Global OTC market still subdued in Q2

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New figures from Nicholas Hall’s OTC sales database DB6 reveal that, in MAT Q2 2019 (the 12 months to end-June 2019), the global OTC market remained subdued, recording an increase of just 3.6% to total US$137.9bn in turnover. North America generated growth of 2.6%, with USA (+2.7%) improving slightly compared to MAT Q1; however, the market continues to be held back by a lack of switch activity. Canada performed poorly with sales up by just 2.1%.

In Europe (+2.1%), the OTC market also remained sluggish, with most key markets posting low single-digit growth, while Russia (-0.6%), France (-1.4%) and Switzerland recorded declines. Germany (+0.1%), Italy (+2.6%) and the UK (+1.1%) all managed modest increases. Poland was the one bright spot with a rise of 7.9%, driven by high levels of NPD and Rx-to-OTC switch activity. Looking at the Middle East & Africa, Turkey (+15.8%) remained the fastest-growing of the Top 20 markets, driven by high inflation.

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As for Asia-Pacific, growth decelerated to 4.2%, with slowdowns recorded in China (+5.3%), India (+7.5%) and Australia (+1.6%), while sales in Japan (+0.9%) remained flat. Both China and India were impeded by a comparatively low-key cough & cold season and weakening economies. Latin America (+8.3%) continued to be the best performing region, with the two largest OTC markets Brazil (+7.7%) and Mexico (+9.3%) showing resilience in the face of a challenging macroeconomic landscape.

Vitamins, minerals & supplements still generate the largest share (30%) of the global OTC market by major category, but growth slowed in Q2 to 3.7%. Key categories like probiotics and multivitamins reported slowdowns in Q2 2019, especially in the USA, which is struggling this year to replicate the strong performance of its dietary supplements market in 2018.

Nicholas Hall’s Future Opportunities & Growth Drivers in VMS – A Strategic Review of Vitamins, Minerals & Supplements is now available! This all-new report analyses a range of VMS categories including multivitamins, probiotics, OTC tonic drinks, mineral supplements plus many others, alongside looking at the latest trends, brand studies and launch activity. Click here to purchase your copy or to take a look at the full table of contents! To find out more about this key report, or to order your copy, please contact Melissa.Lee@NicholasHall.com

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eCommerce expansion led by Amazon limits store-based growth

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Continuing our series of blogs on the 10 Infinity Zones for future CHC growth outlined by Nicholas Hall, in this edition we take a closer look at eCommerce, following the news that Amazon has become the world’s most valuable brand, according to the 2019 BrandZ Top 100 Most Valuable Global Brands ranking released by WPP and Kantar.

Commenting on the latest DB6 MAT Q1 2019 figures, which show that global bricks & mortar OTC growth decelerated to 3.7%, Nicholas Hall said that “Amazon goes from strength to strength, and takes a 75-90% share of all eCommerce sales of CHC products, depending on whom you listen to. These are the glory days for the so-called GAFAA companies (Google, Apple, Facebook, Amazon, Alibaba), but will it last?

Top 10 country MAT Q1 2019

The rise of eCommerce is one of the factors causing the slowdown in store-based OTC sales, which now total US$136.7bn. According to Celine Waller, VP, DB6, store-based sales account for 78% of the global OTC market, with direct sales generating 14%. Internet & mail order currently accounts for 9% of the “all channel” universe, with sales dominated heavily by VMS supplements in China and USA.

However, this channel has seen a CAGR of 20% since 2014 and will continue to increase dramatically in importance over the next decade. In China, Alibaba continues to prosper from the Chinese government’s attempts to promote eCommerce and regulate the so-called suitcase trade (daigou), while Amazon remains supreme in the US market.

To help keep our clients abreast of these changes, this year we have introduced an “all channels” version of the DB6 dataset, which reports on topline sales of direct sales (MLM), Internet & mail order plus key brands in selected leading markets. eCommerce will also be one of the key topics in our upcoming report, Nicholas Hall’s New Paradigms for CHC 2019: Over the Horizon, written by Nicholas himself! Examine each aspect of the CHC industry in 20 chapters, with a focus on major issues including Regulation, Pharmacy Point-of-Care, M&A, Switch and much more. Nicholas will also unveil the “infinity zones” he has identified as being crucial to the future growth of the industry. In addition to this, you can upgrade your purchase to include a customised in-house presentation or webinar with Nicholas for an additional GB£10,000. To find out more or to place your order, please contact melissa.lee@NicholasHall.com.

Q3 2018: Global OTC growth steady at 4.3%

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According to the latest MAT Q3 2018 figures from DB6 – released at the end of last week – the global OTC market maintained 4.3% growth in the year to end-September 2018. As our graph below shows, the world’s two largest OTC markets, USA and China, still overshadow the rest of the Top 10 and growth for both markets in Q3 was faster than any of the other Top 5 countries.

