Nov 12, 2020|
In-Depth: JD Buyer: Navigating Imported Health Products on Behalf of Consumers
by Ella Kidron
Over 2,000 years ago Virgil said, “The greatest wealth is health”. In the time since, immense stress coming from multiple directions has caused many to forget this, forgoing healthy eating, good sleeping habits, exercise and more in exchange for economic prosperity and security. That has changed immensely with the global pandemic, especially in China where consumption of health and nutrition products is rising rapidly, particularly of imported products. During the Singles Day Grand Promotion (November 1st to 11th） JD saw imported health products on its platform grow rapidly reinforcing the newfound importance of this category. On Nov. 11th, the nutrition and health products category saw sales increase over five times in the first 30 minutes. The full say saw over 100% growth in sales. And, as of 5pm on the day, sales had already exceeded the whole of the 11th last year. The top three brands were By-Health, Swisse and Move Free.
“The pandemic has had a big impact on many industries, including health and nutrition products,” said Adeline Liu (Liu Ying), a buyer in the Health and Nutrition products category for JD Worldwide, JD.com’s platform for imported products. She joined JD in July 2019. “The industry has seen extremely rapid growth this year.”
Adeline Liu at CIIE in Shanghai
With Singles Day upon them, the team has been working with suppliers and partners to get the best prices for consumers for the holiday. Since Singles Day pre-sale started on October 22nd, which is earlier than previous years, we’ve been getting ready since early October,” Liu said. It just so happens that the Singles Day period also coincides with the massive China International Import Expo (CIIE) in Shanghai, on the sidelines of which Liu has managed to grab a few minutes for this conversation by phone.
Sourcing from over 100 countries and regions
Over the course of the week at CIIE, Liu and her colleagues met with and visited booths of dozens of brands on site, on the hunt for the right health products for JD’s over 417 million active customer base. CIIE and similar events are just one of the channels Liu relies on to learn about source products. Others include, prior to the pandemic, overseas business trips to meet with brands, as well as regular attendance at industry events and partnerships with foreign embassies in China.
“In addition to routine data analysis of internal and industry trends, we also go overseas to understand brands that are famous overseas but haven’t yet come to the Chinese market.” JD Worldwide source from over 100 countries and regions.Some of the most popular destinations include the U.S., Australia, New Zealand and Japan. Liu and her team would typically go on at least 10 business trips a year (overseas or domestic), but travel has been less frequent this year with the COVID-19 outbreak. Brands which consistently perform well on JD include EZZ, Doctor’s Best, Swisse, Blackmores and more.
EZZ promotion on JD for Singles Day
Even though business travel is not on the table at the moment given various quarantine measures and restrictions, Liu is kept plenty busy in China. With the pandemic, Chinese consumers’ attention to increasing immunity and improving overall health has meant a heightened awareness of and eagerness to purchase health products. In particular, products that improve immunity and nourish health have been well received by consumers. Long-term gastrointestinal management products (such as probiotics), bone health products, beauty and anti-aging products are all growing rapidly. “Compared to overseas markets, China’s nutrition market kicked off late and consumer awareness of these products isn’t as high yet as elsewhere.”
Navigating a complex market on behalf of consumers
The complexity of the market and the sudden frenzy created as a result of skyrocketing demand isn’t lost on Liu. Being able to adeptly navigate the market is challenging, but absolutely essential in her role as a buyer. Sometimes it means being able to identify real imported products from their imposters. Other times it’s about ensuring that the effectiveness of a product is not exaggerated. “There are plenty of products claiming to cure this and that illness.” It’s especially important to look out for this with middle-to-old age customers who might be less familiar with e-commerce. Interestingly, data Liu and the team have seen shows much evidence of young people buying products from older relatives. It’s something they keep in mind when advertising – choosing to focus on older parent and grown child scenarios, for example.
Going to all lengths to ensure quality
Nutrition products are different from other categories in that it might take a while to see their effects. “Usually you need to consume a product for at least a month before you see any changes – at very least two or three weeks.” For products where taste is a factor, the team will test it. Where taste is less of a factor, they rely on product information, brand history, and other details to make decisions. Once a product is selected, the team goes through an extremely stringent evaluation process to ensure quality. One of the important considerations is that the product actually contains the amount of whatever nutrient it claims it has.
Shelf stocked with nutrition products in buyers’ area at JD Headquarters in Beijing
First, buyers select products which comply with the local import regulations and that are on China’s Customs clearance list. Then they ensure that the products comply with JD platform quality management standards and specifications (including the accuracy of the product efficacy description). Once the product enters JD’s bonded warehouse, the company has full control over the quality and will randomly sample products to ensure consistency, and add traceability codes making it possible to trace the supply chain of the products.
JD undergoes extensive market research to understand which products might be most well-received by consumers on its platform and works with suppliers to get the most advantageous prices for customers. “Our international logistics system helps us achieve sufficient price advantages,” explained Liu.
Generally speaking, products of imported brands are more popular in China. “Many consumers associate international products with high quality, strict safety standards and even patented high tech, but we also see some quality domestic brands coming up.”
Sometimes products even out perform their expectations. The team engaged in an in-depth cooperation with the Canadian Embassy in Beijing, in which the embassy helped recommend products and brands that JD buyers would select according to consumer demand, consumer portraits and more. “Canadian seal oil was extremely well received. We didn’t expect that.” Whereas the more common fish oil contains two Omega-3 essential fatty acids, Eicosapentaenoic acid (EPA), and Docosahexaenoic acid (DHA), seal oil contains an additional Docosapentaenoic acid (DPA) and is believed to be even more beneficial.
“As consumers’ demand for health products gets more diversified and they consume more of them, it’s easy for them to feel like they’re taking a whole bunch of medication.” The team will look for creative products that get away from the feeling of endless pill popping. For example, instead of only looking at procuring pills, they will seek out vitamins in the form of chewy candy or even nutritional liquids. “This makes our product pool richer, and gives consumers more choices,” said Liu.
Matching precise user demand with supply is a focus. “We also have plans to do C2M for quality products with existing partners. In addition, our team will also go overseas to find more authentic, high quality products for consumers.” C2M, or Consumer-to-Manufacturer, is JD’s program to leverage consumption data across its platform as well as analysis of industry trends to help guide brands on product development and marketing. Liu’s team has already done some custom gift boxes and product combinations, but envisions having even more custom products down the line and are actively involved in relevant conversations.
Under the pandemic, China’s health products market looks immensely promising. With an estimated market size of RMB 330 billion yuan for 2021, JD’s buyers are fully aware of the importance of staying ahead of the trends. But it’s not just about providing a platform to buy health products. For JD, it’s about integrating the products into the entire consumer life cycle and combining them with services. Integrating JD Health’s family doctor program with doctors’ recommended suitable health products according to a users’ individual situation, for example.
Liu offers one final tidbit of advice for navigating the market, both in China and elsewhere. “When choosing a product, don’t pay too much attention to how high the nutrition content is. Rather look at nutrient absorption because there’s no guarantee your body can absorb all of the nutrients the product has. Choose the type of product that’s right for your body.”