ch14 my herbal traditional

HERBAL/TRADITIONAL PRODUCTS IN MALAYSIA

Euromonitor International

April 2014

H E R B A L / T R A D I T I O N A L P R O D U C T S I N M A L A Y S I A P a s s p o r t I

E u r o m o n i t o r I n t e r n a t i o n a l

LIST OF CONTENTS AND TABLES

Herbal/traditional Products in Malaysia - Category analysis ......................................................... 1 Headlines ..................................................................................................................................... 1 Trends .......................................................................................................................................... 1 Competitive Landscape ................................................................................................................ 2 Prospects ..................................................................................................................................... 2 Category Data .............................................................................................................................. 3

Table 1 Sales of Herbal/Traditional Products by Category: Value 2008-2013 .......... 3 Table 2 Sales of Herbal/Traditional Products by Category: % Value Growth

2008-2013 .................................................................................................... 3 Table 3 NBO Company Shares of Herbal/Traditional Products: % Value 2009-

2013 ............................................................................................................. 4 Table 4 LBN Brand Shares of Herbal/Traditional Products: % Value 2010-

2013 ............................................................................................................. 5 Table 5 Forecast Sales of Herbal/Traditional Products by Category: Value

2013-2018 .................................................................................................... 6 Table 6 Forecast Sales of Herbal/Traditional Products by Category: % Value

Growth 2013-2018 ....................................................................................... 7

Herbal/traditional Products in Malaysia - Company Profiles ......................................................... 8 Cerebos Sdn Bhd in Consumer Health (malaysia) ....................................................................... 8

Strategic Direction .................................................................................................................... 8 Company Background .............................................................................................................. 8 Production ................................................................................................................................ 8

Summary 1 Cerebos Sdn Bhd: Production Statistics 2013 .............................................. 8

Competitive Positioning ............................................................................................................ 9

Summary 2 Cerebos Sdn Bhd: Competitive Position 2013 ............................................. 9

Cosway (m) Sdn Bhd in Consumer Health (malaysia) ................................................................. 9

Strategic Direction .................................................................................................................... 9 Company Background ............................................................................................................ 10 Production .............................................................................................................................. 10 Competitive Positioning .......................................................................................................... 10

Summary 3 Cosway (M) Sdn Bhd: Competitive Position 2013 ...................................... 10

Elken Sdn Bhd in Consumer Health (malaysia) .......................................................................... 11

Strategic Direction .................................................................................................................. 11 Company Background ............................................................................................................ 11 Production .............................................................................................................................. 11 Competitive Positioning .......................................................................................................... 11

Summary 4 Elken Sdn Bhd: Competitive Position 2013 ................................................ 12

Consumer Health in Malaysia - Industry Overview ..................................................................... 13 Executive Summary ................................................................................................................... 13

Slight Growth Recorded in 2013 ............................................................................................. 13 Worsening Pollution Brings Higher Growth for Eye Care ........................................................ 13 International Players Dominate Consumer Health .................................................................. 13 Direct Selling Remains the Most Important Distribution Channel ........................................... 13 Slowing But Positive Growth for Consumer Health Is Expected Over the Forecast Period .... 13

H E R B A L / T R A D I T I O N A L P R O D U C T S I N M A L A Y S I A P a s s p o r t I I


Key Trends and Developments .................................................................................................. 14

Busier, More Stressful Lifestyle and Urbanisation Help To Maintain Growth of Consumer

Health ..................................................................................................................................... 14 Stronger Demand From Female Consumers Drives Growth for Beauty-related Products ...... 14 High Percentage of Overweight and Obese Population .......................................................... 15 International and Direct Selling Players Dominates Consumer Health ................................... 16

Market Indicators ........................................................................................................................ 16

Table 7 Consumer Expenditure on Health Goods and Medical Services: Value 2008-2013 .................................................................................................. 16

Table 8 Life Expectancy at Birth 2008-2013 ........................................................... 17

Market Data ................................................................................................................................ 17

Table 9 Sales of Consumer Health by Category: Value 2008-2013 ........................ 17 Table 10 Sales of Consumer Health by Category: % Value Growth 2008-2013 ....... 17 Table 11 NBO Company Shares of Consumer Health: % Value 2009-2013 ............. 18 Table 12 LBN Brand Shares of Consumer Health: % Value 2010-2013 ................... 19 Table 13 Distribution of Consumer Health by Format: % Value 2008-2013 .............. 20 Table 14 Distribution of Consumer Health by Format and Category: % Value

2013 ........................................................................................................... 21 Table 15 Forecast Sales of Consumer Health by Category: Value 2013-2018 ......... 22 Table 16 Forecast Sales of Consumer Health by Category: % Value Growth

2013-2018 .................................................................................................. 22

Appendix .................................................................................................................................... 23

OTC Registration and Classification ....................................................................................... 23 Vitamins and Dietary Supplements Registration and Classification ........................................ 24 Self-medication/self-care and Preventative Medicine ............................................................. 25 Switches ................................................................................................................................. 25

Sources ...................................................................................................................................... 25

Summary 5 Research Sources ...................................................................................... 25

H E R B A L / T R A D I T I O N A L P R O D U C T S I N M A L A Y S I A P a s s p o r t 1


HERBAL/TRADITIONAL PRODUCTS IN MALAYSIA - CATEGORY ANALYSIS

HEADLINES

Herbal/traditional products grows by 6% to reach over RM1 billion in 2013

Herbal/traditional products continue to gain favour from consumers for their natural image

Herbal/traditional tonics and bottled nutritive drinks is the fastest-growing category at 13%

value growth

Cerebos Sdn Bhd continues to lead the category with over 14% value share

Herbal/traditional products is expected to grow with constant value CAGR of 3% over the

forecast period

TRENDS

Herbal/traditional consumer health products continued to be favoured by many consumers

thanks to the perception that they have fewer harmful side effects on the body compared to

non-herbal/traditional products. There were a rising number of consumers who turned to

alternative methods and natural remedies for minor illnesses.

2013s value growth was faster than the review periods CAGR, also due to the shifting trends

towards more natural remedies and growing favour for herbal/traditional products. As

consumers became more educated, more people were drawn towards herbal/traditional

products, even though they sometimes take a longer time to show effectiveness than

standard products.

Herbal/traditional tonics and bottled nutritive drinks was the fastest-growing category as it was

the only product with double-digit value growth amongst all herbal/traditional products. This

was attributed to the strong performance of tonics and bottled nutritive drinks as a whole.

Brands by Cerebos Sdn Bhd was the most popular brand, which also drove performance of

herbal/traditional tonics and bottled nutritive drinks thanks to the companys continuous

research and development efforts to launch new products and drive consumer demand.

Herbal/traditional medicines were increasingly packaged in nicely designed packaging in

order to convey an updated and modern look. There were still many herbal/traditional

medicine practitioners selling products in loose form, but it was increasingly easier to find

herbal/traditional medicines in readily packaged form, with detailed information on indications

and intake for consumer reference. This could be seen as the manufacturers efforts in

attracting the younger consumers who are busier and prefer convenience when buying

products.

Traditional Chinese Medicine (TCM) is popular, especially amongst the ethnic Chinese

community. The Chinese are the second largest ethnic group in Malaysia, after Malays. The

concept of TCM is familiar to many people, especially the middle-aged and elderly population

who tend to prefer TCM rather than modern medicine. Eu Yan Sang, a company that was

established in Malaysia but is now headquartered in Singapore, is one of the most popular

TCM producers, which has established a popular brand name with a chain of retail shops

throughout the country which focus on TCM products.



Paediatric products did not have a major presence in herbal/traditional products. Like almost

all kinds of medicines, parents are usually less confident in self-medication for their children

compared to for themselves. Thus, parents usually take their children to the clinics instead of

purchasing herbal/traditional medicine.

COMPETITIVE LANDSCAPE

Cerebos Sdn Bhd further gained share and maintained its leading position in herbal/traditional

products in 2013. Brands was one of the most popular brands in vitamins and dietary

supplements, having built its reputation over a long history. The companys position was

further strengthened in 2013 by its continuous efforts in researching and developing new

products to capture consumer trends. At the end of 2012, the company launched Brands

Innershine RubyCollagen Essence, which is a collagen drink fortified with micro-collagen for

better absorption by the body, and astaxanthin (micro-algae extract), advertised as natures

most powerful antioxidant. The new product saw a good reception in the market.

