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OTC:- Global, Regional & Local Trends and Key Imperatives
Anthony Morton-Small, Senior Principal, IMS Health TSMIA – Bangkok May 2015
IMS Taiwan OTC Forum Presentation May 2015 2
AGENDA
• Global OTC Market Context
• APAC & Thailand OTC Insights
• OTC Key Imperatives
IMS Taiwan OTC Forum Presentation May 2015 3
Global OTC is seeing a shift of focus towards health & wellness that has led to new transversal market segments.
Blurring the boundaries (or broadening the scope!) and attracting new competitors
Pharma-ceuticals
Nutrition Personal
Care
Nutraceuticals Cosmeceuticals
Nutricosmetics
Topically applied Vitamins, herbs, various oils, and botanical extracts typically added May not claim drug-like or therapeutic effects
Provides medical or health benefits, including the prevention and/or treatment of a disease Typically sold in the medicinal form of capsule, tablet, powder, solution Sometimes associated with functional foods
Ingestible. Containing ingredients such as botanical actives, enzymes, proteins, and vitamins. Marketed specifically as beauty aids
As OTC becomes increasingly attractive, industry players become more diverse.
Consumer packaged goods
• Payer and generic pressure driving diversification
• Rx to OTC asset leverage • Broader patient/consumer healthcare coverage
Pharma moving into consumer health
CPG moving into consumer health
Pure play consumer health
• Higher consumer health margin and prices
• Leverage consumer and trade marketing muscle
• Lower private label competition
• Leverage sales and marketing capabilities
• Economies of scale in supply chain
• Leverage consumer understanding
Pharma Consumer
Health FMCG/CPG
4 IMS Taiwan OTC Forum Presentation May 2015
Global
IMS Taiwan OTC Forum Presentation May 2015 5
Global
At $110bn, OTC continues to show healthy growth while Pharma growth improves.
Source: IMS OTC audits plus estimates
8.8
7.16.5 6.6
5.2
5.95.4
4.9
3.32.7
8.2
4.3
6.2
4.5
6.2 6.0
8.0
6.47.0
4.6
6.5
5.0
10.2% 10.1% 9.9% 9.9% 9.9% 10.2% 10.3% 10.5% 10.6%11.0%
10.7%
0%
2%
4%
6%
8%
10%
12%
14%
16%
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Va
lue
Gro
wth
(%
)
Year on Year Value Growth & OTC Share of Total Pharma Data for MAT to Q3 2014
Pharma Growth (%) OTC Growth (%) OTC Share of Total Pharma (%)
Total Pharma = $ 1036 bn Total OTC = $ 110 bn
NB. Change in estimation methodology from 2014
IMS Taiwan OTC Forum Presentation May 2015 6
Global
Source: IMS OTC Global Analysis
Within APAC, the sub-regions of South Asia and China show the strongest growth.
GLOBAL
W EUROPE
N AMERICA
CEE
L AMERICA
CHINA
JAPAN
SE/N ASIA
SOUTH ASIA
AUSTRALASIA
-5
-2
1
4
7
10
13
16
-5 0 5 10 15 20
La
test
Ye
ar G
ro
wth
(%
)
3 Years Average Growth (%)
OTC Growth by Region: Short vs Long term
Global Latest Year Growth 4.5%
Global 3 Year Average Growth 4.5%
IMS Taiwan OTC Forum Presentation May 2015
7
Global
Source: IMS OTC Global Analysis
Base Value Change
Price Change
New Products
Line Extensions
Total Change
Base Value Change
Price Change
New Products
Line Extensions
Total Change
LATIN AMERICA
40
6
19
11
4
-1
-9
13
13
-19
125
20
35
1
69
53
9
24
20
-1
102
14
25
39
23
APAC exc JAPAN CEE
NORTH AMERICA WESTERN EUROPE GLOBAL
Elements of Growth by Region – 5 Year Cumulative Growth %
8
5
13
5
-15
APAC benefits from Base Sales growth, whilst developed markets must innovate to find growth.
IMS Taiwan OTC Forum Presentation May 2015 8
Global
Source: IMS OTC Global Analysis
Value Share Value Growth > Market Value Growth < Market
4.1%
3.9%
3.8%
3.7%
2.8%
2.4%
2.3%
2.2%
2.1%
1.6%
J&J
NOVARTIS
SANOFI
BAYER
PFIZER
PGT
GSK
RB
B.I.
TAKEDA
2.8%
6.6%
6.2%
1.7%
4.1%
-1.3%
-5.2%
5.1%
2.6%
7.1%
GLOBAL TOTAL OTC
+4.5%
Top 10 Corporations - Global OTC
Value Share & Latest Year Growth (%)
Novartis continues to see strong growth, while Sanofi, RB and Takeda grow ahead of the Global OTC Market.
