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The OTC Switch is ON in India
Presentation at OTC Action Workshop,19th Mar10 -India
Salute to India’s IQ….(Immunity Quotient)
When Rest of the World caught the Cold…
• Domestic demand driven economy • Younger demographic profile• Growth in spending among Middle Class and Rural Consumers• Savings led investments > stand at 38% GDP• Govt. stimulus on time
Indian Consumers most upbeatECONOCURIOUS STUDY 2009
• 9 countries• Consumer outlook• Comparison between developed and BRIC countries
• India –the strongest BRICK in the BRIC !• Most number of optimistic people (70% vs 46% of CHINA and 60 % of BRAZIL)• In next 6 months most likely to spend on :
• Vit /Health supplements (46%)• Home entertainment/
electronics (40%)• Cars/house (36%)• Savings (42%)
• Brand loyal > not swayed by Value deals• 54 % more positive than global average of 22%, that financial situation will improve
Do you want to live forever?
Survey featured in Reader’s Digest June 2009
In just 5 years the Consuming class has grown by almost 50%
The growing Consuming Class in India
•10 alpha cities, which include the four metros and Hyderabad, Bangalore, Ahmedabad, Pune, Surat and Coimbatore, the cities that are the first to adopt change.
• Alpha cities are also the most open to changing lifestyles and more westernized / cosmopolitan in character than other Indian cities
Changing Market Segmentation Models
However our IQ is also Challenged…
Epidemics /,Heart/Diabetes/Obesity,
Addictions, Stress, Rising healthcare costs
Our lifestyles are changing
Time is getting premium with no
scope for downtime
Hectic consumer lifestyles
favouring ‘on-the-go’
products
We are increasingly aware of health and
well-being
We have more money… …but we
demand low prices as well as premium offers
We’re also getting older…• 1950: 46.5 years• 2000: 65.0 years• 2050: 75.0 years
* average lifespanl
Its not relief but healthy lifestyle…
Key healthcare Concerns
17
22
22
15
19
26
27
22
32
6
6
6
6
7
10
10
11
17
0 5 10 15 20 25 30 35
Onset of age related health problems like...
Sleeplessness
Backache
Cardiac problems
Depression
Lack of energy/general tiredness
Stress/mental tension/anxiety
Weight control problem
Inadequate physical fitness
Rank 1-3 Rank 1
Source: The Knowledge company,Technopak
Tired
Stressed
Overweight
• Quick acting
• Hassle free
• Non-drowsy
• Back in action
Motivations to manage Lifestyle inhibitors are changing
“ Too much trouble to get a glass of water to down that Tylenol? 30% of households don’t medicate for headaches because it’s too inconvenient “Advertising Age
What consumers do to stay healthy
8
17
19
23
31
53
41
62
67
71
72
0 10 20 30 40 50 60 70 80
Going for preventive health check up
Taking vitamins.tonics & health supplements
Cutting dow n on smoking,liquor intake
Regular exercise in w alking,playing sports etc
Reducing stress
Getting regular sleep
Eating less of fried items /sw eets
Eating a w ell balamced nutritional diet
Eating more of home made food
Eating on time
Eating right quantities of food
Any food- related activity- 99%
Source: The Knowledge company,Technopak
Healthcare spending, which grew from 4% of average household spending in 1995 to 7% in 2005, is expected
to touch 13% by 2025.
Changing Healthcare Needs
There is indeed Wealth in Health
So who is taking advantage…
• Besides the growing Functional Food business ,a recent 2009 report by FICCI and Ernst & Young has estimated the wellness services market at US$ 2.4 Bn (Rs 11,000 crs).
• Rejuvenation services such as spas, alternative therapies and beauty treatments are expected to grow at 30% over the next five years, while fitness services would grow at over 25%.
• New age services like Calorie Care has entered the niche market with its health foods. Calorie Care delivers calorie-counted meals homes and offices of its clients, comprising mostly of busy professionals in the 28-50 age bracket.
So who is taking advantage…
What about the Indian OTC industry ?
OTC brands getting bigger than Rx brands in the company
EC pills: Aggressive marketing strategies4 Nov 2009, 0531 hrs IST, Nina Mehta ,In a country which is rather prudish about discussing matters related to sexuality, the surge in the emergency contraceptives (EC) market over the past year has been astounding . Switch on the idiot box and chances are an emergency contraceptive brand will be talking to you directly.
GlaxoSmithKline to tap modern retail :
GSKCH now plans to give its over-the-counter (OTC) brands a similar push.Two of GSKCH’s OTC products —Eno and Iodex — command a household penetration of 9 and 10 per cent respectively in metro cities. “As a result of this exercise, the antacid category has grown six times in Shoprite and the pain balm category has doubled. Today, GSKCH brands of Eno and Iodex contribute 86 per cent and 47 per cent to the antacid and pain balm category respectively in Shoprite,” Navneet Saluja, executive vice-president (sales), GSKCH, told Business Standard.
The OTC Buzz….
Aggressive launches….
• i-Pill• Unwanted 72• Norlevo• Prosoy• Nutricharge• Sunova Cough
syrup• Breathe right• Fimaleton• Itchmasol…..
Line extensions….
• Moov Shoulder Gel
• DCold Natural
• Revitalite
• Crocin cold & flu
• Dabur Chyawanprkash…
and Switches too….
• Volini• Chericof• Supractive• Pediasure• Digene• Combiflam
gel• Otrivin….
So what does the Report Card say ?
Data from the new robust DB6 2010 which also includes Nielsen Data
Mass
advertised
Deemed
OTX
Generics
Moov, Vicks,
Gelusil, Crocin
Becosules
Shelcal
Calpol
Voveran,
Combiflam
Brufen
Paracetamol,
Aspirin
True OTC products.
