolized by foreign brands.

In recent years, domestic nutricosmeticsbrands have begun to emerge. In 2019, the rapid rise of new consumer brands such as Five Female Doctors drove category growth, bringing more innovative products and technologies to the market. In addition, the addition of cutting-edge brands such as Chexi Biology has jointly promoted the rapid development of the nutricosmeticsindustry. According to the “2023-2029 China nutricosmetics Industry Panorama Research and Strategic Consulting Report,” in 2022, the market size of China's nutricosmeticsindustry will be about 23 billion yuan, a year-on-year increase of 4.55%. After the epidemic, online channels will account for more than 30%, and there is the possibility of further improvement. It is estimated that in 2023, the market size of China's nutricosmeticsindustry will reach 24 billion yuan.

02 nutricosmeticspenetration rate increases, broadening the market for the appearance economy

The Chinese have always believed in “nourishing the inside and beautifying the outside”. “Cosmetics and food come from the same source” is a major trend in consumption, and nutricosmeticshas become an area of beauty and skincare that cannot be ignored. Unlike beauty products, nutricosmeticsis a relatively vague concept that has not yet been clearly defined. The nutricosmeticsmarket can be divided into four categories according to dosage form: liquids, tablets, capsules, and powders or snack-based formulations.

It is predicted that China's functional food market will reach 307.14 billion yuan by 2022, and the nutricosmeticsmarket will reach 23 billion yuan. After the pandemic, online channels will account for more than 30%, and there is the possibility of further improvement. Compared with the functional food penetration rates in the United States and Japan, China's penetration rate is relatively low at only 20%, and the proportion of sticky users is only 10%.

Take collagen peptide products as an example. According to data from Tmall Health, in 2023, the transaction volume in first-tier cities will increase by more than 30% year-on-year, and the transaction amount will increase by more than 20% year-on-year; the transaction volume in second- and third-tier cities will increase by more than 20% year-on-year, and the transaction amount will increase by more than 30% year-on-year; the transaction volume in fourth- and fifth-tier cities will increase by 20% year-on-year, and the transaction amount will increase by 20% year-on-year.

Sales of collagen peptides in lower-tier markets

03Upstream Raw materials support the sustainable development of the industry Competitive landscape and innovation go hand in hand

The upstream of the nutricosmeticsindustry's industrial chain is raw material processors. Raw material manufacturers include two main categories: plant and animal extracts and pharmaceutical raw materials (vitamins, minerals, etc.).

First, from the perspective of the extract market, China has abundant plant and animal resources and advanced extraction technology, resulting in a huge output of plant and animal extracts. At the same time, the concentration of extract manufacturers is relatively dispersed, and the market is highly competitive.

Secondly, in terms of the pharmaceutical raw materials market, China is one of the world's largest producers and exporters of raw materials, and its production and quality of pharmaceutical raw materials have significant competitive advantages. These pharmaceutical raw materials not only meet the needs of the domestic market, but are also exported in large quantities to the international market, providing strong support for the development of China's nutricosmeticsindustry.

At the same time, with the continuous development of biotechnology, new biological raw materials such as fish collagen peptides are being used more and more widely in the nutricosmeticsfield, and their market demand is also showing a rapid growth trend.

04 Midstream: Production specialization and rapid progress Strict formulation of standards

The midstream of the nutricosmeticsindustry is the production process, and strict control according to standards is the key. As a new industry, the nutricosmeticsindustry does not yet have comprehensive industry standards.

However, in recent years, as the market has developed, more and more companies have become involved in standard formulation. For example, the “five female doctors have passed ISO9001:2015 quality management system certification, and strictly control the product development-design-transportation system according to international standards.”

It is reported that they have linked up with upstream and downstream partners and, under the guidance of the China Food and Drug Enterprise Quality and Safety Promotion Association, have promoted the implementation of the first group standard for collagen peptide drinks. The standard clarifies two key points for collagen peptide drinks: first, they must be “sufficiently supplemented” with collagen peptides, with the amount of collagen peptides in high-quality collagen peptide liquid drinks ≥ 6g/100mL; second, they must “ensure absorption . In terms of raw material requirements, collagen peptides should comply with relevant standards and regulations such as GB31645, and the proportion of collagen peptides with a relative molecular mass of less than 5000Da should be ≥90.0%.

In addition, UNOMI also took the lead in issuing the “Evaluation Method for the Efficacy of nutricosmeticsProducts in Improving Skin Aging”, and Zhongke Yanyuan participated in the formulation of the group standard “Quality Requirements for nutricosmeticsProducts”.

05 Downstream: Generation Z leads the new trend of nutricosmeticsand drives the industry's diversification and expansion

The downstream market of the nutricosmeticsindustry is consumer-led, with young women aged 18 to 31 in particular dominating the market.

Data shows that women have a stronger demand and awareness of beauty and health, and are more willing to try different beauty methods, accounting for 83.93%; the proportion of nutricosmeticsproducts for men is only 12.68%. In terms of purchasing channels, taking collagen peptides as an example, Douyin is the main channel, accounting for 60%. In addition, Tmall accounts for 28%, and other channels account for 12%.

As the public's awareness and acceptance of nutricosmeticsproducts continues to increase, the trend of nutricosmeticsconsumption is gradually moving towards younger age groups, mainly Generation Z. According to data released by the CBNData business data center, by 2023, 15% of young consumers aged 16 to 22 will have purchased nutricosmeticsproducts at least twice. Driven by the appearance economy, consumers' increasingly diverse demand for nutricosmeticsproducts is also constantly pushing the industry towards specialization.

06Limitations of oral beauty

nutricosmeticsproducts, such as collagen, can help improve skin quality, but their effects are not as direct and significant as those of medical beauty methods such as lasers and injections. These medical beauty products can directly act on the skin, while oral products need to be absorbed through the digestive system, and the effects vary from person to person.

In addition, due to the body's constant metabolism, in order to continuously improve the skin through nutricosmeticsproducts, it is necessary to take them for a long time, which is a test of both the patience and financial ability of consumers.

In addition, the current nutricosmeticsmarket is in chaos, with inconsistent product quality and excessive promotion, making it difficult for consumers to choose and even leading to the purchase of ineffective or harmful products.

Therefore, the nutricosmeticsmarket urgently needs technological innovation to improve product efficacy, as well as stricter market supervision to regulate industry order.

07 Summary

The nutricosmeticsmarket has become a new engine of the appearance economy. Driven by the integration of anti-aging concepts, consumers are paying more and more attention to comprehensive anti-aging from the inside out, and nutricosmeticsproducts have therefore received widespread attention. The market size has reached 24 billion yuan, and the penetration rate continues to increase, showing huge market potential and room for growth. From an industrial chain perspective, the abundance of raw materials and the specialization of production technology provide a solid foundation for the development of the industry. Downstream consumers, especially young women, have a strong demand for nutricosmeticsproducts, which is driving the diversification and specialization of the industry.