November 18, 2009

Hoping to capitalize on the growing disposable incomes of China’s rapidly expanding middle class, NBTY is working to increase its presence in the country that will soon be home to the world’s largest economy. Although the U.S. dietary supplement leader is certainly not alone in its desire to sell more products in China, what sets the company apart from its competition is its desire to grow its China business organically instead of through partnerships with local Chinese companies, NBTY President and Chief Financial Officer Harvey Kamil told Nutrition Business Journal. “Many companies say they’re doing business in China but they’re doing a joint venture,” he said. “We’re not, we’re direct in China.” NBTY currently employs 40 Chinese citizens and hopes to increase the presence of the Nature’s Bounty brand throughout the country.

Kamil said he believes China has a great deal of untapped market potential, but hurdles remain before his company can access the number of consumers it hopes to reach. “We believe what is holding [the Chinese market] back are the price points,” Kamil said. “While they are starting to have a much larger middle class, we believe the products are still too expensive. While they are purchasing supplements, if prices start coming down there will be a much greater interest.”

Having a local presence will help NBTY control price points and develop a greater understanding of the culture and what it takes to succeed in a vastly different market from the United States, Kamil added. “It’s a unique and big market—it’s important to be local there,” he said. “In two to three years, there is going to be more availability of product that is more competitively priced.”

NBJ will quantify the burgeoning Chinese market in the upcoming 2009 Global Nutrition Industry Overview, which publishes in December. To order a copy of this 48-page double issue, subscribe to NBJ or download a free 32-page sample issue, go to NBJ’s subscription page.

Related NBJ links:
What Will it Take for China to Surpass the U.S. in Supplement Sales?
NBTY Solidifies Status as No. 1 Supplement Company With Record Year
Private-Label Success Helps Push NBTY Stock Price to 52-Week High

Related Functional Ingredients magazine links:
DSM Expands Contracts in China