Allowed OTC and
promoted OTC
Allowed OTC but
promoted through
doctors
Schedule H drugs, with
high consumer pull.
Sold largely w/o
prescriptions
Products with a high
retailer push. Sold w/o
prescriptions
India OTC
market
The OTC Market definition in India
23%
17%
26%
45%
13%
66%
65%
57%
30%
80%
10%
12%
17%
11%
7%
0% 20% 40% 60% 80% 100%
Cough cold and fever
Gastrointestinals
Pain relievers
Skin care
Nutritionals
FMCG cos M.S Ethical Pharma M.S. Pharma OTC M.S.
Deemed OTC presence
Source: ORG IMS analysis & estimates
Comparison of FMCG vs Ethical vs OTC cos.
The Indian OTC market >> growth trend
Data - DB6 2010
1243.4
1371.41491.0
1638.9
1813.4
0.0
200.0
400.0
600.0
800.0
1000.0
1200.0
1400.0
1600.0
1800.0
2000.0
Sales in US mn $
at MSP*
Grth5.9%
Grth10.3% Grth
8.7%
Grth9.9%
Grth10.7%
CAGR9.9%
2005 2006 2007 2008 2009
* Manufacturers Selling Price
The OTC Category split..
Analgesics 14%Dermatologicals
13%
Gastrointestinals 18%
Vitamins, Minerals & Supplements
35%
Cough, Cold & Allergy
18%
Lifestyle OTCs 2%
Indian OTC MarketUS $1.8 Bn
(Rs.8430 Crs)CAGR : 9.9%
Data - DB6 2010
OTC Categories > 2009 Growth Drivers
Data - DB6 2010
VMS634,8.8 %
GI333,10.4%
CCA318,7.8%
Dermat237,11.3%
Anal259,15.8%
Lifestyle33,38.9%
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
0 100 200 300 400 500 600 700Sales in US$Mn
Gro
wth
09/
08 (%
)
OTC Grth: 10.7%
Lifestyle OTC's33, 22.32%
Dermat236, 13.18%
Analgesics259, 9.67%
GI333, 9.49%
CCA318, 8.77%
VMS634, 9.14%
Total OTC1813
9.89%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
0 200 400 600 800 1000 1200 1400 1600 1800 2000
Sales in US$mn
CA
GR
OTC Categories > CAGR Forecasts 2014
Data - DB6 2010
10.2%10.3%
9.7%
10.3%
9%
10.2%
10.2%
The Super Performers
10.4
10.7
10.9
12.1
12.3
12.7
12.8
13.9
14.7
15.0
15.5
16.0
19.0
22.6
0.0 5.0 10.0 15.0 20.0 25.0
Systemic analgesics
OTC sales - India
Topical decongestants
Traditional digestive remedies
Antacids & antiflatulents
Acne remedies
Antidiarrhoeals
Antiseptics & disinfectants
Scalp treatments
Minerals - iron
Laxatives
Chest rubs & inhalants
Topical analgesics
Herbal & natural supplements - ginseng
Growth Rate (%)
Data - DB6 2010
The Non-Performers
-25.0
-7.7
-3.0
1.2
3.2
3.4
4.2
5.0
5.6
5.8
6.0
6.2
7.0
10.7
-30.0 -25.0 -20.0 -15.0 -10.0 -5.0 0.0 5.0 10.0 15.0
Vit C
Anti-itch
Vit E
Antiparasitics
Sore throat remedies & medicated confectionery
Multivitamins
Sedatives & sleep aids
Herbal & natural supplements - others
Smoking control
Cough remedies
Systemic cold & flu
Liver & bile remedies
Chyawanprash
OTC sales - India
Growth Rate (%)
Data - DB6 2010
The Star Brands
10.1
10.2
10.7
11.3
11.3
11.5
11.6
11.6
14.6
15.0
16.5
17.8
18.2
20.7
24.8
37.6
0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0
Otrivin
Emami Mentho Plus
OTC sales - India
Saridon
Strepsils
Dabur Chyawanprash
Digene
D'Cold
Disprin
Gelusil
Moov
Himani Fast Relief
Iodex
Revital
Eno
Volini
Growth rate (%)
Data - DB6 2010
Interesting targets for OTC shifts
25.8
24.9
18.818.0
16.4
15.912.5
12.4
11.6
11.2
10.0
9.79.4
8.5
8.1
7.87.1
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
0.0 5.0 10.0 15.0 20.0 25.0 30.0
Sales US $ Mn
CA
GR
(%)
Cobadex
DexorangeZincovit
Lactacyd
Naturolax
Orofer
Shelcal
Cremaffin
Polybion
BetadineBecosules
CalpolElectral
Sinarest
Liv 52
Ostocalcium
A to Z
*
* CAGR Year 2005-09 Data - DB6 2010
at MSP (Manufacturers Selling Price)
Time
Sa
les
Illustration
• New introductions have taken away time from ‘Active detailing’ for many established brands
• As a result, product lifecycle of pharmaceutical brands have shortened today• Most commonly followed PLC extension strategy by companies is launch of
line extensions; OTC approach not completely explored by most companiesIntroduction Growth Maturity Decline
Saturation
Extension
Short term
Long term
‘Rx to OTC’ >untapped opportunity
In summary…The OTC switch is ON in India
• Need to tap into the consumer mood of spending for health and wellness
• The Indian OTC opportunity is probably understated than what it really is
• There would be many opportunities in our market to encash through focused strategies & implementation
• Its probably best time to analyse portfolios and manage effective Rx to OTC switch, invest in building brands through improved consumer awareness
• Innovation is the key & being plugged into the global trends would be important elements to move early & drive success
Lets go for it !
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