Xia Xing, Qin Min, Zhang Cui, Wang Fang, Hong Jiawei, Dong Li＊

(School of Business Administration, Shenyang Pharmaceutical University, Shenyang 110016, China)

Abstract Objective To provide suggestions for perfecting import station of healthcare products in China by analyzing the current status and existing problems. Methods Current status and development trend of the import of healthcare products in China in recent years were studied to analyze the existing problems. Results and Conclusion Countermeasures and suggestions are raised to perfect the import situation of healthcare products in China.

Keywords: health care products; import; literature review

1 Current situation of health care products import

1.1 Health care product industry grows steadily

There are many foreign brands and huge sales for health care product in China's market[1]. China's huge market potential attracts many famous international health care companies, such as Nutrilite and Nature Made, to enter and seize this market. According to the statistics of related departments, the number of foreign health care products allowed to enter China's market is 774. In recent years, the sales revenue of China's nutrition and health food industry rise steadily. In 2016, the total output value of China's health care products industry was 262.1 billion yuan, and the sales revenue of these enterprises was 256 billion yuan.While the export amount of domestic health care products was 1.797 billion yuan, the import amount was as high as 6.974 billion yuan. (See Figure 1)

1.2 The entry of foreign health care products is easy

The development of tourism industry, resulting in the fast growth of outbound tourists, leads to the domestic consumers' awareness of foreign health product brand. Swisse and Blackmores are Australia's leading health food manufacturers[2], and their consumers' identification reaches 86% and 88%respectively.

In recent years, with the rapid growth of e-commerce market scale, import cross-border e-commerce deal sizes rise to 170 million yuan. Health care product becomes one of the most important categories of cross-border online shopping. Figure 2 shows that 38.6% of cross-border shopping consumers buy food health care products[3], which is only less than cosmetics accounting for 45.7% and the maternal and child suppliers accounting for 39.6%.

Fig. 1 The output value and sales revenue of health care products in China

Fig. 2 Purchase rate of cross border shopping consumers

1.3 Increasing national demand

Aging population and environmental pollution are the intrinsic factors for the development of health care imports. In 2016, 16.6% of China's population was over 60 that meant the acceleration of aging population and the extension of life would be a trend[4]. At the same time, the high incidence of chronic diseases also forced the government to introduce a series of policies and measures for prevention and control of the chronic diseases.The ministry of health and other 15 departments established and issued China's Chronic Disease Prevention and Control Work Plan (2012-2015),which defined the governments at all levels and relevant departments' responsibility and integrated people's health into all public policies. These will be a strong driving force for the development of the health care industry[5].

2 Serious problems in the import of medicine and health care products

Due to the diversification of demand in China's health care market and the content of these products, coupled with historical reasons, the dietary supplement products imported from the international market have no clear legal position in China. The regulatory policies and relevant laws for such products are also unclear. The Food and Drug Administration has implemented a listing approval permit system for such products, which is commonly known as the application of “Little Blue Hat”, while the local quality inspection department has implemented QS production licenses for similar products. The import products are managed by the General Administration of Quality Supervision, Inspection and Quarantine and the port inspection and quarantine bureaus according to the pre-packaged food classif i cation. Different types of products with the same product category are in the market, which brings a lot of trouble for enterprises.These include enterprises' development strategy,product and market positioning, and government administrative supervision etc. On the other hand,it also confuses consumers with too many similar products while purchasing the products.

2.1 Label defects

With the continuous improvement of China's Food Safety Law, the number of public complaints and reports received by inspection and quarantine institutions increases rapidly. In particular, food labels defects for import health care products take up a large proportion in complaints and reports. Import health care products are more likely to become the focus of complaints because of their high economic value.

2.2 Low registration rate for import products

In terms of the list of import health foods, unlike the foreign fi ling system, China adopts a registration and approval system for health care foods, which is a challenge for foreign companies accustomed to filing system. According to statistics, since the issue of Administrative Measures for Health Foods by the Ministry of Health in 1996, the State Food and Drug Administration has approved a total of 774 imported health foods. The top three countries and region that export health foods to China are the United States,Hong Kong, and South Korea. (As shown in Table 1)

According to the investigation, the main reasons for registration failure of foreign health food are the lack of important supporting data and safety data.Details are as follows:

(1) Raw material and dosage: There are no suff i cient experiments and application in China or its dosage does not meet the requirements.

(2) Formula: The ratio of raw materials does not meet the requirements of China, and it does not provide suff i cient formula basis.

(3) New product features: It has been listed in the home country for less than one year, and it is notwithin the scope of functions approved by China.

Table 1 Statistics of major imported health foods in China

(4) Data proof: Lacking R&D data and quality standards.

