China’s Wellness Renaissance: Herbalife Seizes the Moment 

By Norris Tangen

China’s wellness industry is having a moment. Pre-pandemic, in 2018, fueled by a burgeoning focus on health and well-being among its populace, the wellness industry was already on the rise. A 2018 survey revealed that 80% of adults over the age of 20 surveyed exercised regularly for the past five years. Since then, this trend has only intensified, with China now representing the second-largest wellness market in the world, valued at US $683 billion. Herbalife China’s new Managing Director Stella Tsai appreciates the magnitude of this opportunity. “Although I have been with the company for 24 years, this is actually my first time to work in Herbalife China,” she shares. In her first three months on the job, she has immersed herself in the intricacies of the Chinese market, engaging with distributors, employees, and customers across the country. “The vibrancy, potential, and diversity of the Chinese market are truly inspiring,” she reflects, acknowledging the profound impact of China’s wellness boom.

Founded in 1980 by American entrepreneur Mark Hughes, Herbalife has emerged as a global leader in the nutrition and wellness sphere, offering a diverse array of dietary supplements and personal care products. In China, Herbalife has steadily expanded its footprint, establishing itself as a cornerstone of the nation’s wellness ecosystem.

Looking ahead, Tsai envisions continued growth and innovation in the Chinese market. “The Chinese government is determined to continuously expand high-level opening-up and optimize the business environment, taking active measures to stimulate the vitality of business entities, including foreign-funded enterprises,” she says. Bolstered by initiatives such as the “Healthy China” program, aimed at promoting public health and well-being, Tsai believes the Chinese market offers enormous growth potential and opportunities for Herbalife.

New Year, New Priorities

Tsai says that the company’s 2024 priorities will focus on promoting business, stimulating the market, and improving operational efficiency. “In terms of promoting business and stimulating market, Herbalife will hold the ‘China Extravaganza’ which is our largest annual marketing event, in Chengdu in April.” In the lead up to the event and throughout the year, the company also plans to launch multiple measures to better support distributors and serve customers. “We hope to help new distributor showcase their talents on the platform of Herbalife, support them help more people live their best lives through more solid and stable customer base, and discover better career opportunities in this process. At the same time, we hope to make customers truly feel respected and have closer connection with Herbalife,” Tsai says.

In terms of operational efficiency, Tsai says they are introducing the Global Business Services/Center of Excellence (GBS/CoE) model that has already been successfully implemented in countries including in Mexico, Poland, and Malaysia. The GBS/CoE model centralizes and standardizes various functions such as finance, human resources, IT, and procurement, allowing for streamlined processes and improved service delivery across the organization. Tsai says that establishing the company’s new Dalian GBS center will help better adapt Herbalife China’s operations to the larger growth potential anticipated in the future, facilitating scalability and agility in response to market dynamics.

Innovation Fuels Growth

Tsai emphasizes the pivotal role of innovation in Herbalife’s China operations, stating, “For the nutrition and health industry, technological innovation plays a core role in high-quality development.” She highlights the deep integration of modern biotechnology, information technology, manufacturing technology, and the health industry, which continuously give rise to new production processes, products, and service models, significantly enhancing production efficiency and product quality.

Tsai also underscores Herbalife’s commitment to enhancing local innovation capabilities, noting the establishment of the China Product Innovation Center (CPIC) as a significant milestone. She shares, “We have continuously increased local efforts in new product categories, tastes, and packaging,” citing over 40 new product launches in China over the past three years. Additionally, she expresses excitement about CPIC’s global impact, revealing that since 2022, Herbalife China has supported markets in Asia Pacific, Brazil, and Europe in packaging development, solidifying China’s position as a global innovation hub within the Herbalife ecosystem.

Regarding digital transformation, Tsai highlights Herbalife China’s strategic investment in digital technologies to drive operational efficiency and empower distributors. She explains, “The Company started digital transformation in China in 2019 and now we are moving towards Digital Strategy 2.0,” focusing on enhancing the B2D2C model through innovations like the Virtual Distributor Buddy (VDB) and digital operational excellence.

China Market Localization

In response to the evolving demands and preferences of Chinese consumers, Tsai highlights Herbalife’s commitment to localized, customized, and sustainable business practices. She elaborates, “In recent years, we have observed a significant increase in demand for health products among Chinese consumers, characterized by diversity, personalization, and precision. Products with a single type can no longer meet their growing needs.”

Tsai underlines Herbalife’s dedication to strengthening local product innovation and manufacturing capabilities in China to develop high-quality innovative products tailored to the diversified needs of Chinese consumers. She explains, “Relying on CPIC, we have increased local efforts on innovation in new product categories, tastes, and packaging.” Recognizing the importance of the younger, ultra-online demographic in the Chinese market, Herbalife has expanded its business focus from traditional weight management to include a wider range of vertical areas such as healthy drinks, sports nutrition, and daily nutrition.

Tsai shares some successful local product innovations, “In 2022, we successfully launched a product that was the direct result of innovation for the China market – our DHA Gummy, the first gummy product of Herbalife globally.” Additionally, she mentions the immediate popularity of other new products introduced in 2023, including Herbal Tea Concentrate (Honey Ginger Flavor) and the Youth Shake. To cater to customers’ on-the-go lifestyles, Tsai points to the introduction of portable packaging products such as the ‘Shaker Ball’ and ‘Stick Pack’ in recent years, further enhancing consumer convenience.

Regarding local manufacturing, Tsai discusses the localization of the Herbalife24 line, stating, “Herbalife24 is a comprehensive performance nutrition line dedicated to assisting active individuals and athletes in reaching their goals. To cater to the demands of the younger, fit, and active demographic, we introduced the Herbalife24 series into local production at the Nanjing factory in 2020.” Furthermore, she highlights the establishment of another new production line at the same Nanjing factory in 2022, enabling the localization of the entire manufacturing process of Herbalife’s Tea Concentrate and reducing product launch time to one-third of its previous duration.

Reduce, Recycle, Reuse, and Redesign

As sustainability takes center stage on the global agenda, moving towards more sustainable product packaging is a top priority for Herbalife. Tsai highlights the global concern over plastic pollution and Herbalife’s commitment to sustainable practices that benefit people, communities, and the planet. She explains, “We are strengthening environmental stewardship throughout our value chain to protect and regenerate environments for us and our future generations, including reducing the use of product packaging.”

To achieve this goal, Herbalife is aligning with industry trends of “reduce, recycle, reuse, and redesign” in the packaging sector. In China specifically, the focus is on reducing material usage. Through the efforts of the CPIC, the company has successfully reduced virgin plastic usage by implementing changes such as transitioning from rigid plastic containers to flexible pouches and redesigning biodegradable materials as replacements. Tsai highlights a notable initiative where biodegradable materials are applied to air bags with the “jj” logo printed on them, indicating their eco-friendly identity. This initiative not only reduces environmental impact but also raises awareness among service providers and customers about environmental protection. The success of this program was recognized when it won the Green Awareness Advocacy Award of the “M. Success Cup” in 2023.

In 2022, Herbalife launched their product canister recycle campaign in China, encouraging customers to recycle their used canisters at nutrition clubs across the country, promoting a circular economy and reducing waste. Beyond plastic, Tsai says they are also exploring opportunities to reduce other materials in packaging, such as paper and glue, across various product lines.