The report, entitled Strategic Analysis of Nutraceuticals Market in China, values the market at US$12.5bn in 2005.
It suggests that nutraceuticals are becoming more acceptable as a result of regulations over health food registration that were finalised last year - part of a government public health drive that also includes new measures for examining and administering health foods advertisements.
Consumers in China are also said to be following the global trend towards healthier lifestyles, and according to program manager Kathie Browlie nutraceuticals have been seen as a means to "alleviate some of the problems caused by an unbalanced diet".
Economic growth in China is also contributing to the market, as a higher proportion of the population has the income to afford specialty products or supplements, along side their usual diet.
That said, there do seem to be several barriers to acceptance, such as negative media coverage about the industry and consumer scepticism that products actually work.
To combat this, Brownlie said that some companies have invested in advertising campaigns, and some have adopted innovative marketing strategies and product branding initiatives.
"Enhanced promotions at end-user level together with better understanding of consumer preferences and efforts to educate consumers on varied product benefits will help support business growth," she said.Several Western companies in the sector have entered into joint ventures with Chinese companies, in a bid to gain presence in the market and help overcome price pressure on ingredients they had previously manufactured elsewhere.
For example, DSM has invested $160m in its yet-to-be-fully-approved joint venture with NCPC, and is on the lookout for more local collaborations.
Meanwhile Danish cultures maker Chr Hansen has also formed a strategic alliance with the China's leading liquid milk producer Mengniu Dairy to promote probiotics and healthy bacteria in the market.