China’s dietary supplement industry has been expanding at an estimated 20 percent per year with no signs of slowing down. It is currently valued at$15.9 billion， which is the official figure from China’s Health Care Association. However， the industry lacks transparency and is riddled with both gray and black market activities that make obtaining an accurate figure difficult. Insiders estimate that the real figure is certainly higher than this because the official number only takes into account products that are registered as health products with China’s State Food and Drug Administration (SFDA) and have approved claims. The figure does not reflect products that are legally imported as food or those that are sold illegally on a variety of popular websites.

Currently， there are many products in the market， which are approved as and sold as food without claims. So the figure must certainly be higher. CNutrInfo Ltd， a consulting company in Guangzhou， put the market at $44.4 billion， which would crown China the largest market for dietary supplements outpreforming the U.S. by over $14 billion. I feel this assessment is a bit too ambitious and guestimates the real number is some where around $20 billion. Again， because there is so much gray market activity going on， it is impossible to say with any certainty what the true figure is.

Fifteen， twenty， forty billion are just numbers thrown around by industry professionals doing the best they can to put a number on the market. Although knowing the number can help gauge growth year on year etc.， it certainly isn’t the only barometer to use to judge how successful the industry is or will be. We can simply look at the amount of global investment and growing interest. TSI Group has finalized the purchase of Yessamin Health Company， Ltd.， a Norwegian invested contract manufacturing facility in Nantong， Jiangsu Province， China. Amway(China) announced in September it is investing 600 million RMB ($94.5 million) to build its largest overseas production base in the Economic and Technology Development District in Luogang， Guangzhou. And these are just two of many stories we can use.

In addition to these investments， COFCO a large Chinese state owned enterprise has invested over $500 million to build a state of the art nutrition research facility to explore ways in which to nutritionally enhance foods with dietary ingredients.

Holland and Barrett (NBTY) opened its first health food store in Shanghai this year with hopes of opening another 16 by year-end.

World Health Store (WHS) a health food store carrying a complete line of dietary supplements， sports nutrition， aromatherapy， packaged organics etc. has two stores in Beijing and two in Shanghai. WHS is the pioneer of the traditional “western” health food store concept in China and as such has gained the attention of many investment firms looking to capitalize on China’s growing health food industry.

Both NBTY and GNC have been in the market for at least the past six years or so. They both continue to invest and prosper. NBTY recently reported to China Daily that they have introduced over 200 products to the China market including their flagship brand Nature’s Bounty and their top selling sports nutrition brand Met-Rx. NBTY’s China office reported their 2011 sales hit over $79 million.

New Hope Natural Media has invested in helping Chinese suppliers understand U.S. import and industry regulations with its market quick start programs held in cities across China. They also published the Engredea Monograph China paper， which helps global companies make sense of China’s complicated dietary supplement industry.

Although the industry is growing and has huge potential， there are a number of issues that need to be addressed before China’s dietary supplement and overall natural health product market can be declared a true winner， meaning transparent regulations everyone can follow.

First off the regulations are in dire need of an overhaul.

Second is consumer education. Because the earliest dietary supplements to enter the market were from pharmaceutical companies， and were sold in pharmacies and registered as OTC， most view them as being similar to drugs and have the ability to treat or cure disease. Furthermore， the current regulatory system continues to treat them in this way.