International companies dominated shares of herbal/traditional products in 2013. Amongst the

top 10 players, there were only two local ones, namely Elken Sdn Bhd and Cosway (M) Sdn

Bhd. International players had the advantage of a long history of presence and brand-building

activities in the country, making them more well known and trusted by many consumers.

Besides, as herbal/traditional vitamins and dietary supplements was the biggest category in

terms of value sales, international direct selling players like Nu Skin, Forever Living Products

and Amway gained a competitive advantage as they also dominated the category of vitamins

and dietary supplements.

Most marketing campaigns of herbal/traditional products focused on their natural ingredients

and brand image. For example, one of the main ingredients of the new product Brands

Innershine RubyCollagen Essence is astaxanthin, a micro-algae extract, advertised to be

natures most powerful antioxidant. Eu Yan Sang, a company focusing on Traditional Chinese

Medicine, also has always leveraged on its herbal medicine heritage in its advertising and

marketing campaigns.

The presence of private label in herbal/traditional products remained negligible in 2013.

Consumers were more drawn towards branded products for their trusted image and high

quality. Herbal/traditional products also seldom had direct competition with standard OTC

medicines, as they catered to different consumers. Consumers usually sought

herbal/traditional medicines as they wanted a more natural alternative to the regular products.

PROSPECTS

Herbal/traditional products will continue to grow with a constant value CAGR of 3% over the

forecast period. Market performance will be maintained thanks to continuously rising demand

for more natural medicinal alternatives to standard medicines and dietary supplements. As

consumers become more and more educated, they are more aware of various long-term side

effects that standard medicines have on their body. As such, more people will be actively

seeking herbal/traditional products, starting with minor illnesses like flu, coughs and colds.

One potential threat to growth is the increasingly busier and more stressful lifestyle that many

urban Malaysian consumers are leading. Due to this lifestyle, many people prefer a quick and

effective way to treat their illnesses so that they can go back to their normal lives and work.

Herbal/traditional medicines are perceived to be less effective, or to take a longer time than



standard medicine to show effectiveness. Thus, many consumers still choose standard

medicines when they need to recover fast.

Companies will continue to focus on building their brand image, together with marketing

efforts to communicate the effectiveness and natural image of their products to the

consumers. As demand for herbal/traditional products increases, competition will also rise and

companies have to spend more on marketing, research and development in order to stand

out.

CATEGORY DATA

Table 1 Sales of Herbal/Traditional Products by Category: Value 2008-2013

RM million 2008 2009 2010 2011 2012 2013 Herbal/Traditional 54.5 57.2 60.7 64.5 68.5 72.7 Topical Analgesics Herbal/Traditional - - - - - - Calming and Sleeping Products Herbal/Traditional 185.7 193.1 199.9 208.5 217.8 228.1 Cough, Cold and Allergy (Hay Fever) Remedies Herbal/Traditional 10.8 11.0 11.1 11.3 11.4 11.6 Digestive Remedies Herbal/Traditional - - - - - - Dermatologicals Herbal/Traditional - - - - - - Medicinal Teas Herbal/Traditional - - - - - - Smoking Cessation Aids Herbal/Traditional - - - - - - Paediatric Dietary Supplements Herbal/Traditional 421.1 441.0 460.1 477.5 494.5 515.1 Dietary Supplements Herbal/Traditional 122.0 141.5 158.5 173.4 189.0 213.6 Tonics and Bottled Nutritive Drinks Herbal/Traditional 794.1 843.8 890.3 935.2 981.3 1,041.0 Products

Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 2 Sales of Herbal/Traditional Products by Category: % Value Growth 2008-2013

% current value growth 2012/13 2008-13 CAGR 2008/13 Total Herbal/Traditional Topical Analgesics 6.0 5.9 33.3 Herbal/Traditional Calming and - - - Sleeping Products Herbal/Traditional Cough, Cold and 4.7 4.2 22.8 Allergy (Hay Fever) Remedies Herbal/Traditional Digestive Remedies 1.4 1.4 7.2



Herbal/Traditional Dermatologicals - - - Herbal/Traditional Medicinal Teas - - - Herbal/Traditional Smoking Cessation - - - Aids Herbal/Traditional Paediatric Dietary - - - Supplements Herbal/Traditional Dietary Supplements 4.2 4.1 22.3 Herbal/Traditional Tonics and Bottled 13.0 11.9 75.1 Nutritive Drinks Herbal/Traditional Products 6.1 5.6 31.1


Table 3 NBO Company Shares of Herbal/Traditional Products: % Value 2009-2013

% retail value rsp Company 2009 2010 2011 2012 2013 Cerebos Sdn Bhd 10.9 11.8 12.2 12.9 14.1 Elken Sdn Bhd 8.2 8.0 7.8 7.6 7.5 Lofthouse of Fleetwood 4.3 4.2 4.1 4.0 3.9 Ltd Ricola Asia Pacific Pte 3.7 3.7 3.6 3.6 3.5 Ltd Nu Skin (M) Sdn Bhd 3.1 3.3 3.3 3.3 3.3 Forever Living Products 3.5 3.4 3.3 3.2 3.2 (M) Sdn Bhd Cosway (M) Sdn Bhd 3.5 3.5 3.3 3.2 3.1 Amway (M) Sdn Bhd 2.6 2.6 2.7 2.8 2.8 Kraft Foods (M) Sdn Bhd - 3.1 3.0 2.9 2.8 Haw Par Healthcare Ltd 2.2 2.3 2.5 2.7 2.7 Yomeishu Seizo Co Ltd 2.3 2.4 2.2 2.2 2.2 Bio-Life Marketing (M) 2.2 2.2 2.2 2.1 2.1 Sdn Bhd VitaHealth Asia Pacific 2.1 2.0 2.0 1.9 1.9 (S) Pte Ltd Nin Jiom Medicine Mfy 1.5 1.6 1.7 1.7 1.7 (Hong Kong) Ltd Kordel's Ltd 1.7 1.7 1.7 1.6 1.6 CNI Enterprise (M) Sdn 1.9 1.7 1.6 1.6 1.5 Bhd Eu Yan Sang (1959) Sdn 0.7 0.9 1.2 1.2 1.2 Bhd Blackmores (M) Sdn Bhd 1.0 1.0 1.1 1.1 1.1 Leung Kai Fook Co Ltd 0.7 0.8 0.8 0.8 0.8 Enseval Megatrading (M) 0.8 0.8 0.8 0.8 0.8 Sdn Bhd 21st Century Products 0.7 0.8 0.7 0.7 0.7 Sdn Bhd Procter & Gamble (M) 0.7 0.7 0.7 0.7 0.7 Sdn Bhd Vita Health 0.7 0.7 0.7 0.7 0.6 Laboratories Pte Ltd Li Chung Shing Tong 0.7 0.7 0.7 0.6 0.6 (Holdings) Ltd Merck (M) Sdn Bhd 0.5 0.5 0.5 0.6 0.5 Soho Flordis - - - - 0.5 International Pty Ltd Huamao Agencies Sdn Bhd 0.7 0.7 0.7 0.6 0.5



Beaufour-Ipsen SA 0.6 0.6 0.6 0.5 0.5 Poon Goor Soe Ltd 0.6 0.5 0.5 0.5 0.5 Luen Fook Medicine Sdn 0.3 0.3 0.3 0.3 0.3 Bhd Herbal Revival Sdn Bhd 0.3 0.3 0.3 0.3 0.3 Ranbaxy (M) Sdn Bhd 0.2 0.2 0.2 0.2 0.2 Reckitt Benckiser (M) 0.2 0.2 0.2 0.2 0.2 Sdn Bhd Rohto-Mentholatum (M) 0.2 0.2 0.2 0.1 0.1 Sdn Bhd Total Health Concept 0.1 0.1 0.1 0.1 0.1 Sdn Bhd Hacks (M) Sdn Bhd 1.7 - - - - Cadbury Confectionery 1.5 - - - - (M) Sdn Bhd Boehringer Ingelheim 0.6 0.6 0.6 0.6 - (M) Sdn Bhd Supreme Health Products - - - - - Sdn Bhd Others 32.7 32.0 32.1 32.1 31.8 Total 100.0 100.0 100.0 100.0 100.0


