An Assignment Submitted by
Vitamins and healthy supplements have become a popular product among the consumers due to the popularity of the healthy lifestyle. However, before entering the foreign market, it is essential to consider the external and internal factors that affect competitiveness of the company. For the last year, the demand for the Australian vitamins has boosted due to the increase of popularity of the vitamins for enhancing beauty and improving the intellectual skills. While multiple sources report that Australian vitamins are especially popular among the Chinese consumers, there are certain strengths, weaknesses, opportunities, and threats (SWOT) that predetermine a successful entering to the vitamins industry in China.
A major strength is high demand for the Australian vitamins and healthy supplements among the Chinese buyers. It was emphasized that the tourists from China managed to boost this trend by bringing suitcases full of vitamins from Australia. Therefore, it is possible to target the consumers without using a large marketing campaign. The second major strength is absence of well-developed internet sites for selling the Australian vitamins to the Chinese customers. In this way it is possible to provide more convenient experience for the consumers to buy healthy supplements online. At the same time, a weakness of the entire process is the need to translate the entire web site in Chinese as well as to provide Chinese-speaking customer support. Also, one of the weaknesses is the need to maintain a high-quality logistic chain in order to satisfy the customers.
There are several opportunities in the Chinese market. First of all, as the trend is new, there are few competitors on the market. Secondly, according to resources, the vitamins market generates huge profits. It was estimated that the sales in vitamins in China increased for 12 percent and resulted in $15.7 billion in 2014. Thirdly, China has a very big population that can buy the products. Also, internet web store does not require huge investments into the workforce and physical space, which will decrease the start-up expenditures. Major threats include the possibility that the trend for the foreign, and especially Australian vitamins, can disappear as quickly as it emerged. For instance, it was admitted that the sales of vitamins may shrink due to the growing popularity of the Chinese traditional remedies. Also, a large competitor PharmaCare has already entered successfully on the market can pose a serious threat to a smaller company. PharmaCare is Australian venture that owns several smaller brands that have already been popular in the market. Also, there are other major foreign competitors, like Pfizer, Swisse, and Amway, that have already become popular in China.
it is important to reveal the target population as well as the type of internet marketing strategy for the ChinaVit. It was revealed that the major reason why the foreign vitamins and healthy supplements have become popular among the Chinese consumers is the easiness of use comparing to the traditional treatment, popularity of the Western style, and the trend to use vitamins for beauty and IQ enhancement, and “clean and green” strategy. Therefore, it was revealed that the 49 percent of urban Chinese population consume vitamins and healthy supplements, where women taking care for beauty and mothers that give the vitamins for their children constitute the majority of the consumers. Also, around 62 percent of Chinese consumers under 40 years old tend to buy healthy supplements and vitamins. According to the research, the Chinese consumers tend to buy the vitamins or healthy supplements when they are recommended by the friends, family, or simply if they are popular in the community. In addition, the vitamins and healthy supplements tend to be expensive for the Chinese buyers, thus, not all categories of consumers have the ability to purchase it. Therefore, the main target audience for the Australian-made vitamins is people under 40 years old, mostly female, and the representatives of the middle and upper class.
The main short-term goal of the business is the generation of profits, as it is planned to increase the range of products as well as services, which will require further investments. It is considered that these goals will be achieved by the application of several methods, namely ads in social media and paid promotions. These methods were chosen due to their cost-efficiency and relatively low needs of investment. The ads will be placed before the products are launched in order to generate the interest among the potential consumers. Paid promotions will be launched during the first period of selling the product, as the feedback of the customers together with the promotions can encourage the buyers to retain.
The internet strategy proposed for the product is business-to-consumer (B2C) framework, as it is the most optimal way for entering the market within e-commerce segment. It will be possible to create convenient environment for the consumers by creating a catalog website with the list of all available ChinaVit products. It is essential to create a web site with high level of usability and attractive design targeting the most popular trends, like beauty. If the Chinese customers tend to rely on the feedback of their family and friends, it is possible to create a feedback option that will allow the consumers to share their opinion on the product.
The vitamins can be divided into certain categories according to the chemical content and sold as the “vitamins for skin health” or “supplements for creative kids”, etc. Overall, there are positive trends in terms of entering the market of vitamins in China, like high popularity of Australian products and large population in the country. However, the trend has already been explored by several foreign companies, including a large multinational like Pfizer. Finally, even if the trend will disappear, the possibility to withdraw from the market does not contain any serious risks. It is estimated that in the nearest couple of years the company will be able to generate huge profits.
References
Bhatia, G. (2015). China's Market For Vitamin And Mineral Supplements Face Challenge From Old-School Traditional Remedies. International Business Times. Retrieved from: http://www.ibtimes.com/chinas-market-vitamin-mineral-supplements-face-challenge-old-school-traditional-2111579
Evans, S. (2015). Australian vitamins selling out in China, as 'clean and green' demand soars. Financial Review. Retrieved from: http://www.afr.com/business/australian-vitamins-selling-out-in-china-as-clean-and-green-demand-soars-20150812-gix490
Foley, B. (2015). Surging Chinese Online Demand Powers Aussie Vitamin Sales. Bloomberg Business. Retrieved from: http://www.bloomberg.com/news/articles/2015-09-07/surging-chinese-online-demand-powers-aussie-vitamin-sales
Olivier, P. (2013). The dietary supplements market in China. Marketing China. Retrieved from: http://marketingtochina.com/the-dietary-supplements-market-in-china/
Plowright, M. (2015). China’s vitamin market harder to crack for western companies. Financial Times. Retrieved from: http://www.ft.com/cms/s/0/f1c82b58-fa2c-11e4-b432-00144feab7de.html#axzz41sILFRqD
Taylor, D. (2015). Chinese demand boosts vitamin and supplement industry. ABC News. Retrieved from: http://www.abc.net.au/news/2015-10-29/chinese-demand-helps-see-vitamin-makers'-shares-soar/6896444
