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Research Report On Entry Into China's Medicinal Herb Market

Beijing Zeefer Consulting Ltd.
August 15, 2008
83 Pages - Pub ID: BJZ2118792
 
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Countries covered: China

Research Report On Entry Into China's Medicinal Herb Market

 
After the development for many years, a group of enterprises reputed as “China’s time-honored brands” have appeared in the field of traditional Chinese medicine in China, such as Guangzhou Pharmaceutical Company Limited, Yunnan Baiyao Group Co., Ltd., Beijing Tongrentang Group Co., Ltd., Tianjin Zhong Xin Pharmaceutical Group Co., Ltd., etc., which have gradually become the important parts of the developing traditional Chinese medicine industry. According to the data released by the National Bureau of Statistics of China, large-scale enterprises in China’s medicine manufacturing industry achieve a gross industrial output value of RMB 565.902 billion Yuan, a product sales revenue of RMB 520.723 billion Yuan and total profit of RMB 49.921 billion Yuan from January to November in 2007, up by 24.87%, 24.56% and 51.07% over the same period of the previous year respectively. From January to November in 2007, the traditional Chinese medicine industry achieves a gross industrial output value of RMB 158.453 billion Yuan and sales revenue of RMB 142.448 billion Yuan, which respectively take 28% and 27.36% in the gross industrial output value and sales revenue of medicine manufacturing industry. Besides, the concentration ratios of enterprise sales revenue and regional sales revenue of the large-scale enterprises have reached 40.58% and 63.16% respectively.

China is a big exporter of natural medicine in the world. The traditional Chinese medicine exported from China is mainly Chinese herbal medicine with a lower price and a large consumption amount, and the annual export volume accounts for 20% of the recollection (harvesting) mount of Chinese herbal medicine. In addition, as China is the cradle of traditional Chinese medicine and has a great population with about 50% people adopting traditional Chinese medicine for treatment when ill, the products of Chinese herbal medicine are mainly to meet the domestic demands.

The medicine material importers must be enterprises obtaining the Pharmaceutical Trading Enterprise Certificate issued by the Ministry of Health. The process from import to distribution of medicine material shall be inspected by the National Institute for the Control of Pharmaceutical and Biological Products, China Customs and the State Food and Drug Administration, so as to ensure absolute safety of imported medicine material. Furthermore, the State Food and Drug Administration and China Customs promulgated the Non-initial Directory of Imported Medicine Material in 2006, in which a strict management system for medicine material import guarantees the quality of medicine material and at the same time restricts the rapid growth of medicine material import to a certain extent.

In 2007, the import quantity of herbal medicine products reaches 19.1 thousand tons, which is down by 25.96% over the same period of the previous year and is 0.96 times of that in 2003. The average annual rate of growth from 2003 to 2007 is 4.13%, wherein, the largest increase is achieved in 2004, with an annual rate of growth of 46.1%. The import amount of herbal medicine products is $34.2656 million dollars, which is up by 63.37% over the same period of the previous year and is 1.05 times of that in 2003, and the average annual rate of growth from 2003 to 2007 is 9.70%.

The major places of origin for China’s imported herbal medicine products are mainly in Asia. In 2007, the main places of origin for China’s imported herbal medicine products are countries and areas such as Thailand, Taiwan and India, wherein, the herbal medicine products imported from Thailand are 2,913.73 tons, taking 15.26% of the total import quantity of herbal medicine products, from Taiwan are 2,296.67 tons, taking 12.03% and from India are 2,188.22 tons, taking 11.46%. The total import quantity from the aforesaid three countries and areas is 7,398.63 tons, occupying 38.76% of the total import quantity of herbal medicine products.

Affected by China’s dual economic structure as well as the urban and rural per capita income level, the consumption market of Chinese herbal medicine in urban areas is different from that in rural areas. In 2007, the per capita disposable income of urban residents is RMB 13,786 Yuan, up by 17.24% over the same period of the previous year, and the per capita medical care consumptive expenditure is RMB 699 Yuan, taking 6.9% of the total per capita medical care consumptive expenditure; while the per capita net income for rural residents is RMB 4,140 Yuan, up by 15.42% over the same period of the previous year, and the per capita medical care consumptive expenditure is RMB 210 Yuan, taking 6.5% of the total per capita expenditure...

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