Fashion
Online shoppers in China are steadily increasing their purchases of health products, and that offers an opportunity for popular U.S. brands of nutrition supplements. E-commerce sales of Pfizer’s health products, including popular supplements like Caltrate and Centrum, are growing at a more than 100% every year in China, according to Don Kerrigan, Pfizer’s vice president of Global Commercial Excellence & Activation.
In fact, China has become Pfizer’s second-largest market for health products, exceeded only by the U.S. More than 200 million Chinese consumers have purchased health products from Pfizer, Kerrigan says.
Many of those consumers purchase Pfizer products online, even though Pfizer does not operate its own e-commerce site in China. Instead, it has been selling since 2012 through an official storefront Tmall in 2012, one of the two giant online shopping portals operated by China’s leading e-commerce company, Alibaba Group Holding Ltd. Pfizer also sells on JD.com, Alibaba’s leading competitor, and other marketplaces in China, including Yhd.com, which is owned by Wal-Mart Stores Inc.
Leveraging marketplaces enabled Pfizer to quickly begin selling online in China, Kerrigan says.
The massive traffic to Alibaba’s online marketplaces in China—those marketplaces, mainly Taobao and Tmall, generated $449 billion in sales in 2015, Alibaba says—means companies like Pfizer can gather a tremendous amount of information quickly about what Chinese consumers like, Kerrigan says. That lets relatively new players like Pfizer test the market and respond quickly.
“An e-commerce platform like Tmall can provide data on what consumers are buying in different categories,” Kerrigan says. “You can gain insight into what else they’re buying, and how consumers are managing their health or their wellness. That is helpful to us in how we build out broader solutions for consumers.”
While many overseas brands employ e-commerce service providers to manage their web sales in China, Pfizer relies on its own 17-person team in China.
The explosive growth of online shopping in China can make it difficult for brands like Pfizer to anticipate demand. Kerrigan says his business ran out of stock within hours of the beginning of the annual Singles’ Day online sale last Nov. 11.Alibaba says its Singles’ Day 2015 sales grew 60% over the 2014 event to $14.3 billion.
Pricing is another issue as some merchants or individuals sell a brand’s products at low prices on China’s big web marketplaces. To differentiate itself from these sellers, Pfizer has developed specific products to sell only through e-commerce channels in China.