Table 4 LBN Brand Shares of Herbal/Traditional Products: % Value 2010-2013

% retail value rsp Brand Company 2010 2011 2012 2013 Brand's Cerebos Sdn Bhd 11.8 12.2 12.9 14.1 Elken Elken Sdn Bhd 7.6 7.4 7.2 7.0 Fisherman's Friend Lofthouse of Fleetwood Ltd 4.2 4.1 4.0 3.9 Ricola Ricola Asia Pacific Pte 3.7 3.6 3.6 3.5 Ltd Pharmanex Nu Skin (M) Sdn Bhd 3.3 3.3 3.3 3.3 Pomesteen Forever Living Products 3.4 3.3 3.2 3.2 (M) Sdn Bhd Cosway Cosway (M) Sdn Bhd 3.5 3.3 3.2 3.1 Nutrilite Amway (M) Sdn Bhd 2.6 2.7 2.8 2.8 Yomeishu Yomeishu Seizo Co Ltd 2.4 2.2 2.2 2.2 Tiger Balm Haw Par Healthcare Ltd 1.9 2.0 2.1 2.2 Bio-Life Bio-Life Marketing (M) 2.2 2.2 2.1 2.1 Sdn Bhd VitaHealth VitaHealth Asia Pacific 2.0 2.0 1.9 1.9 (S) Pte Ltd Kordel's Kordel's Ltd 1.7 1.7 1.6 1.6 Halls Kraft Foods (M) Sdn Bhd 1.5 1.4 1.4 1.4 Hacks Kraft Foods (M) Sdn Bhd 1.6 1.6 1.5 1.4 CNI CNI Enterprise (M) Sdn Bhd 1.5 1.4 1.3 1.2 Eu Yan Sang Eu Yan Sang (1959) Sdn Bhd 0.9 1.2 1.2 1.2 Blackmores Blackmores (M) Sdn Bhd 1.0 1.1 1.1 1.1 Nin Jiom Pei Pa Koa Nin Jiom Medicine Mfy 1.0 1.0 1.0 1.0 (Hong Kong) Ltd Axe Brand Leung Kai Fook Co Ltd 0.8 0.8 0.8 0.8 Woods' Enseval Megatrading (M) 0.8 0.8 0.8 0.8 Sdn Bhd Nin Jiom Nin Jiom Medicine Mfy 0.6 0.7 0.7 0.7 (Hong Kong) Ltd 21st Century 21st Century Products 0.8 0.7 0.7 0.7



Sdn Bhd Vicks Procter & Gamble (M) 0.7 0.7 0.7 0.7 Sdn Bhd VitaHealth Vita Health 0.7 0.7 0.7 0.6 Laboratories Pte Ltd Po Chai Li Chung Shing Tong 0.7 0.7 0.6 0.6 (Holdings) Ltd Kwan Loong Haw Par Healthcare Ltd 0.5 0.5 0.5 0.6 Medicated Oil Seven Seas Merck (M) Sdn Bhd 0.5 0.5 0.6 0.5 Ginsana Soho Flordis - - - 0.5 International Pty Ltd Polleney Huamao Agencies Sdn Bhd 0.7 0.7 0.6 0.5 Tanakan Beaufour-Ipsen SA 0.6 0.6 0.5 0.5 Poon Goor Soe Poon Goor Soe Ltd 0.5 0.5 0.5 0.5 Win Elken Sdn Bhd 0.4 0.4 0.4 0.5 African Sea Coconut Luen Fook Medicine Sdn Bhd 0.3 0.3 0.3 0.3 Thomson Herbal Revival Sdn Bhd 0.3 0.3 0.3 0.3 Royal Ginkgo CNI Enterprise (M) Sdn Bhd 0.3 0.2 0.2 0.2 Ranbaxy Ranbaxy (M) Sdn Bhd 0.2 0.2 0.2 0.2 Senokot Reckitt Benckiser (M) 0.2 0.2 0.2 0.2 Sdn Bhd Mentholatum Rohto-Mentholatum (M) 0.2 0.2 0.1 0.1 Sdn Bhd Total Health Concept Total Health Concept 0.1 0.1 0.1 0.1 Sdn Bhd Ginsana Boehringer Ingelheim 0.6 0.6 0.6 - (M) Sdn Bhd Hacks Hacks (M) Sdn Bhd - - - - Halls Cadbury Confectionery - - - - (M) Sdn Bhd Sky Green Spirulinar Supreme Health Products - - - - Sdn Bhd Others 32.0 32.1 32.1 31.8 Total 100.0 100.0 100.0 100.0


Table 5 Forecast Sales of Herbal/Traditional Products by Category: Value 2013-2018

RM million 2013 2014 2015 2016 2017 2018 Herbal/Traditional 72.7 75.2 77.7 80.1 82.4 84.6 Topical Analgesics Herbal/Traditional - - - - - - Calming and Sleeping Products Herbal/Traditional 228.1 233.8 240.1 247.1 255.0 263.9 Cough, Cold and Allergy (Hay Fever) Remedies Herbal/Traditional 11.6 11.5 11.3 11.2 11.0 10.9 Digestive Remedies Herbal/Traditional - - - - - - Dermatologicals Herbal/Traditional - - - - - - Medicinal Teas Herbal/Traditional - - - - - - Smoking Cessation Aids



Herbal/Traditional - - - - - - Paediatric Dietary Supplements Herbal/Traditional 515.1 524.6 533.7 542.1 550.0 557.6 Dietary Supplements Herbal/Traditional 213.6 232.8 251.4 269.0 285.2 299.4 Tonics and Bottled Nutritive Drinks Herbal/Traditional 1,041.0 1,077.8 1,114.2 1,149.5 1,183.6 1,216.5 Products

Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 6 Forecast Sales of Herbal/Traditional Products by Category: % Value Growth 2013-2018

% constant value growth 2013-18 CAGR 2013/18 TOTAL Herbal/Traditional Topical Analgesics 3.1 16.5 Herbal/Traditional Calming and Sleeping Products - - Herbal/Traditional Cough, Cold and Allergy (Hay 3.0 15.7 Fever) Remedies Herbal/Traditional Digestive Remedies -1.2 -5.9 Herbal/Traditional Dermatologicals - - Herbal/Traditional Medicinal Teas - - Herbal/Traditional Smoking Cessation Aids - - Herbal/Traditional Paediatric Dietary Supplements - - Herbal/Traditional Dietary Supplements 1.6 8.2 Herbal/Traditional Tonics and Bottled Nutritive 7.0 40.2 Drinks Herbal/Traditional Products 3.2 16.9




HERBAL/TRADITIONAL PRODUCTS IN MALAYSIA - COMPANY PROFILES

CEREBOS SDN BHD IN CONSUMER HEALTH (MALAYSIA)

Strategic Direction

Cerebos Sdn Bhd aims to strengthen its position in vitamins and dietary supplements by

continuing to focus on research and development in order to launch new products that are

suitable for market needs and demands. Marketing activities are also paid special attention by

the company to raise awareness and brand equity for its core brand, Brands.

Company Background

Cerebos Sdn Bhd is a subsidiary of the Singaporean company Cerebos Pacific Ltd. By the

end of 2013, Cerebos Pacific Ltd held 60% of Cerebos Sdn Bhds shares. Cerebos Pacific is

publicly listed on the Singapore Exchange and has business operations in the consumer

health and packaged food industries.

Cerebos most popular brand is Brands, which includes liquid dietary supplement products.

Besides, it also has operations in packaged food and drinks.

Cerebos Sdn Bhd has a national coverage. It does not operate its own retail stores but it

distributes its products through supermarkets, hypermarkets, pharmacies and Chinese

medical halls. Its most popular brand, Brands, can be easily found throughout the country

due to its popularity and high demand from consumers.

In 2012, Cerebos Sdn Bhd won the Guardian Consumer Choice Awards in the Beauty Drink

category with the product Brands InnerShine Berry Essence with Grape Seed Extract. The

company was also awarded a Gold medal at the Malaysia Putra Brand Awards 2012.

Production

Cerebos Sdn Bhd opened its new manufacturing plant in Shah Alam in 2010 to replace the

previous one in Petaling Jaya with a more modern facility and higher capacity. The new

manufacturing plant specialises in its flagship brand, Brands, with a capacity of nearly 2

million bottles a month.

Cerebos manufacturing plant in Shah Alam caters to both the local market and export

markets.

Cerebos is not known to produce for any other third parties, including licensing and private

label, as the company focuses on its own brands to maintain high quality for all of its products.

