The Global Demographic Tailwind

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China’s Weight-Loss Industry Is Gaining

[This article should be read in conjunction with the stories in #msg-49465915, #msg-48221983, and #msg-47908751; the table in #msg-48556414; the bar chart in #msg-40906989; and the sound-bite in #msg-38038167.]

http://www.businessweek.com/magazine/content/10_24/b4182013742927.htm

›Affluence, more sedentary lives, and an increase in processed foods are driving sales of health foods and gym equipment. Bariatric surgery is up too

June 3, 2010, 5:00PM
By Frederik Balfour

As an only child growing up in Shanghai, Simon Wang was plied with dumplings, ice cream, and Kentucky Fried Chicken by his parents and grandparents. After tipping the scales at 220 pounds, the 26-year-old decided to join Weight Watchers last month.

"I will get a heart attack more easily than a normal person," says Wang, who is 5 feet, 9 inches tall and wants to shed 55 pounds. "When I get older I will have lots of problems, maybe high blood pressure and a lot of other illnesses."

After struggling for millennia to feed its population, China, the world's fastest-growing major economy, now faces the opposite problem. Some 30 percent of adults are overweight or obese [and 10% of adults are diabetic—see #msg-48221983], compared with 25 percent in 2004, figures Barry Popkin, director of the Inter-Disciplinary Obesity Center at the University of North Carolina at Chapel Hill. In Beijing, 40 percent of Chinese boys struggle with their weight. Greater affluence, less physical activity, and a diet with more meat and processed food have expanded girths. The problems are most pronounced in cities like Shanghai and Beijing, where more people drive and have easier access to fast food.

The rising rates complicate China's plan to overhaul a health-care system that leaves more than 300 million people without insurance. The government is spending $125 billion to provide coverage for all 1.3 billion Chinese by 2020. The plan includes only basic benefits, not services such as outpatient care for chronic diseases linked to obesity, says Wang Shiyong, senior health specialist at the World Bank in Beijing.

More than 92 million Chinese adults suffer from Type 2 diabetes, caused mainly by a high-calorie diet and sedentary lifestyle, according to a study in the Mar. 25 New England Journal of Medicine. Based on this data, the International Diabetes Federation in Brussels estimates close to half a billion Chinese will have the disease by 2030. The government "is very concerned," says Chen Chunming, professor of nutrition at the International Life Sciences Institute in China, a state-affiliated public-health organization.

Calorie counters like Wang are creating demand for the low-fat foods and weight-loss programs that figure so prominently in the U.S. Sales of soy and fruit bars are growing "really fast, especially to office ladies who are so afraid of gaining weight," said Michael Zhang, chairman of Otsuka (China) Investment. Tokyo-based Otsuka makes the popular Soyjoy bar, which has been available in China since 2008, and Zhang says Soyjoy sales there will overtake those in the U.S. this year. Weight Watchers China, a joint venture between Weight Watchers International (WTW) of New York and Paris-based Danone, the world's largest yogurt maker, opened its first center in Shanghai in August 2008. It has since opened three more there, another in Nanjing, and plans to expand to other cities, according to Shan Jin, director of program development.

The desire to lose weight and achieve "a more healthy lifestyle" are also luring customers for Zhongti Beili Health Club, a joint venture of Bally Total Fitness of the U.S. and Beijing-based China Sports Industry Group, according to the venture's deputy general manager Derek Xue. The company plans to double its chain of gyms to 28 by yearend, he says.

China has about 3,000 health clubs, with about 3 million active members, estimates Marco Treggiari, China managing director of Italy's Technogym. The equipment maker supplies about 400 independent gyms and facilities in 210 five-star hotels. Sales will grow as much as 30 percent this year, to $18 million, he says.

Corporate clients are becoming an important source of that growth. Dow Chemical (DOW) has equipped a 2,600-square-meter sports facility in its Shanghai headquarters with Technogym treadmills and step and weight machines, says Fiona Bao, Dow's medical director for North Asia Pacific. "Obesity is no longer just a personal-health issue. It's related to productivity," she says.

Some Chinese are opting for a quicker fix. Zheng Chengzhu, chief of minimally invasive and bariatric surgery at Changhai Hospital in Shanghai, says he performs about 100 obesity-related operations a year, compared with 20 to 30 a few years ago. Allergan (AGN), maker of a device used in gastric-banding surgery, has applied to the government to sell its Lap-Band in China, says Judy Low, a company spokeswoman in Singapore.

One incentive for a smaller waistline, beyond better health, is the potential to make more money. Wu Yu'e, 23, an engineer who joined Weight Watchers, says employers in China place a premium on physical beauty especially for women. If she slims down, she says she will get a higher-paying job. "It will also help me find a boyfriend," she adds.‹