2.3 Excessive propaganda and exaggerated eあect

The product advertising model used for imported health products is one of the traditional marketing models. Merchants spend a lot of money on advertising from the vitamins tablets and calcium tablets that initially enter our market to protein powder, enzymes and liver detox, etc. All kinds of high-end imported health care products fill people's daily lives with exaggerating efficacy[6]. Nutritional health products is not only children and the elderly exclusive, young people also become the main force in the pursuit of health care products, especially cosmetic, whitening and moisturizing products.Imported high-grade health care products become the norm. In the eyes of many consumers, the quality of foreign products is guaranteed, and the effect is definitely better than domestic products. However,there is no scientif i c proof, and only time can tell.

2.4 Distribution channels are in disorder

The imported health care products are quite popular in the domestic market now. For the overseas tourist consumption abroad, health care products occupy a large proportion. In addition, foreign health products also occupy the leading position in crossborder e-commerce. Though the imported health food market is developing rapidly, the market management needs to be improved. At the same time, professional sales channels for health care products are not set up. Besides hospitals and pharmacies channel system, other channels for health care products are in chaos. Some enterprises do not pay attention to the quality competitiveness of their products. They neither develop new products nor focus on product improvement. They just provide dealers with huge profits and they do not care about the management level of distributors, channel establishment and expansion. Such a non-action way of operation results in the mess of health care products channels.

3 Related countermeasures for the problem of the imported health care products

3.1 Measures for import safety problems

(1) Import food enterprises should take the responsibility and strengthen the management of food labeling[7].

(2) The inspection and quarantine department should strengthen the inspection, review and supervision of labels on the routine. The inspection and examination procedures for health food labels must be implemented strictly. Besides, these enterprises must be aware of the legal basis of the labels for imported health care products.

(3) The regulatory authorities shall establish an inspection and quarantine complaint reporting system,which can make specific penalties for the labels of imported health food and illegal addition of non-food raw materials to imported health food.

(4) The government strengthens the examination to the health care product advertisement to prevent the false propaganda.

3.2 Countermeasures for the import registration management

(1) Foreign health food manufacturers should be introduced by amending the new act. According to article 76 of the newly revised Food Safety Law,health food using raw materials other than the list of health food raw materials and health food imported for the fi rst time shall be registered by the Food and Drug Administration of the State Council. However,if the first imported health food is supplemented with vitamins, minerals and other nutrients, it shall be reported to the Food and Drug Administration of the State Council for the record. Other health food shall be reported to the food and drug supervision and administration department for the record. Therefore,after the implementation of the newly revised Food Safety Law, foreign health food manufacturers will have more opportunities to obtain permit.

(2) Innovative cooperation model. We should take advantage of innovative cooperation model with foreign enterprises. For instance, their advanced technology and equipment can be used to produce health care products which are in line with Chinese law by guiding them to the application of raw material,the formula and the dosage of the main ingredients.This is not only benef i cial to the foreign enterprises,but is helpful for the improvement of the environment for health care products import in China.

3.3 Proper use of cross-border e-commerce

Health care products enterprises can transport imported goods to the bonded area in China in advance, and wait for the customs to complete the pre-inspection and pre-planning of the commodity.Then these goods are stocked up in the bonded area.This can process the goods that the consumers order on the e-commerce platform in a short period of time,and then the goods will be delivered from the bonded area to the consumers quickly, forming a “bonded import, mailing out” mode. The biggest advantage of this model is the simple and convenient purchase with cheap postage and reduced tax.

With the continuous development of cross-border e-commerce, some companies that long for entering the Chinese health care market found a convenient path. China's well-known health food enterprises, BY-Health and Kang-mei Health announced the joining of cross-border e-commerce as China's government issued new policy in this field. With the domestic health food enterprises launching cross-border e-commerce business, the import and export of health care products will increase substantially, which will be very benef i cial to the regulation and supervision of health food import.

3.4 Advice for businesses and consumers

The functional categories of health care products are complex and diverse, and the imported health care products are various on the market. Enterprises must import health care products on the basis of their quality and safety. First of all, these products must have relevant health certificates. Besides, their packages must be aff i xed with the Chinese label and Chinese manual. Moreover, the marked content must be true, accurate and in compliance with relevant laws and regulations. It is necessary to indicate the exact production date and expiration date as well as the origin of the product and relevant information of the domestic agent. Health foods without relevant labels or labels that are not qualif i ed should not be imported.At the same time, consumers must be able to screen all kinds of health products without pursuing the imported products blindly.

4 Conclusion

In the future, the medical and health care market will grow at a high speed[8]. The huge population and fast-growing economy are the powerful guarantees for the development of China's health care industry[9]. Learning from the experience of western health care products market, China should implement the long-term strategy for Chinese medicine industry,which takes the demand triggered by the increase of residents' income as the core force, and the aging and chronic disease incidence as the internal factors. We must improve the people's health awareness and brand awareness, which in return can further promote the development of the health care products industry. To sum up, the domestic health care products market will have an enormous sales potential under the promotion of the domestic consumption structure and the development of the health care products industry.