Summary 1 Cerebos Sdn Bhd: Production Statistics 2013

Location Brand Annual production

Shah Alam Brands Nearly 22 million bottles

Source: Euromonitor International from company reports, company research, trade interviews



Competitive Positioning

Cerebos Sdn Bhd was ranked fourth in consumer health in 2013 with a value share of over

4%. Especially, the company was the leader in tonics and bottled nutritive drinks with over

half of the value share. Its share has been increasing continuously over the review period

thanks to strong efforts in research and development to launch new products that cater to

changing market demand. For example, at the end of 2012, the company launched Brands

Innershine RubyCollagen Essence, which is differentiated from other collagen drinks in the

market by containing micro-collagen molecules for better absorption by the body and

astaxanthin (micro-algae extract), advertised as natures most powerful antioxidant.

Although the company participates in a wide range of industries, from consumer health to

packaged food and drinks, it has a pretty narrow product portfolio in consumer health alone.

Its brand, Brands, focuses only on tonics and bottled nutritive drinks. This is one of the

fastest-growing categories in consumer health, giving the company lots of opportunity for

growth. Besides, by focusing on just one category, the company is able to build a very strong

brand equity. Brands is a well-known household name when it comes to tonics and bottled

nutritive drinks.

Cerebos Sdn Bhd positions itself at the mid-range of the market, with a pricing strategy that is

affordable to most middle-income and upper-income urban families.

Cerebos Sdn Bhd could be considered a leader in terms of market innovation. Over the years,

the company has launched many new products with novel features to the market, such as

Brands Innershine RubyCollagen Essence at the end of 2012. Many of its products have

garnered success and awards. For example, in 2012, the company won the Guardian

Consumer Choice Awards in the Beauty Drink category with Brands InnerShine Berry

Essence with Grape Seed Extract.

Summary 2 Cerebos Sdn Bhd: Competitive Position 2013

Product type Value share Rank

Consumer health 4.3% 4

Vitamins and dietary supplements

8.5% 2

Tonics and bottled nutritive drinks

50.5% 1


COSWAY (M) SDN BHD IN CONSUMER HEALTH (MALAYSIA)

Strategic Direction

Cosway (M) aims to maintain its position in consumer health by continuously investing in

research and development to launch better products, expanding its distribution network, as

well as modernising its brand image to compete with its main competitors, which are mostly

international direct sellers.



Company Background

Cosway (M) is an independent private company which began its operations in Malaysia in

December 1979. It is also a wholly-owned subsidiary of Berjaya Group in Malaysia. Cosway

(M)s headquarters is located at Wisma Cosway, in the middle of Kuala Lumpurs premier

Golden Triangle area.

The company specialises in the direct selling model with a wide range of products, including

beauty and personal care, vitamins and dietary supplements, weight management products,

home care and packaged food amongst others. Apart from direct selling, Cosway (M) has

also ventured into Cosway Pharmacy by opening new store-based retail outlets selling its own

products as well as prescribed drugs from other manufacturers.

Cosway (M) has hundreds of its Stockist Centres located throughout the country which are

responsible for distributing its products to its sales agents and customers. Almost all the

states in Malaysia are covered by these Stockist Centres. In addition, its Cosway Pharmacy

concept stores have helped to enhance the coverage of its distribution network within

Malaysia since their opening in 2012.

Production

Cosway (M) does not handle the manufacturing of its products by itself, but it collaborates

with contract manufacturers, one of which is Eng Kah Corp Bhd. Cosway (M) also owns a few

subsidiaries that it has acquired over the years, which are in charge of the manufacturing of

some of its products. Thanks to its strong manufacturing capacity that comes from both of its

subsidiaries and contract manufacturers, Cosway (M) supplies the Malaysian market locally,

and even exports to neighbouring countries, such as Singapore.

Cosway (M) is not known to manufacture for any other third parties, either under licence or

private label.


In 2013, Cosway (M) was ranked seventh in Malaysian consumer health with a value share of

just over 3%. The company has lost share over the review period and dropped in ranking from

the fourth place in 2008 to seventh in 2010, mainly due to the lack of product innovation, a

dull brand image and strong competition from international players like Herbalife Products (M)

and Amway (M).

By focusing on vitamins, dietary supplements and weight management products, the

company positions itself in some of the highest-growing categories of the Malaysian

consumer health industry.

Cosway (M) possesses a very wide product portfolio, including consumer health, beauty and

personal care, home care and packaged food amongst others. That being said, despite being

well known for its extensive product portfolio, the company is not as famous in terms of

product quality. The company targets mainly the low-end segment with consumers who look

for value for money products.

Summary 3 Cosway (M) Sdn Bhd: Competitive Position 2013






5.8% 4

Dietary supplements 6.9% 4

Vitamins 8.3% 3

Weight management 0.4% 9

Slimming teas 13.1% 4


ELKEN SDN BHD IN CONSUMER HEALTH (MALAYSIA)

Strategic Direction

Elken Sdn Bhd aims to raise its share in vitamins and dietary supplements in Malaysia,

especially maintaining its leading ranking in spirulina, through a combination of strong

marketing activities, widening distribution network and research and development to launch

new products to cater to changing market needs and demands.

Company Background

Elken Sdn Bhd was established in Malaysia in 1995 and remained a private company at the

end of 2013. Over the years, the company has opened branches in neighbouring countries,

including Singapore, Thailand, Indonesia, Brunei and Hong Kong, China.

The company has a wide range of products, including consumer healthcare, beauty and

personal care, packaged food, non-alcoholic drinks and home appliances. Its consumer

healthcare products, consisting mostly of vitamins and dietary supplements, remained some

of its most popular products in 2013.

Elken Sdn Bhd has a national coverage, spreading from East to West Malaysia. West

Malaysia (or Peninsular Malaysia) has a higher concentration of its business due to the better

economic conditions compared to East Malaysia.

In 2013, the company continued its regional expansion with the opening of a Hanoi office and

service centre, marking its second year of operation in Vietnam after the opening of the Ho

Chi Minh City office in 2012.

Production

Elken Sdn Bhd supplies the local market from in-country manufacturing facilities. Besides, the

company also exports to other Asian countries, including Singapore; Hong Kong, China;

Vietnam; and India, amongst others.

It is not known that Elken Sdn Bhd also produces for any other third parties, including

licensing and private label. The company mostly focuses on its own brand in order to maintain

the high quality of its products.




Elken Sdn Bhd was ranked eighth in consumer health in Malaysia in 2013. Especially, the

company was ranked the top player in spirulina with a dominating share of 66%. Elken Sdn

Bhds spirulina is very popular in the market thanks to its early entrance to this category, and

strong marketing and advertising activities that have made Elken a household name for

spirulina products.

Its share in consumer health was decreasing over the review period, although the company

still sustained its market share in spirulina. The reason was because of spirulinas slower

growth compared to the whole consumer health industry. Spirulina is considered to be more

mature than many other vitamins and dietary supplements products, due to its early

appearance in Malaysia.

Although Elken Sdn Bhd has quite many products in its portfolio, the bulk of its revenue

comes from spirulina. As such, the performance of this category has great impact on the

companys total sales. Spirulinas slow growth negatively affected Elken Sdn Bhds

performance over the review period, resulting in its lowering share.

Elken Sdn Bhd positions itself at the mid-range of the market, targeting middle-income urban

consumers.

Summary 4 Elken Sdn Bhd: Competitive Position 2013




5.2% 5

Dietary supplements 8.5% 2

Spirulina 66.2% 1




CONSUMER HEALTH IN MALAYSIA - INDUSTRY OVERVIEW

EXECUTIVE SUMMARY

Slight Growth Recorded in 2013

Consumer health in Malaysia recorded slightly slower growth in 2013 as compared to 2012

and the review periods CAGR, mainly due to the maturity of most products. There were no

significant events and happenings in 2013 to result in a stronger overall performance for

consumer health. Vitamins and dietary supplements was one of the few products with higher

growth rate in 2013, as consumers were more concerned about their long-term health and were

more willing to spend on sickness prevention.

Worsening Pollution Brings Higher Growth for Eye Care

In 2013, eye care recorded a value growth rate that was slightly faster than 2012 growth and

the review periods CAGR, due to the very bad air pollution caused by wildfires from Indonesia.

Strong wind blew the smoke from Indonesia to many places in Malaysia, in some cases causing

the air pollution index to rise to hazardous levels. Besides creating respiratory sicknesses such

that many people had to seek help from doctors, the air pollution also led to eye problems,

which eventually led to a surging demand for eye care products.

International Players Dominate Consumer Health

International players continued to dominate consumer health with their trusted and well-known

brands. International players tend to have the advantage over local players in terms of bigger

financial capability for research and development, world-renowned brands and stronger

marketing budgets. Thus, it was usually challenging for local players to gain shares at the

expense of international players.