US growth was up slightly to 2.6% (vs 2.5% MAT Q2 2018), where a slower performance in CCA was offset by improvements across all other major categories. Asia-Pacific grew by 4.9%, with mixed performances among the top markets. While growth remained steady in China and India, Japan sales continued to weaken (+0.3% vs +0.6% MAT Q2 2018) and Australia remained subdued (+0.9%).

Top 10 CHC markets MAT Q3 2018

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Half of the Top 10 markets are still located in Europe, though growth for the two biggest – Germany and Russia – was in the 1-2% range in Q3, while for the other three – France, Italy and the UK – it was in the 2-3% range. Overall, Europe’s OTC performance remained constant, increasing by 2.9%. Western Europe was up by 2.4%, with France continuing to advance but Germany hindered by weak CCA sales, while growth in Central & Eastern Europe was up 4.1%.

Middle East & Africa growth was stable at 6.6%, with double-digit growth in Turkey (+12.9%) still behind the strong upturn. Latin America (+12.8%) growth remains driven by high levels of inflation, with the largest market Brazil up by 10.8%. Commenting on the Q3 results, Nicholas Hall said: “This [Brazil] is the world’s 8th largest CHC market, and will probably overtake Italy in 2019. The economy is totally flat and inflation is running at almost 5%; in that sense CHC is holding up well in this very important market.

Nicholas Hall’s DB6 MAT Q3 2018 figures are now available! DB6 features over 24,000 records and covers 10,000+ brands and more than 2,500 companies, offering complete coverage across 64 countries. To find out more about this essential service, or for a free demonstration, please contact kayleigh.griffinhooper@NicholasHall.com

MAT Q1 2018: Global OTC growth steady at 4.1%

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According to Nicholas Hall’s global OTC database, DB6, the OTC market maintained 4.1% growth in the 12 months to end-March 2018. This steady but slower rate of global OTC growth compares to a faster pace during the first three quarters of 2017, when growth peaked at 4.6%.

The key factor in the persistent slowdown in Q1 2018 was lower OTC growth in the USA (+2.5% vs +2.8% for calendar 2017), with faster development held back by a weak allergy season. As highlighted in our OTC DASHBOARD market summary for North America, the impact of recent Rx-to-OTC switch activity in the US market has also been minimal.

Some positives emerged in the MAT Q1 2018 data. OTC growth in Western Europe improved to 1.8%, boosted by a high incidence of cough & cold in the first quarter of this year, while Latin America’s OTC market continued to increase strongly (+11.8%), with leading country Brazil up by 9.8%.

The OTC performance in Asia-Pacific (+4.7%) was mixed, with China (+6.3%) and India (+7.9%) improving upon their 2017 growth, however Japan and Australia remained flat in Q1 2018. Growth in the Middle East & Africa remained stable at 6.7%, while Central & Eastern Europe decelerated further to 5.5%, with weakening growth in both Russia (+3.5%) and Poland (+3.3%).

If you are not a subscriber and would like to find out more about what DB6 covers, please contact kayleigh.griffinhooper@NicholasHall.com for a free demo.

 

Q3 2017: Global OTC growth stays at 4.7%

According to the latest figures published by Nicholas Hall’s global OTC sales database DB6, the OTC market maintained 4.6% growth in MAT Q3 2017. Commenting on the results, DB6 VP Celine Waller said: “Russia remained the fastest-growing leading market, though its growth slowed slightly compared to MAT Q2 2017 (+17.3%). Brazil and Turkey (+13.1%) also both achieved double-digit growth. Growth in the US increased marginally, with an improved performance in cough & cold offset by continued weakness in gastrointestinals and dermatologicals. France and Australia (-0.7%) remained in decline – France owing to the poor performance of the large OTx sector and reverse switch of some cough ingredients, and Australia driven by a slowdown in demand from Chinese consumers buying VMS products for resale in China (daigou or ‘suitcase entrepreneurs’).”

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Though OTC growth remains high in many of the Emerging Markets, the established markets of North America, Japan (+0.6%) and western Europe – notably Germany (+1.8%), France (-1.2%), Italy (+2.0) and UK (+1.7%) – remain relatively flat. Innovative Rx-to-OTC switches, such as the UK MHRA’s recent approval of the POM-to-P reclassification of Viagra Connect, or the emergence of new OTC categories, such as e-cigarettes or medical cannabis, offer the most promising route back to growth for many of these established OTC markets.

Nicholas Hall said: “Q3 data confirms 4.6% as the baseline for CHC growth, and frankly it’s not good enough!! Only the sleepiest or most risk-averse companies will accept competing in a market where growth is only modestly ahead of inflation + higher population. That is why the first serious step by Pfizer to switch Viagra is so important. Since we made our first detailed review of the ED category for a Big Pharma client exactly 5 years ago, we have been convinced that Viagra is potentially the world’s largest consumer health brand. Some might say that it already is, although that would be true only for the use of the Viagra brand name on the internet as most of the blue pills sold in that channel are not from Pfizer. As a legitimate CHC category, and with recreational use included — which Big Pharma companies dislike as they see ED brands as treatments — the overall CHC reproductive health category, including ED brands, condoms, oral contraceptives, EHC and conception products and diagnostics, could easily reach sales of US$20bn at MSP in all channels of distribution.”