IMS Taiwan OTC Forum Presentation May 2015 9
Global
Source: IMS OTC Global Analysis
Skincare includes Foot care Others is dominated by TCM, Eye Care, Habit & Anti-Varicose
Global OTC – Key Categories Value Share (%)
Value Growth (%)
CCR
22.3%
VMS & TONICS
18.3%
PAIN RELIEF
15.6%
DIGESTIVE
14.5%
SKINCARE
9.2%
OTHERS
20.0%
4.5%
2.0%
4.3%
6.2%
6.6%
5.1%
4.5%
TOTAL
MARKET
CCR
VMS &
TONICS
PAIN
RELIEF
DIGESTIVE
SKINCARE
OTHERS
Digestive, Pain Relief and Skin Care exceed market growth.
IMS Taiwan OTC Forum Presentation May 2015 10
AGENDA
• Global OTC Market Context
• APAC & Thailand OTC Insights
• Key Imperatives
IMS Taiwan OTC Forum Presentation May 2015 11
Source: IMS OTC Global Analysis
APAC
121
4539
28
25
1512
9 92 2
7
3%
-1%
3%
-2%
10%
11%
-6%
5%
3%
12%
8%
6%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
0
20
40
60
80
100
120
140
Ye
ar o
n Y
ea
r C
ha
ng
e (
%)
DO
LLA
RS
OTC EXPENDITURE per Capita ($) - APAC exc Japan & China Countries
The more developed markets, show the potential for growth in expenditure elsewhere in the region.
1. CHINA
2. JAPAN
3. INDIA
4. AUSTRALIA
5. SOUTH KOREA 6. INDONESIA
7. PHILIPPINES
8. PAKISTAN
9. MALAYSIA
10. TAIWAN
11. NEW ZEALAND
12. HONG KONG13. SINGAPORE
-10
-5
0
5
10
15
20
-10 -5 0 5 10 15 20
La
test
Ye
ar G
ro
wth
(%
)
3 Years Average Growth (%)
APAC Growth by Country: Long vs Short term
APAC Latest Year Growth 5.1%
APAC 3 Year Average Growth 4.3%
IMS Taiwan OTC Forum Presentation May 2015 12
Source: IMS OTC Global Analysis
APAC
China becomes bigger than Japan for the first time.
Average prices are rising in China, India and ASEAN but flat or declining elsewhere
IMS Taiwan OTC Forum Presentation May 2015 13
Source: IMS OTC Global Analysis
APAC
IMS Taiwan OTC Forum Presentation May 2015 14
APAC
APAC – Key Categories Value Share (%)
Value Growth (%)
Pain Relief fastest growing category, growing at 14% in China.
VMS & Tonics
25.7%
CCR
21.3%
All Others
18.8%
Pain Relief
12.5%
Digestive
12.2%
Skin
9.5%
5.1%
4.0%
5.4%
4.1%
8.8%
5.2%
5.0%
Total OTC
VMS & Tonics
CCR
All Others
Pain Relief
Digestive
Skin
IMS Taiwan OTC Forum Presentation May 2015 15
APAC
APAC OTC – Minor Categories Value Share (%)
Value Growth (%)
Other OTC growing just behind the market, with most minor categories performing behind Total OTC.
Eye Care
3.6%
Anti-
haemorrhoids0.7%
Habit
0.6%
Anti-varicose
0.4%
Antifungals
(Gyn)0.3%
Weight Loss
0.2%
Ear Care
0.1%
Other OTC
13.0%
5.1%
2.5%
2.5%
1.8%
14.5%
-3.9%
-3.5%
8.6%
4.7%
Total OTC
Eye Care
Anti-
haemorrhoids
Habit
Anti-varicose
Antifungals (Gyn)
Weight Loss
Ear Care
Other OTC
Across APAC, 5 of the Top10 corporations are MNCs and only Takeda grows faster than the market
IMS Taiwan OTC Forum Presentation May 2015 16
APAC
Value Share Value Growth > Market Value Growth < Market
4.5%
2.3%
2.2%
2.1%
1.9%
1.8%
1.7%
1.6%
1.4%
1.3%
TAISHO
DAIICHI SANKYO
TAKEDA
GSK
B.I.