Direct Selling Remains the Most Important Distribution Channel

Direct selling continued to grow in value share and maintain its leading position as the biggest

distribution channel for consumer health in 2013. Direct selling is especially crucial for weight

management products and vitamins and dietary supplements, where direct sellers like Herbalife

Products (M), Amway (M) and Nu Skin (M) led the market with dominating shares. However, in

OTC medicine, health specialists like chemists and drugstores still accounted for the biggest

shares as they are the most convenient and familiar channels when consumers need to buy

medicine urgently.

Slowing But Positive Growth for Consumer Health Is Expected Over the Forecast Period

In the 5-year forecast period, consumer health is expected to record slowing growth, but

constant value growth rates will remain positive. Slowing growth is inevitable due to the maturity

of the industry. However, as consumer awareness of health issues rises and consumers

become more confident with self-medication, demand for consumer health products will

continue to rise.



KEY TRENDS AND DEVELOPMENTS

Busier, More Stressful Lifestyle and Urbanisation Help To Maintain Growth of Consumer Health

With the positive growth of the local economy and further integration of Malaysia into the

regional and global economy, more jobs were being created, and people became busier with

their working lives. Urbanisation also contributed to this issue, as the urban population rose

continuously every year throughout the review period. With the more stressful urban lifestyle,

more people were prone to sicknesses, such as eating disorders or sleeping disorders.

Together with this urbanisation trend, consumers also became more educated, and many

were more comfortable with the idea of self-medication. As they had more knowledge about

different kinds of OTC medicines and vitamins and dietary supplements, they felt more confident

making decisions about choosing medicines to treat certain minor diseases.

As a result, consumer health continued to record pretty strong growth of nearly 8% in retail

value sales in 2013, just slightly slower than that of 2012. Certain products even logged much

better growth in 2013 compared to the previous year, such as tonics and bottled nutritive drinks,

spirulina, cod liver oil and multivitamins.

Outlook

Consumer health in Malaysia is expected to continue recording good positive growth over the

forecast period. Even though Malaysia already has a pretty high urban population compared to

other ASEAN countries, urbanisation will continue taking place as the percentage of the urban

population is expected to rise from 73% in 2013 to 77% in 2018. With this, the education level of

most consumers will be improved and they will have more knowledge of self-medication and

other consumer health products. Urbanisation will also lead to a busier and more stressful

lifestyle for many people, resulting in many sicknesses that would provide an opportunity for

consumer health to grow.

As consumers become more educated and sophisticated, more will also be attracted to the

idea of prevention is better than cure. As such, products like vitamins, dietary supplements and

weight management products will perform well in the forecast period as they are all perceived as

having disease-preventing benefits. NRT smoking cessation aids is also another category with

high growth expected over the forecast period, as more people try to quit smoking as a way to

maintain good health.

Stronger Demand From Female Consumers Drives Growth for Beauty-related Products

By the end of 2012, women made up over 46% of Malaysias workforce, which was still lower

than the percentage of women in the population of 49% and the average of ASEAN countries.

However, this percentage has been growing over the review period thanks to the governments

efforts in educating the people on gender equality and in bringing more of the female population

to school. This has brought more financial independence to female consumers, and also

increased the demand for taking care of ones personal image as the women have more

exposure to the public.

As a result of the rising financial independence and higher demand for taking care of ones

self-image, more women purchased beauty-related consumer health products as a way to

improve their health and look, besides cosmetics and skin care products. These included

several vitamins and dietary supplements that are positioned for beauty care, such as

coenzyme Q10 and tonics and bottled nutritive drinks. Collagen drinks were amongst the most



popular products with brands like Brands, Kinohimitsu and NH Colla Plus. Companies also

spent on research and development to go further with their ingredients to launch products that

have better quality. For example, Cerebos Sdn Bhd launched Brands Innershine RubyCollagen

Essence at the end of 2012 that contains micro-collagen for better absorption by the body and

astaxanthin (micro-algae extract), which is advertised to be natures most powerful antioxidant.

Being slim is also perceived as a major factor of beauty in Malaysia. As a result, products like

meal replacement slimming and weight loss supplement also recorded good growth in 2013.

Consumers want to look beautiful, but they have little time to exercise and eat healthily due to

the busy schedule of office work and housework. Thus, many female consumers relied on these

products to maintain their slim figure and stay beautiful.

Outlook

With better education and efforts from the government to balance the ratio of men versus

women in the workforce, the percentage of female workers is expected to continue increasing

over the forecast period. Besides, together with the rising trend in disposable income of the

whole country, the female population will also be able to achieve more financial impendence.

In the forecast period and beyond, many beauty-related products are expected to continue

recording strong growth as a result of the rising demand from the female consumers to take

care of their health and beauty. These would include products that are positioned as beauty

from within, such as coenzyme Q10 and collagen drinks, and also weight management

products.

With better education level, consumers will also be smarter in choosing their products. As

such, the competition level will rise as companies will spend every effort in tapping into this fast-

rising market segment. Research and development for improvement of product quality is crucial

for success, as the female consumers will have more sophisticated demand when selecting their

healthcare and beauty products. Marketing programmes will also play a big role in building

brand names and communicating the products quality and effectiveness to consumers.

High Percentage of Overweight and Obese Population

Malaysia has the highest percentage of overweight and obese population amongst ASEAN

countries. In 2012, 29% of the population was overweight, and 15% was obese. Furthermore,

these statistics grew steadily throughout the review period. Reasons included unhealthy eating

habits, as many traditional Malaysian dishes are high in simple carbohydrates and oil, and the

increasingly busy lifestyle that resulted in more stress and less time for exercise. Overweight

and obese conditions led to high numbers of cardiovascular diseases, which was one of the

major concerns of consumer health in 2013.

Many consumers tried various ways to control their weight, by changing their lifestyle and

eating habits. Weight management products are also consumed on a regular basis by many

consumers as a convenient and easy way to lose weight and improve their health condition.

Meal replacement slimming, for example, recorded outstanding growth of over 17% in 2013.

Concerns for cardiovascular diseases also led to rising consumption of certain OTC

medicines, one of which is aspirin. Aspirin is not widely known as a painkiller, the positioning

that has been dominated by acetaminophen, but by its ability in prevention of heart attacks and

other cardiovascular diseases. A majority of aspirin sold in the market was low-dose (300-

350mg), which was used for this purpose instead of the standard dose (500mg), which was

used as a painkiller.

Outlook

Despite the governments efforts in educating the public on healthier eating ways and

promoting exercise, the percentage of the overweight and obese population is not expected to



see a significant lowering trend over the forecast period. The traditional Malaysian eating habits,

with food that tends to be high in carbohydrates and fats, have been deeply rooted in many

Malaysian consumers and it is hard for them to change in a short period of time. Besides, a

busier lifestyle also causes people to have less time for exercising and taking proper care of

themselves.

The high percentage of the overweight and obese population will continue to bring

opportunities for weight management products, as consumers seek an easy and convenient

way to maintain a healthy weight. OTC medicines like low-dose aspirin will also see rising

demand as overweight and obese people consume it to prevent heart-related diseases. Over

the forecast period, aspirin is expected to be the fastest-growing product in analgesics,

overtaking the faster growth rate of acetaminophen during the review period.

International and Direct Selling Players Dominates Consumer Health

Big international companies took the high rankings in the consumer health industry in

Malaysia, amongst which there were many direct sellers such as Herbalife Products, Amway,

Nu Skin and USANA Health Sciences. International players had the advantage over local

players in terms of stronger financial capability, more well-known brands and longer history of

research and development knowledge. Thus, for consumer health products which tend to attract

consumers based on the popularity and trustworthiness of the brand names and product quality,

international companies fared better than local players.

Direct selling companies led in weight management and vitamins and dietary supplements.

These products observed strong growth over the review period thanks to rising disposable

income and increasing consumer awareness of healthcare and sickness prevention issues.

However, unlike OTC medicines for which consumers can seek clear indication information from

the packaging or from the doctors and pharmacists, vitamins and dietary supplements are not

meant to cure any specific disease. Thus, direct selling agents played an important role in

promoting the benefits of their products in terms of sickness prevention to the consumers to

drive demand and sales.

Outlook

This trend is expected to continue over the forecast period. Big international players have built

such a strong position in the country that it is very challenging for local players to compete.

