As the world’s second-largest healthcare market, China spends about $575 billion a year on the sector, roughly equivalent to Sweden’s GDP. But because of China’s large population, that translates into only $420 in per capita healthcare spending, just 4% of what an average American spends. This healthcare supply shortage is exacerbated by rising demand from wealthier Chinese who seek quality care, better insurance, and diverse services.
On the regulatory side, the Chinese government continues to reform the healthcare sector by allowing doctors to work
outside the public hospital system, encouraging the privatization of hospitals, and expanding public healthcare insurance to cover private hospitals.
The significant mismatch between supply and demand, coupled with policy changes to support the sector, have incentivized private investment to flock into areas ranging from advanced pharmaceuticals and medical devices to primary care clinics, elderly care, and insurance products.
By-health is primarily engaged in the production of nutritional supplements, including vitamins, fish oil capsules, calcium tablets, among others. The company imports raw materials from 23 countries, including the United States, Australia, and Brazil. It invests in new product development through collaboration with research institutes, including the Rowett Institute of Nutrition and Health at the University of Aberdeen. The company in recent years expanded further into the healthcare industry and has invested nearly $30 million into the GF Xinde Life Science Investment Fund.
In 2016, the company established a joint venture (JV), Bounty of Health (Hong Kong) Co. Ltd., in collaboration with global nutritional supplement giant NBTY Inc. By-health invested at least $22 million for a 60% stake. In return, NBTY transferred two premium brands, Nature's Bounty and Met-RX, to the new JV.