After growth of just 4.1% in MAT Q4 2017 and MAT Q1 2018, there were signs of slight improvement for global OTC sales in the MAT Q2 2018 period, with turnover rising 4.2% to US$139.4bn, according to figures just released by Nicholas Hall’s global OTC sales database DB6.
The gap between the world’s two largest OTC markets, USA and China, continues to close. Growth in the USA – the world’s No.1 market – remained steady at 2.5%, held back by a late-starting allergy season, while growth in China accelerated to 6.6%, vs 6.3% in the MAT Q1 2018 period, powered by an upsurge in CCA growth.
As Nicholas Hall commented: “At current rates of growth, China will overtake the USA in absolute values by 2025 and has already done so in Parity Purchasing Power. But that is at current growth rates. Despite the high incidence of e-Commerce sales in China, which will dwarf the USA, we expect the retail sector to grow by double digits, reflecting a speeding up of registration times and more switches being approved, so that China may become the new number one in even fewer than 7 years. And for that I do not believe our industry is fully prepared.”
Overall, Asia-Pacific posted 4.9% growth in the MAT June 2018 period, with China and India both steadily improving over the previous period. Meanwhile, Japan and Australia produced the poorest performances of the leading markets with growth of less than 1% each. LatAm (+12.1%) continued to exhibit high inflation-driven growth, with leading market Brazil up by double digits.
Growth in the Middle East & Africa was relatively stable at 6.6%, underpinned by the continued strong growth of Turkey (+13.3%), while the performance in Europe was consistent, with improvements in Western Europe (+2.5%) offsetting a slowdown in Central & Eastern markets. In particular, France returned to growth (+2.5%), while Russia and Poland continued to decelerate.
Nicholas Hall Writes: “We wouldn’t presume to tell our clients how to manage their brands, they are experts; but what we believe is lacking is an appreciation of the adjacent categories and alternative distribution channels, which is where the real growth will come from in future. The US population is growing at 0.7% a year and inflation is 1.9%, so the current 2.5% value growth in the US retail CHC market is very disappointing, but not surprising as we’ve seen relatively little switch activity in the past two years. Flonase Sensimist is the most successful recent switch, but Galderma’s Differin produced only $21mn of sales in the 12 months to June 2018. Maybe that is one of the reasons why Nestle has decided to exit the skin health business.”
Join Nicholas Hall and The CHC Training Academy in Israel at a key two-day workshop in Tel Aviv on 4-5 March 2019! The first day will focus on Trends in the Industry, showing you how to shape new Business Strategies to reflect the weakening economy. The second day will follow the theme of Winning in Consumer Healthcare, helping you to develop sales opportunities and solutions in a consistent approach, to add the best competitive advantage for your brand! Book your place now to take advantage of our generous early bird discounts! To find out more, please contact elizabeth.bernos@NicholasHall.com.