Besides, these international players will continue to invest in Malaysia in order to maintain and

strengthen their rankings.

With the strong growth of weight management products and vitamins and dietary

supplements, the positions of direct selling players will continue to be strengthened over the

forecast period. In fact, these companies have continuously gained shares over the review

period, and this momentum will carry on in the near future as consumers still have trust in their

products and consultations with representatives.

MARKET INDICATORS

Table 7 Consumer Expenditure on Health Goods and Medical Services: Value 2008-2013

RM million 2008 2009 2010 2011 2012 2013 Pharmaceuticals, 5,505.6 6,105.5 6,652.8 7,237.6 8,124.1 8,925.7 medical appliances/



equipment Outpatient services 2,119.1 2,311.6 2,484.8 2,668.8 2,960.6 3,215.2 Hospital services 1,254.2 1,354.0 1,442.8 1,536.6 1,691.2 1,822.1 Total 8,878.9 9,771.1 10,580.4 11,443.1 12,775.9 13,963.1

Source: Euromonitor International from official statistics, trade associations, trade interviews

Table 8 Life Expectancy at Birth 2008-2013

years 2008 2009 2010 2011 2012 2013 Males 71.6 71.8 71.9 72.1 72.2 72.4 Females 76.5 76.8 77.0 77.2 77.4 77.5

Source: Euromonitor International from official statistics

MARKET DATA

Table 9 Sales of Consumer Health by Category: Value 2008-2013

RM million 2008 2009 2010 2011 2012 2013 OTC 616.8 642.6 672.3 700.2 727.4 754.0 Sports Nutrition 8.9 9.2 9.6 10.0 10.4 10.8 Vitamins and Dietary 1,241.0 1,339.3 1,444.7 1,530.3 1,617.3 1,723.5 Supplements Weight Management 364.0 469.7 577.9 678.6 799.8 910.0 Herbal/Traditional 794.1 843.8 890.3 935.2 981.3 1,041.0 Products Allergy Care 11.5 11.9 12.4 12.8 13.2 13.6 Paediatric Consumer 53.0 56.1 59.7 62.9 66.0 69.1 Health Consumer Health 2,230.8 2,460.9 2,704.5 2,919.1 3,154.9 3,398.3


Note: Sum of categories is greater than the market size because allergy care is a duplicate of categories found in cough, cold and allergy remedies, dermatologicals and eye care; paediatric consumer health is an aggregate of paediatric categories in OTC and vitamins and dietary supplements; and herbal/traditional products is an aggregate of herbal/traditional categories in OTC and vitamins and dietary supplements, except herbal/traditional medicinal teas and herbal/traditional smoking cessation aids.

Table 10 Sales of Consumer Health by Category: % Value Growth 2008-2013

% current value growth 2012/13 2008-13 CAGR 2008/13 Total OTC 3.6 4.1 22.2 Sports Nutrition 4.3 3.9 21.3 Vitamins and Dietary Supplements 6.6 6.8 38.9 Weight Management 13.8 20.1 150.0 Herbal/Traditional Products 6.1 5.6 31.1 Allergy Care 3.2 3.4 18.3 Paediatric Consumer Health 4.7 5.5 30.5 Consumer Health 7.7 8.8 52.3





Table 11 NBO Company Shares of Consumer Health: % Value 2009-2013

% retail value rsp Company 2009 2010 2011 2012 2013 Herbalife Products (M) 8.8 9.2 10.2 12.3 13.8 Sdn Bhd Amway (M) Sdn Bhd 12.1 11.8 11.6 11.3 11.2 Nu Skin (M) Sdn Bhd 3.0 4.9 5.9 6.1 6.1 Cerebos Sdn Bhd 3.8 3.9 3.9 4.0 4.3 GlaxoSmithKline 4.6 4.4 4.4 4.3 4.2 Consumer Healthcare Sdn Bhd USANA Health Sciences 4.0 4.0 4.0 4.1 4.1 Sdn Bhd Cosway (M) Sdn Bhd 3.6 3.5 3.3 3.2 3.1 Elken Sdn Bhd 3.2 3.0 2.9 2.7 2.6 HerbalCeutical Sdn Bhd 1.6 1.8 2.1 2.3 2.4 Reckitt Benckiser (M) 2.8 2.7 2.6 2.5 2.4 Sdn Bhd VitaHealth Asia Pacific 2.3 2.2 2.1 2.0 2.0 (S) Pte Ltd 21st Century Products 2.0 2.0 2.0 1.9 1.9 Sdn Bhd Blackmores (M) Sdn Bhd 1.8 1.8 1.9 1.8 1.8 Forever Living Products 2.1 2.0 1.9 1.8 1.7 (M) Sdn Bhd CCM Pharmaceuticals Sdn 2.0 1.9 1.7 1.6 1.5 Bhd Total Image Regional 1.2 1.3 1.3 1.3 1.3 (M) Sdn Bhd TR Networks (M) Sdn Bhd 0.6 1.0 1.1 1.2 1.3 Bio-Life Marketing (M) 1.5 1.4 1.4 1.3 1.3 Sdn Bhd Boehringer Ingelheim 1.5 1.5 1.5 1.5 1.3 (M) Sdn Bhd Lofthouse of Fleetwood 1.5 1.4 1.3 1.3 1.2 Ltd Kordel's Ltd 1.3 1.2 1.2 1.2 1.2 Ricola Asia Pacific Pte 1.3 1.2 1.2 1.1 1.1 Ltd Bayer (M) Sdn Bhd 1.1 1.1 1.1 1.1 1.1 Nutra-Life Health & 1.0 0.9 0.9 0.9 0.9 Fitness (NZ) Ltd Kraft Foods (M) Sdn Bhd - 1.0 1.0 0.9 0.9 CNI Enterprise (M) Sdn 1.2 1.1 1.0 0.9 0.8 Bhd Haw Par Healthcare Ltd 0.7 0.8 0.8 0.8 0.8 Yomeishu Seizo Co Ltd 0.8 0.8 0.7 0.7 0.7 Enseval Megatrading (M) 0.6 0.6 0.6 0.6 0.5 Sdn Bhd Total Health Concept 0.6 0.6 0.6 0.5 0.5



Sdn Bhd Hacks (M) Sdn Bhd 0.6 - - - - Others 26.9 25.2 24.1 22.8 21.9 Total 100.0 100.0 100.0 100.0 100.0


Table 12 LBN Brand Shares of Consumer Health: % Value 2010-2013

% retail value rsp Brand Company 2010 2011 2012 2013 Herbalife Herbalife Products (M) 9.2 10.2 12.3 13.8 Sdn Bhd Nutrilite Amway (M) Sdn Bhd 10.9 10.7 10.5 10.3 Pharmanex Nu Skin (M) Sdn Bhd 4.9 5.9 6.1 6.1 Brand's Cerebos Sdn Bhd 3.9 3.9 4.0 4.3 USANA USANA Health Sciences 3.2 3.2 3.3 3.3 Sdn Bhd Cosway Cosway (M) Sdn Bhd 3.4 3.2 3.1 3.0 Panadol GlaxoSmithKline 3.0 2.9 2.9 2.8 Consumer Healthcare Sdn Bhd Elken Elken Sdn Bhd 2.9 2.7 2.6 2.5 VitaHealth VitaHealth Asia Pacific 2.1 2.1 2.0 2.0 (S) Pte Ltd 21st Century 21st Century Products 2.0 2.0 1.9 1.9 Sdn Bhd Blackmores Blackmores (M) Sdn Bhd 1.8 1.9 1.8 1.8 NH Detoxlim HerbalCeutical Sdn Bhd 1.5 1.6 1.6 1.6 Kinohimitsu TR Networks (M) Sdn Bhd 1.0 1.1 1.2 1.3 Bio-Life Bio-Life Marketing (M) 1.4 1.4 1.3 1.3 Sdn Bhd Total Image Total Image Regional 1.2 1.3 1.3 1.3 (M) Sdn Bhd Fisherman's Friend Lofthouse of Fleetwood Ltd 1.4 1.3 1.3 1.2 Pharmaton Boehringer Ingelheim 1.2 1.2 1.2 1.2 (M) Sdn Bhd Kordel's Kordel's Ltd 1.2 1.2 1.2 1.2 Ricola Ricola Asia Pacific Pte 1.2 1.2 1.1 1.1 Ltd Pomesteen Forever Living Products 1.1 1.1 1.0 1.0 (M) Sdn Bhd Nutra-life Nutra-Life Health & 0.9 0.9 0.9 0.9 Fitness (NZ) Ltd Dettol Reckitt Benckiser (M) 1.0 1.0 0.9 0.9 Sdn Bhd Positrim Amway (M) Sdn Bhd 0.9 0.9 0.9 0.9 NH Colla Plus HerbalCeutical Sdn Bhd 0.3 0.5 0.7 0.8 CNI CNI Enterprise (M) Sdn Bhd 1.0 0.9 0.8 0.8 Forever Living Forever Living Products 0.9 0.8 0.8 0.8 (M) Sdn Bhd Nutrimeal USANA Health Sciences 0.8 0.8 0.8 0.8 Sdn Bhd Yomeishu Yomeishu Seizo Co Ltd 0.8 0.7 0.7 0.7 Strepsils Reckitt Benckiser (M) 0.8 0.7 0.7 0.7 Sdn Bhd Tiger Balm Haw Par Healthcare Ltd 0.6 0.6 0.7 0.7 Others 33.5 32.2 30.6 29.2