J&J
PFIZER
ROHTO CORP
SATO SEIYAKU
SANOFI
0.6%
0.5%
8.0%
-4.5%
0.6%
1.8%
4.0%
-0.4%
-0.3%
-0.1%
Top 10 Corporations - OTC APAC
Value Share & Latest Year Growth (%)
Total OTC 5.1%
Among the western MNCs, RB has the highest growth rate amongst the top players
IMS Taiwan OTC Forum Presentation May 2015 17
Value Share Value Growth > Market Value Growth < Market
APAC
2.1%
1.9%
1.8%
1.7%
1.3%
1.3%
1.2%
0.9%
0.8%
0.6%
4. GSK
5. B.I.
6. J&J
7. PFIZER
10. SANOFI
13. BAYER
14. NOVARTIS
18. ABBOTT
22. RB
27. MERCK & CO
-4.5%
0.6%
1.8%
4.0%
-0.1%
6.7%
14.1%
6.7%
16.2%
7.8%
Top 10 MNC's - OTC APAC
Value Share & Latest Year Growth (%)
Total OTC 5.1%
IMS Taiwan OTC Forum Presentation May 2015 18
AGENDA
• Global OTC Market Context
• APAC OTC Insights
• Key Imperatives
OTC players are achieving success by: growing the base, focusing on innovation & optimising their Go To Market
IMS Taiwan OTC Forum Presentation May 2015 19
Grow the Base Innovation Go To Market
• Emerging markets
• Population, wealth & affordability growth
• Consumer awareness/ needs/behaviors
• Product Enhancements
• Companion technology/ services
• Rx to OTC switch
• Commercial models
• Distribution channels
• Stock rotation & merchandising
Source: Shopper Insights Study, IMS China, Philippines
Understanding & influencing consumer awareness, intentions and behaviors is critical to capturing/growing the base
• 70% don’t have specific brand plan
How important are Doctors/Pharmacy Staff recommendation on consumer buying OTC products?
• >60% shoppers are willing to ask a pharmacist for advice
• 97% of consumers have a brand in mind before entering the store
• 97% of clerks do not offer alternative
• What did the consumers actually buy?
• Who is the buyer?
• Were there other unplanned purchases?
20 IMS Taiwan OTC Forum Presentation May 2015
• Regulatory compliance requirements
• Information overload and lack of integration with other data sources
• KPI framework for digital tracking
• Upfront investment for new technology
• Change management for teams not familiar with digital approaches
Digital trends of social media and apps present new opportunities and challenges for marketers
• Identifiable, pro-active customers
• New individual customer data at real-time
• New channels in a marketing mix
• Potential to create tailored interactions
• Potential to optimize ROI of marketing activities in more channels
• What is the best way to engage with empowered, digitally savvy customers?
• How can we take advantage of the new touch points with these consumers?
• How can we be present and distinctive and monetize digital channels?
Opportunities
IMS Taiwan OTC Forum Presentation May 2015 21
Challenges
• How do we prevent information overload?
• How do we make sure that all data are effectively used by all teams?
• How do we ensure regulatory compliance in the digital space?
Switch has been an important source of new product innovation and a key driver of growth in OTC
The challenge remains to create new consumer categories via “innovative” switch, especially in Europe
• The path to switch is well established
• Strong focus on traditional OTC areas: Pain relief, Heartburn, Anti-allergy and Acid Relief
• Geo-expansion opportunities for major switched brands now limited
• EU Central Switch route has yet to be fully leveraged
8 of top 20 brands are switches, accounting for 6%
of OTC sales
W Europe
6 of top 10 brands are recent switches, accounting
for 9% of OTC sales
22 IMS Taiwan OTC Forum Presentation May 2015
Go to market models are being redefined along consumer centric lines driven by the self pay/self treat nature of EMs
IMS Taiwan OTC Forum Presentation May 2015 23
Intermediate
Influencer
Brand & Service
Intermediate are relevant external stakeholder with access to patients (i.e. physicians, pharmacists etc …)
Traditional Mindset Future Mindset
B2C
B2B
MCM (channels & messages)
Value prop.
Consumer Brand
Messages
Channels
Customers
Influencers
Patients
To win players are building capabilities in different directions according to corporate heritage & ethos
IMS Taiwan OTC Forum Presentation May 2015 24
Manufacturing Quality Efficiency
Product Design Research driven Consumer Need
Packaging Function Design
Technology Devices Mobile Apps
Innovation Clinically Proven New occasions /consumers
Advertising & Promotion
Restricted Highly Targeted
Distribution Limited Access Multi-channel Experience
Consumer Understanding
Need based Sensorial/ Emotional
Science-led Marketing-led
OTC companies are approaching consumer directly and increasing communications through social media
Still main customer for pharma companies is doctor & pharmacist, but many companies are trying to communicate with consumers through online & other media
25 IMS Taiwan OTC Forum Presentation May 2015
IMS Taiwan OTC Forum Presentation May 2015 26
Your Partner in Consumer Health
Thank you!
Anthony Morton-Small Senior Principal, Consumer Health Email : AMortonSmall@imscg.com Phone : + 65-8328-3867
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