Healthy Life Journal

Euromonitor International’s OTC Healthcare in Indonesia market report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data, allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market – be they new product developments, packaging innovations, economic/lifestyle influences, distribution or pricing issues. Forecasts illustrate how the market is set to change.

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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.