Health supplements to Taiwan

Trends and opportunities

The market

The concept of taking care of deficiencies in the body through supplement use is a familiar one to Taiwanese consumers, and historically was done by taking herbs or other traditional medicine. However, growing awareness and increasing health concerns have resulted in a rise in the use of modern health supplements, especially natural health supplements. The sales of consumer health products in Taiwan reached A$2.8 billion, a four per cent growth compared to 2015 (Source: Euromonitor International- Consumer Health in Taiwan, October 2016).

The largest categories in consumer health are vitamins and dietary supplements, herbal/traditional products, weight management, and over-the-counter (OTC) products (Source: Euromonitor International- Consumer Health in Taiwan Euromonitor, Table 3: Sales of Consumer Health by Category, October 2016).  Due to rising concerns associated with prolonged use of electronic devices, eye health supplements have seen the most change, with an eight per cent growth in 2016 (Source: Euromonitor Internationa- Vitamins and Dietary Supplements in Taiwan, October 2016). 

As Taiwanese consumers are increasingly time poor, the use of OTC products for colds and digestive problems has seen consistent growth. This type of self-medication is also encouraged by local government to ease the financial pressure on the National Health Insurance scheme, and the OTC product category is expected to see continued growth. 

 Sales of consumer health by category: Value 2013-2016 (TWD million)
                                                 2013               2014                2015                  2016          
OTC 12,516.3         12,965.1            13,394.1            13,790.2
Sports nutrition 922.6 982.3 1,037.6 1,091.5
Vitamins and dietary supplements   58,749  61,433.3  64,267.1  67,054.1
 Weight management and wellbeing      14,374.3  15,104  15,796.3  16,446.5
 Herbal/traditional products  35,600.1  37,173  38,645.9  40,047.4
 Allergy care  231.8  237.6  243.8  250.3
 Paediatric consumer health  831.8  856.2  878.3  893.1
 Consumer health  86,562.2 90,484.6
 94,495.2  98,382.4

 

(Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources).

Competitive environment

Most major international health food companies have a strong presence in the Taiwan market. It is particularly dominated by major United States (US) pharmaceutical companies and direct marketing companies. These companies have invested heavily in marketing and promotion in order to increase brand awareness and sales.

While international players need to pay 30 per cent tariff duty, local health supplement manufactures offer a wide range of health food supplements at competitive prices.

Opportunities

Australian health supplements enjoy a strong reputation among Taiwanese consumers as premium quality, clean, green and safe due to a well-regulated environment.

Elderly consumers

Taiwan has a rapidly ageing population, resulting in a growing number of elderly consumers looking to increase their quality of life. Elderly consumers are willing to invest money on products that they believe will keep them healthy, and prefer to take supplements based on their own judgement and assessment of their health condition. They are strongly influenced by word of mouth and referrals from friends or family, and don’t often consult medical professionals when taking health supplements. Taiwan also has a strong gift giving culture, vitamins and supplements are a popular gift for older family members. Elderly consumers prefer to buy high-quality imported products from countries known for their high regulatory standards, including Australia.

Younger consumers

In recent years younger Taiwanese consumers are also becoming increasingly health and nutrition conscious. They believe health supplements can balance out their unhealthy and unbalanced diets and improve energy levels for work.

Challenges

Regulatory environment

The regulatory environment is complicated and inconsistent, products require premarket approval by the Taiwan Food and Drug Administration (TFDA), however, interpretation and enforcement of regulations by TFDA and by municipal governments can be inconsistent. This means that pre-market approval of tablet food by TFDA does not guarantee that local health bureaus will agree that the label is in compliance with regulations.

Competitive environment

Health supplements face strong competition from international companies whom have invested heavily in marketing and promotion, and local companies whom provide competitive price points.

Tariff rate

Health supplements imported to Taiwan have a 30 per cent tariff rate.

Health claims

Health claims related to additional physiological functions, organ health, changes in physical appearance, nutrient deficiency diseases are prohibited in Taiwan

Tariffs, regulations and customs

Information on import tariffs applied for Australian health supplements can be found on the General Customs page for all products.

Examples of tariffs:

Food preparations, in capsule or tablet form: Tariff No: 21069099.20.8, Tariff rate:  30 per cent Other medicaments containing vitamins or other products: 
Tariff No: 3004.50.00009
Tariff rate: zero per cent. 

