Z Generation Health Care Army Holds Up A Trillion Market: Unicorns Flock To VC Gambling Track

Xu Mengyi, researcher of the 21st century innovation capital research institute

"Stay up late to apply facial mask, cola soak wolfberry", the popular "punk health" in recent years, is the youth's self darkness and helplessness“ "Make up while wasting" became their last stubbornness.

The successive appearance of new health care brands also indicates the opportunities and pain points of this era, and keen capital sniffs out the huge power behind this "new consumerism".

Since 2020, many health care and health care brands have obtained financing, and Sequoia Capital, IDG capital, Meihua venture capital, GGV Jiyuan capital, Hillhead venture capital, Gaorong capital, Tiantu investment, Qingsong fund, Qingliu capital, and Aurora Borealis venture capital have entered the health care track.

At the same time, the time-honored domestic products have also joined this trillion scale chase race. According to the incomplete statistics of the 21st century innovation capital research institute, large pharmaceutical enterprises such as Jiangzhong pharmaceutical, Harbin Pharmaceutical Group and jiankangyuan have successively entered the health care field.

Food tonic, medicine tonic, sports, although the way "punk", but the banner of health has been carried by "generation Z". According to the data released by alihealth, during the "6.18" period in 2020, the sales of eye care products on the platform increased by 4126%, protein powder increased by 751%, and vitamin products increased by 387%. Among them, "generation Z" has become the main consumer, with an increase of 126% over the same period of last year.

New consumer groups have new experience and Practice on health and health preservation: in terms of diet, they pay attention to zero sugar, light salt and low fat, and they should eat healthily from the source; In life, a variety of offline dietotherapy, tea, spa and other "health bureaus" have sprung up; In terms of brand choice, they prefer high appearance, national fashion and instant use.

According to the report on the market development status and investment prospect of China's health care industry from 2017 to 2022, the current scale of China's health care market has exceeded one trillion yuan, with an average annual expenditure of more than 1000 yuan per urban resident for health preservation. Among them, the young people aged 18 to 35 account for 83.7%. Young people have become the main force of health care consumption.

In any case, the "generation Z" of "cherishing life" is particularly concerned about the pursuit of health, and has joined the tide of "fancy health preservation".

In 2020, within one hour of the "double 11" day, the turnover of Jingdong health nutrition products increased by 500% year-on-year, and that of the whole day increased by nearly 200% year-on-year. Health track in the cold period of 20 years after the rapid recovery.

At the beginning of 2021, the policy began to slow down the strict control of health care products. It is a very obvious signal that food grade sodium hyaluronate can be used to add ordinary food. Compared with traditional health care products, functional food is more in line with the taste and appearance of young consumers. Functional food forms emerge one after another in the market. Businesses meet different needs of users through powder, jelly, beverage, soft candy and other forms.

At the end of last year, lemon box, a customized vitamin DTC brand, received millions of US dollars of pre-A round financing, followed by panda capital and Zhonglin capital; In the same period, the left point of the smart health technology brand, which is positioned at the use scene of new consumers, announced the completion of a + round financing of more than 100 million yuan, led by hillhood venture capital, Qingliu capital, Tiantu investment, Tongchuang Weiye and Biguiyuan venture capital.

Industry insiders have publicly disclosed that some enterprises directly won several TS (investment intent letters) even without any products or even ppt at the initial stage. Wu Shichun, founder partner of Meihua venture capital, said that with the improvement of public consumption level, the standard of consumer products will be higher. In this environment, the rise of new domestic brands is inevitable, and the development of health care products industry also needs new brands and products to iterate.

According to AI media consulting research report, in the past six years, the market scale of health care products industry has maintained a double-digit growth rate, reaching 222.7 billion yuan by 2019, and is expected to exceed 330 billion yuan in 2021.

In such a big environment, health track for new people has been given a huge imagination space“ "Xingui" brands are also changing their styles to win the favor of the new generation of people. Major mainstream manufacturers have launched "punk health" foods that meet the taste of young people, such as "warm stomach coke with ginger juice and heating", drinking not fat chocolate milkshakes, and "0-calorie" bubble water.

Zhang Fang, partner of Qingsong fund, explained to the 21st century innovation capital research institute, "the so-called new people are the post-00s and post-95s. At first, everyone thought that health care products were for the middle-aged and the elderly, but now young people are very willing to eat health products, such as poor sleep, want to quickly relieve alcohol, and so on. These are the new needs of new people. At this time, we can't use the same old ways for the products, packaging and publicity that we do. "

Is this new track of health preservation, which is swarming with capital, a new species of consumption upgrading or an old story of new bottles of old wine? According to public data, 345 health care related enterprises in the market have obtained financing in a year and a half since January 2020, and even some investment institutions have summarized 2021 as "the industry year of functional food".

"When the post-95 generation and the new generation come to the center of the consumption stage, 99% of the products can be redone." Gao Hongqing, CEO and managing partner of Lianchuang capital, once mentioned that the essence of the rise of new retail is the new needs of new people. Most of the modern marketing channels of new health products come from the most popular head anchor recommendation, little red book notes sharing and wechat circle of friends advertising, etc. wonderlab, a small fat bottle serving as a substitute for meals, covers these three main marketing channels. Zhang Fang, partner of Qingsong fund, believes that "from the initial public account to the small red book, quick hand and shaking tone at the back, if the start-up company can make good use of these new channels, it will be easier to achieve some results."

The 21st century innovation capital institute has found that these new consumer brands have three common characteristics, which make them easily favored by VC. First, almost every brand has been invested by the market head fund in the past year; Second, the company's core team members have the background related to brand marketing; Third, the product positioning of these companies is aimed at the new consumer power, positioning young health, oral beauty health, etc.

"What we do is punk health care, which can be both delicious and useful." Kang Le, founder of buffx, said that the most classic example of punk health care is wolfberry in cola, which is what buffx is doing. Functional food has started rapidly in China. Since 2020, several enterprises focusing on the concept of functional food have obtained financing. Buffx has obtained three rounds of financing from April 2020 to March 2021. It can be seen that the popularity of functional food is not a source of water, but a new category iterated out under the outbreak of consumption capacity and new consumption demands. According to the forecast of "2020 functional snacks innovation trend", the functional food market is expected to reach 500 billion yuan in the next few years, of which functional snacks are expected to account for 150 billion yuan.

In the process of sorting out the financing situation of new consumer brands, the Institute of innovation capital in the 21st century has noticed that the longest developed brands among the invested companies have only been established for less than two years, and even many companies have launched products almost recently. VC crazy bet is more like "gambling" the cycle of health track. At present, the domestic health track is still in the blue ocean, and the industry penetration rate is only about 20%. In the same period, the highest penetration rate of functional food in the United States has reached 73%. With the overall consumption capacity of the people and the general trend of the times, the health care army under the new consumption force and the inevitable aging population in China will be the natural high viscosity consumption objects of the health care industry. It is worth noting that the gross profit margin of Tomson Beijian has been stable at about 65% in the past ten years. At present, the gross profit rate of health care products is still under estimation. In addition, health care products have a natural high repurchase rate, once consumers recognize the product, they will buy back.

(this paper is the result of the consumer service research of the industry investment and Financing Research Institute of the 21st century.)

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