BY Health & Biotech | Nadine McGrath
• EZZ is reducing its reliance on Chinese e-commerce as it expands pharmacy distribution
• Bubs is building the US while keeping China central to its growth plans
• Vita Life is refining its China strategy as other Asian markets grow
Cracking the Chinese market has long been the growth ambition of Australian health and wellness companies.
Products made in Australia and registered with the Therapeutic Goods Administration (TGA) have been highly sought after by Chinese consumers and highly regarded for safety and trustworthiness.
Leading e-commerce platforms in the Middle Kingdom like Tmall, Douyin and Kuaishou turned that trust into fast, scalable sales in a market defined by a rising middle class and growing discretionary income.
For companies like EZZ Life Science (ASX:EZZ) China has been core to its business model.
Its health and wellness products ticked the right boxes to appeal to Chinese consumers, including being manufactured under Good Manufacturing Practice (GMP) standards in Australia and New Zealand and TGA-registered where appropriate.
However, softer global economic conditions, weaker consumer sentiment, reduced discretionary spending and increased competition across key consumer health and e-commerce channels in China have prompted EZZ to undertake an “operational reset”.
EZZ recorded a 36.39% decline in sales for FY26, with the largest impact arising from lower activity across Chinese e-commerce platforms Douyin, Kuaishou and Tmall.
“These platforms remain important to EZZ, but FY26 highlighted the need for a more balanced revenue mix and deeper engagement across alternative channels,” EZZ said in its 2026 annual report.
EZZ looks closer to home
EZZ admits “FY26 tested the resilience” of its business model and required the company to “act decisively in response to a materially different consumer environment”.
“In response, the group shifted greater attention toward retail pharmacy expansion, strategic distribution partnerships and targeted export development.”
In Australia and New Zealand, which EZZ considers one market, the company accelerated its pharmacy channel strategy.
During FY26 EZZ expanded into about 100 physical pharmacy locations in the two countries, including Direct Chemist Outlet, Priceline and other pharmacy partners.
“This represented a meaningful step in moving EZZ closer to everyday consumers and building a stronger presence in trusted health retail settings,” the company said.
EZZ said it was building a more balanced omnichannel model, allowing consumers to access its products through trusted pharmacy environments as well as online channels, while reducing reliance on any single market or sales channel.
The company’s operational reset and diversification across sales channels and geographies appears to be working. China’s share of EZZ’s total sales fell from 69% in FY25 to 65% in FY26.
China still an important market
EZZ hasn’t pulled back entirely from China, which remains an important market, but is instead reshaping its approach, progressing several partnership initiatives to support future distribution and growth.
The company in February inked a four-year exclusive global distribution deal with Xenitra (ASX:XEN), with minimum purchase commitments of $10 million.
EZZ has also established a strategic cooperation framework with JD Health, which operates one of China’s largest online healthcare ecosystems, spanning pharmaceuticals, supplements, medical services and digital health solutions.
The company will distribute and promote its health supplement range via JD Health’s platform, tapping into its large user base, integrated supply chain and digital healthcare ecosystem.
EZZ said it was also exploring new growth avenues, staying close to distributors and retail buyers while gaining insights into consumer preferences and channel opportunities.
“During FY26, management focused on strengthening a more diversified channel platform, reducing reliance on any single online channel and supporting future growth through pharmacy, wholesale and international distribution partnerships,” EZZ said.
China key market for Bubs after formula crisis
Bubs Australia (ASX:BUB) has also had a strong China focus and continues to do so but is expanding its market elsewhere, including the US.
Consumer trust has largely shaped the infant formula market globally since China’s melamine contamination crisis in 2008.
Locally produced formula was found to be adulterated with the chemical melamine, giving it the appearance of higher protein content to pass quality control testing but causing deaths and illness among babies.
The crisis accelerated demand for imported formula, particularly from Australia and New Zealand, where regulatory standards were perceived to be stricter and more transparent.
Bubs built its brand in China around Australian-made whole-fat goat and bovine infant formula, leveraging the country’s reputation for clean, high-quality dairy and stringent food safety standards.
China remains ‘strategically important’
Bubs CEO Joe Coote told Stockhead that China remained a “strategically important” market for Bubs.
“We’ve continued to invest behind the business despite a more complex operating environment,” he said.
“During FY26 we expanded our distribution footprint, increased sell-through across key channels and strengthened our portfolio across infant, kids and adult nutrition categories.
“We’re encouraged by the underlying consumer demand for trusted Australian-made products, with Bubs’ clean label approach and premium nutrition credentials continuing to resonate with families.”
Coote said he expected China growth to be supported by further distribution and marketing investments in FY27.
Bubs answers US call after formula crisis
In February 2022, the US had its own infant formula crisis. A major recall at an Abbott Laboratories plant in Michigan amid an investigation into Cronobacter infections in infants triggered the country’s worst formula shortage in decades, with out-of-stock rates reaching around 70%.
Bubs was among a handful of foreign suppliers that answered the Biden administration’s urgent call to restock infant formula in the US.
“The US has become an increasingly important growth market for Bubs, but our strategy is not about replacing one market with another,” Coote said.
“It’s about building a diversified global infant nutrition business.”
Bubs is waiting for permanent US market authorisation for its infant formula products through the US Food and Drug Administration (FDA) New Infant Formula Submission (NIFS) process.
This decision would replace the temporary enforcement discretion by the FDA that has allowed Bubs to sell formula in the US since the 2022 shortage.
“As we progress toward FDA authorisation, we continue to deepen our engagement across the US ecosystem and remain focused on supporting American families with trusted, premium infant nutrition products,” Coote said.
“We were pleased to see that progress recognised through our participation in a roundtable convened by US Health Secretary Robert F. Kennedy Jr, alongside leaders from some of the world’s largest infant formula manufacturers, reflecting Bubs’ growing presence and relevance in the US infant nutrition market.”
Vita Life Sciences revises China market strategy
Vita Life Sciences (ASX:VLS) is also undertaking a revised market strategy in China for implementation in Q3 CY26 as it seeks stronger market positioning.
Vita Life operates established consumer health brands including Herbs of Gold, VitaHealth and VitaScience selling a range of vitamins, supplements and wellness products across Australia and Asia.
The company posted record first-half result for the six months to June 30, 2026, with revenue up 6.1% on pcp to $48.3 million and net profit after tax increasing 14.9% to $5.5m.
Vita Life also reported Australia revenue up 14%, Malaysia and Singapore increasing about 7%, and Vietnam advancing 59%.
While the company did not mention China-specific figures, it noted a “revised market strategy in China for implementation in quarter three of 2026 with appointment of new exclusive distributor for e-commerce channels”.
At the AGM in May managing director Andrew O’Keefe said it had appointed an exclusive distributor for Herbs of Gold in China operating across all the major e- commerce channels.
“This is a significant step forward in a market that remains strategically important for us, and we are confident that our refined approach will position us for long-term success,” he said.
“The China market continues to experience an evolving regulatory environment and changing channel dynamics.
“The group will maintain a measured and disciplined approach to managing these developments moving forward.”