Q1 2017: Early analysis of the global OTC performance

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Nicholas Hall’s global OTC database, DB6, has just published its latest figures relating to the Q1 2017 performance of the OTC market, and below are some standout trends based on early analysis of the data. Over the coming weeks, our OTC INSIGHT research teams will be compiling the latest trend info at a regional and Top 20 country level, and we’ll alert you as soon as this analysis has been uploaded to the OTC DASHBOARD website.

1. Russia returns to higher growth (+18.2% MAT Q1 2017 vs +11.3% full-year 2016)

A key factor in the slightly improved performance of the global OTC market in the 12 months to end-March 2017 (+4.5%) vs full-year 2016 (+4.3%) was higher growth in Russia. While a modest upturn in the world’s No.1 OTC market, USA, was offset by decelerating growth for both No.2 market China and No.3 market Japan, it was the European countries – largely No.5 Russia, but also No.4 Germany – that accounted for the improved performance of the global OTC market in Q1 2017.

2. CCA growth at the heart of Europe’s revived fortunes in Q1 2017

Global CCA sales were up 4.7% in 2016, thanks to a strong end to the year, and this trend continued into the first quarter of 2017, with growth accelerating to 6.3% in the MAT Q1 2017 period. Europe was largely behind this upsurge, with CCA growth in Western Europe showing a marked improvement (+3.8%), while Central & Eastern Europe was the biggest source of dynamism (+17.8%), led by Russia and Poland. This trend extended to the rest of the northern hemisphere, with North America also reporting higher CCA growth (+4.4%) in the MAT Q1 2017 period, with Canada especially vibrant (+6.9%).

3. Global Top 5 stays the same, but J&J may overtake Sanofi by mid-year

While the Top 5 global OTC marketers – GSK, Bayer, Sanofi, J&J and Pfizer – remain fixed in position and adrift from the rest of the competition, the battle for the No.3 spot between Sanofi (+3.8%) and J&J (+4.1%) continues to intensify. On current trends, it looks as though J&J may overtake Sanofi by the end of Q2 2017, and we will confirm the outcome of this battle later in the year.

In the meantime, please check your weekly briefings and OTC DASHBOARD‘s Charts & Graphs archive for more early analysis of the Q1 2017 results over the coming weeks.

Q3 Results Reveal USA Slowdown

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The Q3 2016 results are now available on Nicholas Hall’s DB6 database, and the trend information will soon be updated on the OTC DASHBOARD website. In this week’s blog, we take a closer look at the latest growth trends for the Top 20 OTC markets in the world.

Overall, the global OTC market performed steadily in Q3 2016 with a 4.3% rise, the same growth rate as we saw in Q2 2016. However, this performance can be seen as mediocre compared to the full-year 2015 period, when OTC sales were up by 5.5%.

The global No.1 market, USA, showed signs of deceleration in Q3, with sales up by only 2.2%. This is largely owing to the slowing down of sales for major switches, such as Flonase allergy remedy and Pfizer’s Nexium 24HR antacid. That said, the USA should enjoy an upturn in the new year with switches such as GSK’s Flonase Sensimist (allergy remedy) and Galderma’s Differin Gel (acne remedy) in the pipeline. Compared to other categories, Lifestyle OTCs in the USA showed continued dynamism in Q3 2016, with sales up by a steady 5.0%; this was owing in part to double-digit growth for obesity treatments (+43.4%).

China’s growth also continued to lose steam in Q3 2016, where sales were up by 6.0%. China’s OTC market continues to grow year-on-year, but in recent years growth has gradually slowed; this is considered to be owing to a weaker economy, new regulations and also the crackdown on MNCs and domestic companies. Weaker growth overall in Q3 came despite continued growth for analgesics, which were up by 8.4%, making it the most dynamic OTC category in China, thanks to high levels of innovation and advertising in this area.

In Q3, growth also weakened in Japan and Europe as a result of low levels of Rx-to-OTC switch activity and weak cough, cold & allergy growth in early 2016. Italy was an exception to sluggish growth in Europe, where sales of OTCs were up by 3.5%; this was thanks to strong growth for Lifestyle OTCs (+11.1%), with a particularly dynamic performance from emergency hormonal contraceptives, sales of which rose by 226%.

Latin America remains the strongest performing region, with growth up by 15%. This is thanks to significant growth from Venezuela, up by 39% in Q3, owing to high levels of inflation. Despite a tough economic climate in Brazil, the OTC market remains robust with sales up by 9.5%, as a result of increased awareness of health and wellbeing.

Elsewhere in Q3 2016, India’s growth accelerated with sales up by 9.5%, owing to a strong performance from gastrointestinals (+10.3%). Turkey also performed well with growth up by 6.8%, thanks to VMS sales and a strong upturn for Lifestyle OTCs.