Total 100.0 100.0 100.0 100.0


Table 13 Distribution of Consumer Health by Format: % Value 2008-2013

% retail value rsp 2008 2009 2010 2011 2012 2013 Store-Based Retailing 58.3 57.3 56.1 53.5 52.8 52.2 - Grocery Retailers 8.2 7.7 7.4 7.3 7.0 6.8 -- Modern Grocery 8.0 7.6 7.3 7.1 6.9 6.7 Retailers --- Convenience Stores 0.0 0.0 0.0 0.0 0.0 0.0 --- Discounters 0.0 0.0 0.0 0.0 0.0 0.0 --- Forecourt Retailers 0.0 0.0 0.0 0.0 0.0 0.0 --- Hypermarkets 6.3 5.9 5.7 5.6 5.4 5.3 --- Supermarkets 1.7 1.7 1.6 1.5 1.5 1.4 -- Traditional Grocery 0.1 0.1 0.1 0.1 0.1 0.1 Retailers --- Food/drink/tobacco 0.0 0.0 0.0 0.0 0.0 0.0 specialists --- Independent Small 0.1 0.1 0.1 0.1 0.1 0.1 Grocers --- Other Grocery 0.0 0.0 0.0 0.0 0.0 0.0 Retailers ---- Healthfood shops 0.0 0.0 0.0 0.0 0.0 0.0 ---- Other Other 0.0 0.0 0.0 0.0 0.0 0.0 Grocery Retailers - Non-Grocery Retailers 50.1 49.6 48.7 46.3 45.8 45.4 -- Health and Beauty 49.5 49.0 48.1 45.8 45.3 44.9 Specialist Retailers --- Beauty Specialist 0.0 0.0 0.0 0.0 0.0 0.0 Retailers --- Chemists/Pharmacies 18.6 16.8 14.4 12.6 11.6 10.8 --- Optical Goods Stores 0.0 0.0 0.0 0.0 0.0 0.0 --- Parapharmacies/ 27.3 28.6 30.1 29.8 30.3 30.8 Drugstores --- Other Healthcare 3.6 3.6 3.6 3.4 3.3 3.3 Specialist Retailers -- Mixed Retailers 0.0 0.0 0.0 0.0 0.0 0.0 --- Department Stores 0.0 0.0 0.0 0.0 0.0 0.0 --- Mass Merchandisers 0.0 0.0 0.0 0.0 0.0 0.0 --- Variety Stores 0.0 0.0 0.0 0.0 0.0 0.0 --- Warehouse Clubs 0.0 0.0 0.0 0.0 0.0 0.0 -- Other Consumer 0.6 0.6 0.6 0.5 0.5 0.5 Health Non-Grocery Retailers Non-Store Retailing 41.7 42.7 43.9 46.5 47.2 47.8 - Vending 0.0 0.0 0.0 0.0 0.0 0.0 - Homeshopping 0.0 0.0 0.0 0.0 0.0 0.0 - Internet Retailing 0.1 0.2 0.2 0.2 0.2 0.2 - Direct Selling 41.6 42.5 43.8 46.3 47.0 47.6 Total 100.0 100.0 100.0 100.0 100.0 100.0




Table 14 Distribution of Consumer Health by Format and Category: % Value 2013

% retail value rsp OTC SN VDS WM HTP AC Store-Based Retailing 99.7 77.8 49.0 18.5 64.3 100.0 Grocery Retailers 21.7 0.0 2.8 2.2 10.4 32.7 Modern Grocery Retailers 21.2 0.0 2.8 2.2 10.2 31.9 Convenience Stores 0.0 0.0 0.0 0.0 0.0 0.0 Discounters 0.0 0.0 0.0 0.0 0.0 0.0 Forecourt Retailers 0.0 0.0 0.0 0.0 0.0 0.0 Hypermarkets 16.5 0.0 2.2 1.8 7.9 24.9 Supermarkets 4.7 0.0 0.6 0.4 2.2 7.0 Traditional Grocery 0.5 0.0 0.0 0.0 0.2 0.8 Retailers Food/drink/tobacco 0.0 0.0 0.0 0.0 0.0 0.0 specialists Independent Small Grocers 0.5 0.0 0.0 0.0 0.2 0.8 Other Grocery Retailers 0.0 0.0 0.0 0.0 0.0 0.0 Healthfood shops 0.0 0.0 0.0 0.0 0.0 0.0 Other Other Grocery 0.0 0.0 0.0 0.0 0.0 0.0 Retailers Non-Grocery Retailers 78.0 77.8 46.2 16.3 53.9 67.3 Health and Beauty 77.6 76.7 45.4 16.3 53.4 67.3 Specialist Retailers Beauty Specialist 0.0 0.0 0.0 0.0 0.0 0.0 Retailers Chemists/Pharmacies 29.3 7.0 7.0 2.7 10.4 23.2 Optical Goods Stores 0.0 0.0 0.0 0.0 0.0 0.0 Parapharmacies/Drugstores 48.4 18.5 33.7 10.8 39.7 44.1 Other Healthcare 0.0 51.2 4.7 2.8 3.3 0.0 Specialist Retailers Mixed Retailers 0.0 0.0 0.0 0.0 0.0 0.0 Department Stores 0.0 0.0 0.0 0.0 0.0 0.0 Mass Merchandisers 0.0 0.0 0.0 0.0 0.0 0.0 Variety Stores 0.0 0.0 0.0 0.0 0.0 0.0 Warehouse Clubs 0.0 0.0 0.0 0.0 0.0 0.0 Other Consumer Health 0.4 1.1 0.8 0.0 0.5 0.0 Non-Grocery Retailers Non-Store Retailing 0.3 22.2 51.0 81.5 35.7 0.0 Vending 0.0 0.0 0.0 0.0 0.0 0.0 Homeshopping 0.0 0.0 0.0 0.0 0.0 0.0 Internet Retailing 0.0 22.2 0.0 0.5 0.0 0.0 Direct Selling 0.3 0.0 51.0 81.0 35.7 0.0 Total 100.0 100.0 100.0 100.0 100.0 100.0 PCH Store-Based Retailing 64.4 Grocery Retailers 7.5 Modern Grocery Retailers 7.4 Convenience Stores 0.0 Discounters 0.0 Forecourt Retailers 0.0 Hypermarkets 5.8 Supermarkets 1.6 Traditional Grocery 0.1 Retailers Food/drink/tobacco 0.0 specialists



Independent Small Grocers 0.1 Other Grocery Retailers 0.0 Healthfood shops 0.0 Other Other Grocery 0.0 Retailers Non-Grocery Retailers 57.0 Health and Beauty 56.3 Specialist Retailers Beauty Specialist 0.0 Retailers Chemists/Pharmacies 16.7 Optical Goods Stores 0.0 Parapharmacies/Drugstores 36.3 Other Healthcare 3.3 Specialist Retailers Mixed Retailers 0.0 Department Stores 0.0 Mass Merchandisers 0.0 Variety Stores 0.0 Warehouse Clubs 0.0 Other Consumer Health 0.7 Non-Grocery Retailers Non-Store Retailing 35.6 Vending 0.0 Homeshopping 0.0 Internet Retailing 0.0 Direct Selling 35.6 Total 100.0


Key: OTC = over the counter; SN = sports nutrition; VDS = vitamins and dietary supplements; WM = weight management; HTP = herbal/traditional products; AC = Allergy Care; PCH = paediatric consumer health

