Valued at close to $10 billion1, the health supplement product market in Southeast Asia has been booming thanks to the global trends of rising concern for health and wellness. And with online shopping booming in Southeast Asia, there is ample opportunity for health supplement brands beyond outside the region to enter the market with cross-border eCommerce deliveries.
According to McKinsey, two of the key factors contributing to this global phenomenon2 lie in increasing consumer awareness of preventative healthcare, and the rise of the self-directed consumer. Southeast Asia has clearly been swept up by the same phenomenon, seeing double-digit growth rates in the health supplement market in recent years.
In a new paradigm that Oliver Wyman calls the ‘proactive consumer’3, it has again been recognised that consumers are increasingly willing to self-diagnose, self-medicate and self-monitor, facilitating the rise of health supplements and even alternatives to prescription drugs and over-the-counter medicines.
As the marketing of healthy products evolve beyond general claims towards more personalised, quantifiable and targeted clinical claims, consumers are sold by the idea of consuming health supplements for purposes such as weight loss, improved memory, or reducing carcinogens.
With a rapidly growing Southeast Asian eCommerce industry fuelled by the demand of 120 million online shoppers throughout the region4, entering the health supplements market in Southeast Asia from abroad has never been easier.
Among popular Indonesian eCommerce platforms5 alone, certain websites like Tokopedia can receive up to 65 million monthly visits, while other platforms such as Shopee, Bukalapak and Lazada are trailing not far behind with tens of millions of views each month. Take into consideration website visits from the other Southeast Asian consumers, and you would find that the eCommerce boom in this region provides you with a market full of opportunities to take on.
To better understand your potential customers, let’s first look at how Southeast Asian consumers perceive health supplements and how their lifestyle choices drive them towards purchasing health supplements.
How do Southeast Asian consumers perceive health supplements?
Health supplements in Southeast Asia are perceived to be increasingly important to maintain a balanced diet and lifestyle, where consumers believe that they can make up for a lack of a certain vitamin or food by consuming health supplements. Many also use health supplements for beauty purposes, such as for skincare, hair strengthening, and fat burning in countries like Malaysia6 and Vietnam.7
In Indonesia, the health supplements market has recorded strong growth8 due to consumers changing their habits and having increasing awareness of preventive health measures. This is especially so among the middle-class that is expected to grow from just 37.7 per cent in 2003 to almost 50 per cent in 2020, and whose purchasing power is also expanding. This has spurred substantial demand for a myriad of health food supplements, creating opportunities for both local and international manufacturers to enter the health supplement sector in Indonesia.
Similarly, prospects for the dietary supplements market in Thailand look good from 2015 to 20309, growing at an average of 7 per cent per year due to rising incomes, health and wellness trends and modern retail channels.
In the Philippines, its stable economy has also been contributing to the increasing capability and desire10 of Filipino consumers to improve both their mental and physical health through supplements. An increasing number of middle and high income consumers can provide opportunities for companies to grow as different income groups tend to purchase different types of products.
With rising disposable income, a larger proportion of consumers in developing countries are able to go beyond putting bread on the table to purchasing health supplements to boost their wellbeing. This growing belief in the benefits of health supplements therefore makes Southeast Asia a lucrative market to enter.
What are some consumers’ habits/lifestyle choices that drive them to purchase health supplements?
Across the region, the various consumer populations have different motivations for purchasing health supplements.
To begin with, more people in Singapore are popping health supplement pills as a quick fix11 when facing the pressures of a busy lifestyle. According to Ms Yvonne Wong, a research analyst at Euromonitor International, many Singaporeans do not have time to stay physically active, and often indulge in meals that are unbalanced in terms of nutrition.
Pharmacy chains in Singapore say that demand for vitamins and supplements has grown over the past five years, with popular products including probiotics for the gut and fish oil, which is said to be good for the heart and brain. As Singaporeans are known to be devoted to work, their desire for these products could suggest that they are inclined towards supplements that not only enhance their wellbeing, but also improve their mental performance.
On the other hand, Malaysia is ranked as the top country within Southeast Asia for both obesity and diabetes.12 Obesity and diabetes have been connected to serious Non-Communicable Diseases (NCDs) such as heart disease and hypertension. Therefore, consumers in Malaysia are increasingly aware of such potential health issues associated with eating habits and have become more proactive in searching for consumer health products to prevent such chronic diseases like diabetes and hypertension.
