In Guangdong where the pharmaceuticals and health products market is fiercely competitive, a new sales approach has recently emerged whereby a customer is allowed to try out a product and return it unconditionally if the product does not satisfy him or fails to deliver the effects claimed. This sales approach has, however, caused widespread concern among consumers and triggered a great deal of repercussions in the realm of marketing.
In mid-March 2004, Guangzhou Yipintang Co launched a free trial marketing tactic in Guangzhou and Shenzhen for the first time. Consumers would get a premium pack valued at Rmb16 attached to the packing of the company's core product, aloe vera detoxifying capsules, on purchase of the latter. Consumers could try out the premium pack and, if dissatisfied, return the main product pack to the company and get a refund of the purchase price.
Assistant Professor Zhou Cheng of the Guangzhou University of Traditional Chinese Medicine reckons that the free trial marketing approach introduced in the pharmaceuticals and health products sector can be regarded as an extension of the "three guarantees" (guaranteed maintenance, exchange and return) policy in China's consumer goods market. However, a person in charge of the Guangdong Consumer Council disagrees and points out that this marketing approach is in effect a strategy on the part of the manufacturer to boost sales. Some customers, on the other hand, said the free trial marketing approach helps to reduce their buying pressure. Given the current disorderly health products market, this marketing approach can at least help customers ensure that the products in question are not fake or sub-standard.
The emergence of the free trial marketing approach can be traced back to the fierce competition in the cosmeceuticals and health products market. After close to a decade of advertising, detoxifying beauty products have already gone into the harvesting stage, with domestic sales approximating Rmb2 billion last year and the popularisation rate reaching 0.8%. According to the 3% international standard, the ultimate market size will be in the region of Rmb5 billion. The tremendous growth potential of the detoxifying beauty products market proves attractive to investors both at home and abroad.
Following China's entry into the WTO, import tariffs of pharmaceuticals have on average been slashed by 60%. Imports of natural botanical medicines, including detoxifying beauty products, into China are forecasted to double in volume over the next few years. Against this backdrop, foreign brands are making aggressive moves in the mainland market.