Table 15 Forecast Sales of Consumer Health by Category: Value 2013-2018

RM million 2013 2014 2015 2016 2017 2018 OTC 754.0 764.7 774.6 783.8 792.0 799.3 Sports Nutrition 10.8 11.1 11.3 11.5 11.7 11.8 Vitamins and Dietary 1,723.5 1,791.2 1,853.9 1,913.3 1,968.4 2,018.1 Supplements Weight Management 910.0 993.1 1,070.2 1,147.2 1,217.2 1,285.0 Herbal/Traditional 1,041.0 1,077.8 1,114.2 1,149.5 1,183.6 1,216.5 Products Allergy Care 13.6 13.8 13.9 14.1 14.2 14.4 Paediatric Consumer 69.1 70.8 72.3 73.8 75.2 76.6 Health Consumer Health 3,398.3 3,560.1 3,710.1 3,855.8 3,989.3 4,114.3



Table 16 Forecast Sales of Consumer Health by Category: % Value Growth 2013-2018



% constant value growth 2013-18 CAGR 2013/18 TOTAL OTC 1.2 6.0 Sports Nutrition 1.7 9.0 Vitamins and Dietary Supplements 3.2 17.1 Weight Management 7.1 41.2 Herbal/Traditional Products 3.2 16.9 Allergy Care 1.0 5.2 Paediatric Consumer Health 2.1 10.8 Consumer Health 3.9 21.1



APPENDIX

OTC Registration and Classification

The Drug Control Authority (DCA) requires all drugs in pharmaceutical dosage form to be

registered with it before being manufactured, imported, sold or supplied. This includes

pharmaceutical products that contain scheduled poisons as defined in the Poisons Act 1952;

pharmaceutical products that do not contain scheduled poisons; traditional medicines and

homoeopathic medicines. All manufacturers, importers and wholesalers are required by the

Drug Control Authority to register their products. To obtain a licence, products must meet

strict evaluation standards.

The Malaysian government has greatly restricted the advertising of pharmaceuticals and

consumer health products. Except for A, B and C categories of scheduled poisons, all classes

of pharmaceuticals can be advertised directly to consumers. Doctors and pharmacies are the

main target of the advertising and especially marketing within the group. Otherwise,

advertising is allowed for other products, such as non-poison products. The advertising of

drugs in Malaysia is governed by the Medicine Advertisement Act. All adverts for medicine

and health products and services are required by this act to be registered with the Medicines

and Advertisement Board. Only approved advertisements will be given a Kementerian

Kesihatan Lembaga Iklan Ubat (KKLIU) approval number.

The law does not allow any child-specific products to be packaged in the shape or form of

toys and cartoon characters or to be sold together with toys or gifts. However, it does not

restrict toys, cartoons and colourful pictures from being depicted on product packaging.

Starting on 1 April 2004, the Drug Control Authority required all liquid cough mixtures to be

fixed at a maximum pack size of 120ml +/- 10ml. This is pertinent to liquid cough preparations

for both local consumption and exports. However, traditional liquid medicine cough

preparations and liquid cough preparations containing pholcodeine are not affected by the

new guidelines.

In order to help consumers to identify products which are registered with Malaysias DCA, all

registered products for distribution and sale in Malaysia must carry the Malay language words

dilulus oleh Kementerian Kesihatan or dilulus oleh KKM on the immediate label, which



means recognised by the Ministry of Health. In addition, registration holders are also

encouraged to print the DCA holographic logo on the label for easier identification. Malaysias

DCA decided to limit the use of cough and cold products for children because they had not

been proved to be effective and can be harmful to children, as the US Food and Drug

Administration (FDA) panel of advisers suggested in 2007 that OTC cough and cold

medicines should not be used for children younger than six years old. Display of warnings

stating Not to be used for children under two years of age and To be used with caution and

on doctors/pharmacists advice for children aged two to six on both the labels and package

inserts is compulsory on all prescription oral liquid preparations containing antihistamines,

antitussives and decongestants.

In Malaysia, prescription medicines comprise patented and generic drugs, the sale and

transaction of which are confined to doctors and registered pharmacists only. On the other

hand, OTC non-poisons and herbal/traditional products are allowed to be sold by non-

professional outlets for example, supermarkets, convenience stores, petrol forecourts and

Chinese medical halls to the general public.

Vitamins and Dietary Supplements Registration and Classification

In Malaysia, vitamins and dietary supplements are not grouped by any special class as they

are regulated as OTC non-poisons, or in some cases as traditional medicines, depending on

their indications for use. Therefore, as required by Control of Drugs and Cosmetics

Regulations 1984, all drugs in a pharmaceutical dosage form, including dietary and herbal

supplements, must be registered with the Drug Control Authority. A Free Sale Certificate and

Good Manufacturing Practice Certificate are required for all vitamins and dietary supplements

and traditional medicines.

The Medicine Advertisement Act which governs advertising for vitamins and dietary

supplements in Malaysia requires that all advertisements for vitamins and dietary

supplements are to be registered with the Medicines and Advertisement Board; also, an

approved advertisement will have a Kementerian Kesihatan Lembaga Iklan Ubat (KKLIU)

approval number. Likewise, the Medicines (Advertisement and Sale) Act 1956 does not allow

any advertisements claiming cures of 20 diseases, including diabetes, hypertension, heart

disease, renal disease, cancer, drug addiction and AIDS. Therefore, manufacturers or

distributors are not allowed to make excessive or unsupported claims about treating serious

illnesses in the advertising of vitamins and dietary supplements. According to the Medical

Advertisement Board, advertising for vitamins and dietary supplements should only contain

sufficient and necessary information that can be used by the consumer to make an informed

choice.

Vitamins and dietary supplements with differences only in their packaging materials or pack

sizes are allowed to be registered in a single application for product registration.

Malaysia has mandatory labelling requirements for dietary supplements and traditional

medicines, which include the need to state the names and locations of manufacturers or the

agents responsible for the manufacture. These requirements are for the purpose of possible

product recall, as well as for the purpose of monitoring safety. All registered products for

distribution and sale in Malaysia must also carry the Malay language words dilulus oleh

Kementerian Kesihatan or dilulus oleh KKM on the immediate label, which means

recognised by the Ministry of Health. This facilitates consumers in identifying which products

are registered with Malaysias DCA. Besides that, registration holders are also encouraged to

print the DCA holographic logo on the label for easier identification.



Vitamins and dietary supplements, being categorised as OTC, traditional medicines as well as

health and food supplements, may be sold by non-professional outlets such as supermarkets,

convenience stores, petrol forecourts and Chinese medical halls, to the general public. Direct

selling is the largest distribution channel of vitamins and dietary supplements in Malaysia.

Self-medication/self-care and Preventative Medicine

Awareness of self-medication has been rising constantly in Malaysia. For minor illnesses like

flu, fever and sore throats, most people know how to treat themselves with OTC medicines

thanks to the strong educational efforts and high advertising activities by industry players.

Besides, vitamins and dietary supplements continued to gain popularity in 2013 as more

people consume them for preventative purposes. As consumers lead busier and more stressful

lifestyles, they have less time to take proper care of their daily meals. Thus, they consume

vitamins and dietary supplements to ensure their bodies get the necessary nutrition to protect

them from sickness.

Switches

No switches were found in 2011-2013 as existing players had already established a strong

presence during the review period, giving Rx players little incentive to switch to OTC status and

vice versa.

SOURCES Sources used during research include the following:

Summary 5 Research Sources

Official Sources Ministry of Domestic Trade & Consumer Affairs

Ministry of Health Malaysia

National Pharmaceutical Control Bureau

portal.bpfk.gov.my

www.pharmacy.gov.my

Trade Associations Direct Selling Association of Malaysia

Malaysian Medical Association

Malaysian Organisation of Pharmaceutical Industries

Malaysian Organisation of Pharmaceutical Industries (MOPI)

Malaysian Pharmaceutical Society

National Pharmaceutical Control Bureau NPCB

Nutrition Society of Malaysia

Pharmaceutical Association of Malaysia

Pharmaceutical Services Division of the Malaysian Ministry of Health

World Self-Medication Industry (WSMI)



Trade Press Bernama

Business Times

Edge Daily, The

Ezyhealth

Health Today

HealthToday

Marketing & Brand Equity

New Straits Times

News Straits Times

Retail World Asia

Star, The

Utusan Express

Source: Euromonitor International

ch14 my herbal traditional

Documents

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p r o d u c t s i n

malaysia category analysis

value growth