The COVID-19 pandemic made us feel our own vulnerabilities. People began to pay more attention to their health and alimentation. In China, the demand for vitamins and health supplements has surged since the pandemic began.
However, many Chinese consumers are still hesitant to trust local products due to concerns over quality and safety, and many have turned to cross-border e-commerce platforms for vitamins and health supplements.
Capitalizing on the trend, Derek Weng founded LemonBox in 2016, a cross-border e-commerce platform that not only provides vitamins and supplements but also helps its users to find the right products, thanks to big data and advice from its team of dieticians.
Applying the D2C e-commerce model to vitamins and supplements
Weng spent eight years in the US before returning to his native China in 2018. He graduated with an MBA from the University of Chicago before working for Walmart in Silicon Valley, where he led the cross-border operations department. He noticed the success of certain direct-to-consumer (D2C) e-commerce brands that look to penetrate a specific market vertical with greater control over sales and marketing, compared to sprawling e-commerce marketplaces like Amazon.
“I was fascinated by the success of D2C brands like Warby Parker, and Blue Apron, which used e-commerce to capture specific product verticals. I started to think, ‘how can I bring this D2C concept to my homeland?'” Weng said.
In 2016, Weng decided to change his career and launched LemonBox in Beijing. The startup later graduated from Beijing-based startup incubator Y Combinator’s 2018 cohort and secured USD 2 million in seed funding.
“When I was working in the US, friends and family kept asking me to bring vitamin and health supplement products back to China. But it was really difficult because I didn’t know anything about choosing the right products,” he added.
To help users to find the right products, he hired a team of US registered nutritionists and dieticians to produce tailored plans for various supplements. Customers could access these services online, he explained.
“My parents were having some health issues, and so we registered to see a dietician, who recommended them the right products to improve their health. I found that experience really great and so I thought from an entrepreneurial mindset, ‘can I scale this user experience for more people?'” Weng explained.
Riding China’s health wave
“Chinese people are very, very health cautious. They are always talking about what is good for your health and for your body,” Weng said. “But sometimes, they just don’t know which products will benefit them,” he told KrASIA. LemonBox mainly targets millennials (born between 1981 and 1996) and Gen Z (loosely, people born from 1995 to 2010) in China’s first-tier cities.
The company introduced a mini app on Wechat, where users can order supplements but also get free access to nutritional consultations. Users need to answer a series of diagnostic quizzes developed by the company’s health team about their lifestyle and diet. Based on that, the platform will automatically recommend a package of vitamins and supplements tailored for their individual needs, Wang explained. For now, the service relies on the info inputted by users, lacking the ability to take physical samples for testing.
“Our mission is to use data to empower nutrition science and deliver that service to China. The whole purpose is how can we make the algorithm as close as to the real-life person consultation.”
LemonBox’s service has helped users to gain trust in a market where vitamins and health supplements’ reputation is partially tarnished by food safety concerns and scam-wary skeptics. The company mainly sells products sourced in the US and Japan.
“In the past, people would go to experts for advice, and then they will have to buy whichever product is recommended at a very high cost. This so-called free consultation is not actually free,” Weng explained.
“We are all about transparency,” Weng said. “We tell people where the products are actually coming from. Given my background in Walmart’s supply chain, I go visit all the manufacturers to find out what the best products are.”
China’s vitamin market is currently dominated by large multinationals like Amway, but LemonBox’s D2C approach targets a more personalized experience for consumers. The company doesn’t aim to maximize product sales, but rather provide a holistic experience that will make users feel comfortable pursuing their health goals, Weng insisted.
Chinese consumers’ demand for healthier lifestyles has been increasing since the COVID-19 pandemic. About 75% of respondents in a recent McKinsey report said they plan to prioritize a healthier diet after the health crisis.
For LemonBox’s main target users, young urban Chinese, a healthier lifestyle is becoming even more vital to combat the adverse health impact of the intense pressure and the ‘996’ working schedule, common in China’s economy, Weng explained.
The company has scaled its services to reach over 1 million users in China. In December 2020, LemonBox pulled in USD 2.5 million in a pre-A round led by Panda Capital and Y Combinator.
In the short term, the company plans on expanding its presence and growing its user base in China to further empower its data insights. Wang also mentioned plans to expand the firm’s fledgling presence across the region in Southeast Asian markets and South Korea.
“For now, we are also available on Tmall, Taobao, Douyin, TikTok, and Instagram. We want to be wherever our users are,” Weng said.