Abstract
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive
environment
Product coverage
Adult mouth care; Allergy care; Analgesics; Calming and sleeping products;
Child-specific OTC healthcare; Cough; cold and allergy (hay fever) remedies;
Digestive remedies; Ear care; Emergency contraception; Eye care; Medicated
skin care; NRT Smoking cessation aids; OTC obesity; OTC statins; OTC triptans;
Vitamins and dietary supplements; Wound treatments
Executive summary
Declining consumer purchasing power blamed for decelerating growth
OTC healthcare in Indonesia maintained its respectable performance in 2008,
albeit that it saw slightly slower growth than in 2007. In fact, current value
growth slowed in all product categories, and industry sources blame the
decelerating performance in 2008 on the declining purchasing power of
consumers due to fuel price rises, followed by price increases on necessities.
Since in terms of their own daily needs price remained the main concern, the
majority of Indonesian consumers with low disposable incomes became even more
price-conscious when buying OTC healthcare products, especially those seen as
less necessary, such as vitamins and dietary supplements, medicated skin care
and calming and sleeping products. Meanwhile, a number of consumers traded
down to cheaper brands, including generics, and herbal or Jamu products for
products such as analgesics, cough, cold and allergy (hay fever) remedies and
digestive remedies.
2008 witnesses intensified competition from non-OTC products
2008 witnessed increasingly aggressive promotional activities for various
non-OTC products, including cosmetics and toiletries, packaged food and
non-alcoholic drinks; thus threatening the performance of a number of OTC
healthcare categories. Medicated skin care saw competition from cosmetics and
toiletries, with medicated shampoos competing with anti-dandruff shampoos such
as Clear, and feminine wash competing with non-OTC feminine wash brands such
as Lactacyd. Laxatives also saw strong competition from packaged food
products, including yoghurt claiming to treat constipation. Meanwhile, vitamin
C, calcium supplements and ginseng supplements experienced the effects of
campaigns from non-OTC products; elixirs such as You C 1000, calcium-fortified
powder milk such as Anlene and ginseng-fortified coffee such as CNI Ginseng
Coffee respectively.
Fragmented landscape, but domestic companies continue to lead the way
In 2008, OTC healthcare in Indonesia remained fragmented, with numerous
domestic and multinational brand names present. However, domestic companies
led in value share terms up to 2008. For instance, prominent local players
such as Kalbe Farma Tbk PT and Tempo Scan Pacific Tbk PT have a strong
presence in the three biggest contributors to value sales of OTC healthcare
products: analgesics, cough, cold and allergy (hay fever) remedies and
vitamins and dietary supplements. They employed various strategies to
strengthen their dominance, such as heavy investment in new product launches,
aggressive promotions through above-the-line as well as below-the-line
activities and more extensive distribution networks.
Grocery retailers and chemists/pharmacies erode the share of parapharmacies/drugstores
In 2008, parapharmacies/drugstores remained the leading channel through which
OTC healthcare products were sold in Indonesia. Towards 2008, however, the
importance of the channel was gradually threatened by grocery retailers and
chemists/pharmacies, which both witnessed growing shares. The rising share of
grocery retailers was thanks to the rapid expansion of modern retail outlets
throughout the country, especially hypermarkets and convenience stores. As
companies attempted to widen the distribution coverage for their OTC
healthcare products, more traditional grocery outlets carried a wider range of
products towards the end of the review period. In addition, there was also an
increase in chemists/pharmacies, both chained and independent outlets, which
provided consumers with better access to a wider range of products at
affordable prices and in convenient locations.
Respectable growth predicted for OTC healthcare in the forecast period
OTC healthcare is still expected to perform respectably in the forecast
period. One of the reasons for continued demand for OTC products is their
relatively cheap price compared with ethical medicines, and also their
acceptable efficacy. In addition, the potential for growth in the OTC
healthcare market is still good, because the geographical penetration of many
OTC products was not yet optimal in the review period, given the vast size of
the country. As such, OTC healthcare is forecast to maintain its strong
performance in the forecast period.
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