Regulations

THY Taiwan International Law Offices produced the comprehensive report Introduction of the Regulations on Imported Nutrition supplements of the Republic of China.  Below is a brief summary of the report:

  1. Nutrition supplements are defined as ‘food products’ and subject to the Act Governing Food Sanitation and Safety.  Pursuant to paragraph 1 of Article 21 of the Act Governing Food Sanitation and Safety, food products that are designated by TFDA are required to file a production registration application with FTDA and procure the permits from TFDA before importation. The designated foods including health food, special dietary food, and packaged tablet or capsule foods.
  2. Health foods – The term ‘health food’ refers to a food product which furnishes specific nutrients or has specified health care effects based on Article 2 of the Health Food Control Act.
    • The Health Food Control Act: The Health Food Control Act prohibits a food product without a health food permit from being labelled or advertised as “health food in Taiwan. In order to obtain a health food permit, an importer shall submit the information of the product’s ingredients, specifications, functions and effects, manufacturing process, methods of analysis and other relevant data and documents to TFDA for review and testing application. When the product meets the requirements of the review and test, TFDA would grant a health food permit.  Then the product is allowed to be labelled and advertised as “health food
    • Enforcement Rules of Health Food Control Act
  3. Packaged tablet or capsule foods: According to the current laws, the importer of packaged tablet or capsule foods shall file product registration application and obtain a registration permit for package tablet and capsule food. It takes TFDA 60 working days to review the application.
  4. Nutrition supplements packaged in other forms: The nutrition supplements which are not packaged in tablet or capsule forms such as collagen drinks are not required to obtain a product registration permit.

Other important regulations include:

Marketing your products and services

Market entry

Importing health supplements to Taiwan can be a difficult process as all registration documents are in Chinese. Hence, it is suggested that Australian exporters find a local business partner as an agent or distributor to handle the import procedures and registration. Many established importers are very interested in the private label method for sales and not in being an agent or representative of a foreign supplier.

Ingredient sourcing from Australia

To avoid the high tariff rate of 30 per cent for imported health supplements in capsule or tablet form, some Taiwanese distributors and importers import Australian ingredients for further processing in Taiwan. They look for high quality and unique ingredients from Australia such as: kangaroo essence, lanolin, fish oil, Manuka honey and collagen (export countries must be non-foot and mouth disease countries for Taiwan). The finished product is usually marketed to high-end consumers.

OEM in Australia

For high-end markets, consumers prefer ‘Made in Australia’ health supplement products, as it represents the ingredients and the manufacturing process and environment are under the Australian GMP practice and quality is assured. Therefore, some Taiwanese companies do contract Australian GMP manufacturers to manufacturer health supplements under their brand names.

Bulk import

Taiwanese consumers tend to prefer health supplements imported from overseas as they offer more variety than domestic brands and are seen as being of a higher quality. Despite this, it is more cost-efficient to import in bulk rather than establishing a brand name that takes time and requires significant investment in advertising. This reduces importer’s costs, but as a result, no brand name is established.

Finished products to Taiwan

This is the most challenging segment for Australian companies. A tariff rate of 30 per cent is applied to all imported finished health supplement products in capsule or table form. Products must be price competitive and have separate budgets for product registration, marketing, promotion and after-sales services to support their local distributors for product promotion in Taiwan.

Distribution channels

Health supplements distribution channels

Importers> Agents or Country distributors*> Local or regional distributors> Hospitals/Clinics

* Agents or Country distributers are a special channel (including aged care centres), and other retail channels listed below.

The distribution channels for health supplement products to consumers in Taiwan include:

Direct selling
  • 32 per cent market share in 2016
  • Total market share has been declining due to a boom in internet retailing.

(Source: Euromonitor International- Vitamins and Dietary Supplements in Taiwan. October 2016).

Pharmacies
  • Branded para pharmacy chain stores
  • Japanese drugstores have expanded rapidly from 2014 to 2016.
Internet retailing
  • Government regulations still prohibit the sale of certain items online.
  • Major companies have all developed their internet presence.
TV Shopping Channels
  • ETmall and MOMO are the main TV shopping leaders in Taiwan
  • Women aged between 25 and 50 constitute the main customer base for the TV shopping market.
Other retail channels
  • Costco has a huge health supplements section in their stores.
  • Health/Organic food specialty stores.
  • Post offices.

Links and industry contacts

Government, trade and business

General Customs page for all products
TFDA website

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