Guest post by Thibaud Andre

Traditional Chinese medicine (TCM) is a wide range of treatment developed in ancient China and favors natural aspects of medicine with herbal therapy, acupuncture, certain exercise training (气功), and massage (推拿). Extremely popular in China today, TCM is still a new field in many Western countries. However, Westerners are more and more attracted by these practices and a very profitable market is growing all around the world. The challenge for Chinese companies will be to take advantage of this worldwide trend despite the competition of countries with better technology and cheaper prices.

TMC Traditional Chinese Medicine: A Profitable Worldwide Trend

According to the China’s National Bureau of Statistics, the TCM market totaled more than ¥515 billion yuan in 2012, accounting for 31.24% of the total medicine industry. It has been one of the fastest emerging activities in China and has a huge potential to increase further. Additionally, beyond China’s borders, it is becoming more and more recognized, with about 70 countries that have made laws directly related to it and nearly 120 countries which have TCM institutions. Overall, the worldwide TCM market is increasing by 10% to 20% on a per year basis.

Why TCM can’t be replaced by Western medicine in the Chinese mind

According to the Chinese point of view, TCM’s medical effects last longer and have less adverse side-effects. On the top of this, some studies conducted by Chinese authorities showed that TCM can also lessen pain and decrease the incidence rate of coronary heart disease; Western medicine has yet to discover how to prevent cardiac problems.

Moreover, the Chinese government assumes that, due to the abuse of many potent Western antibiotics, some bacteria have already developed resistance to them, and therefore have published policy to restrict the use of such medicines. TCM, on the other hand, is presented as an effective treatment for most infectious diseases, allowing for a potentially larger market on the TCM side.

Indeed, some popular TCM remedies have effective antibacterial functions, such as Shuanghuanglian mixture (双黄连口服液) and Banlangen granules (板蓝根颗粒). While their mechanisms of antibacterial effects are different from Western medicine, the main difference lies in their way to cure, namely, curing diseases by greatly improving the body’s immunity so that bacteria will not develop a resistance to them. Therefore, Chinese specialists predict modern TCM has a promising future in treating factious diseases, and many Chinese families only consider using TCM for home remedy.

Why more and more Westerners are being attracted to Chinese Medicine

Even if Japan remains the top country for traditional medicine export, TCM’s market is increasing rapidly in many Western countries — including the United States — where acupuncture now has legal status in the majority of states. Advantages of TCM have been known to the American public and the demand has increased rapidly.

In 2007, for the first time, the U.S. recognized TCM as a medical system with a complete theory and practice organization. There are now also more than 60 TCM schools in America that have been authorized by the government, and with the continuous arrival of clinics and schools, we can potentially expect to see TCM being fully accepted by American culture; in other words, a trend going beyond China’s limited borders.

Can Chinese brands take advantage of this worldwide trend for TCM?

acupuncture Traditional Chinese Medicine: A Profitable Worldwide TrendDespite this intense growth, TCM is still a new field in Western countries. Therefore, intellectual property for TCM is not protected properly, and many foreign firms are able to buy recipes for TCM at very low prices. Furthermore, many of these firms then apply for patents with these recipes, which hinder the further development of China’s TCM market.

Many countries have invested a lot of money in research on Chinese herbal medicine and natural plants and Chinese companies should not take their competitive advantages in the TCM industry for granted; otherwise, they will lose these advantages sooner than later.

Countries like Japan and Korea are grabbing market share in the international TCM industry as well. With their new technologies being much better than those owned by Chinese companies, some foreign Asian TCM brands have started seeing success in China. Medicine like Jiuxinwan (救心丸) and Niuhuang drinks (牛黄清新液) from Japan and Niuhuang tiny capsules (牛黄清心微胶囊) from Korea sell well in China. Additionally, these are much more profitable than the average level of other similar TCM in the market.

On the top of this, many Western companies manufacture similar products and their market share is growing rapidly. America and Canada themselves have even built up supply bases for traditional Chinese medicinal materials, which further squeezes China’s market share of raw materials used in TCM.

 

374193 3011027085566 661669269 n 290x290 Traditional Chinese Medicine: A Profitable Worldwide TrendThibaud Andre is a French consultant working at Chinese market research firm Daxue Consulting.  He is passionate about Chinese culture and likes to share insights about the many emerging markets of the Middle Kingdom.