Some consumers in countries like the Philippines are also motivated to take health supplements to boost their gains from working out at the gym.10 In this case, they are interested in purchasing health supplements like whey protein powders and amino-acid protein powders at premium prices.
As locals in the Philippines are concerned about the way they look, there has been an increase in the total number of gym-goers across the country. This trend is expected to continue in future as well, thereby positively impacting the sale of health supplements in the Philippines.
Before entering the market of your choice, it would be good to find out what is the motivation behind your consumers wanting to purchase health supplements. That way, you can understand what they are looking for and how you can market your product to appeal most to them.
To better understand the current state of the health supplement market in Southeast Asia, let’s look at product trends in the market.
Product Trends in the Health Supplement Market
As different age groups are known to face different types of health issues, consumers purchase health supplements to target these problems.
In Singapore, customers these days tend to go to stores "with a lot of existing knowledge and research"11, according to Ms Sarah Boyd, chief executive of Guardian Health & Beauty in Singapore and Cambodia. Parents tend to buy probiotics as well as brain and immunity-boosting supplements for their children.
In comparison, working adults typically spend on both immunity and energy boosters, while seniors buy supplements such as glucosamine for joints or eye care products.
This means that when marketing your product, targeting specific age groups can help these consumers better understand the usefulness of your product compared to a more general product meant for all age groups.
Within Southeast Asia, a considerable amount of people have preferences for herbal products rather than standard products, although this varies across the region.
In Vietnam, herbal, traditional and curing supplement products account for more than 70%2 of the market. It has been suggested that herbal supplements in health supplements segment will continue to dominate the market. This is because consumers believe that herbal or traditional products have fewer or no side effects13 in comparison with standard products constituting natural ingredients. Ginseng was the most popular herbal dietary supplement used in Vietnam.
Similarly, according to Euromonitor, 58.7% of the market share in Thailand belongs to the herbal product segment, which is slightly more than half of the total consumer base.
On the other hand, in countries like Malaysia, Singapore, Indonesia and the Philippines, herbal products constitute a lower percentage of market share compared to standard products. According to Euromonitor, herbal health supplements only take up 37% of market share in Malaysia, 41% in Singapore, 25% in Indonesia, and a mere 14% in the Philippines.
As countries in Southeast Asia vary in terms of their preference for herbal or standard products, it is important to note which countries have a larger proportion of market share belonging to herbal or standard health supplements so that you know what your consumers are looking for.
In Southeast Asia, foreign health supplement brands constitute a large percentage of the entire market. For instance, according to the US Department of Commerce, health supplement brands from the US, Europe, Australia and Japan are highly sought after in Singapore. 24% of the total imports for the health supplement market in Singapore in 2015 was from USA alone, with big names such as GNC and Centrum being identified as the most popular brands.
As another example, Blackmores, Australia’s leading natural healthcare company, has been active in Southeast Asia for more than 40 years1, making them a popular brand in a number of markets including Thailand, Malaysia, and Singapore. Although Blackmores had initially built its growth around China14, it has shifted some of its focus to Indonesia and saw sales rise 72 per cent in the first half of 2019.
With an 86-year old history of healthcare based on naturopathic principles, Blackmores is based on a variety of natural therapies and techniques. There are strong similarities between naturopathy and traditional medicine practiced throughout Asia with the principles of “prevention rather than cure”, which has certainly helped Blackmores appeal to the Southeast Asian consumer base.
In Vietnam, foreign brands tend to be positioned in the premium segment5 to attract mid-high end consumers, while local brands generally concentrate on the mass market. In addition, foreign players are also more active in non-herbal/traditional dietary supplements, while local players are more prominent in herbal/traditional/curing products. Imported products account for 40% of the market share- which is a good sign that locals are open to foreign brands.
Now that we’ve seen several successful products in the market, let’s find out how you can also leverage on the growing economy of Southeast Asia to sell your health supplement products.
Tapping into the Potential of the Health Supplement Market in SEA
Popularity of eCommerce and non-store retailing
Research from GlobalWebIndex15 shows that Southeast Asian countries have some of the highest levels of eCommerce adoption in the world, with Indonesian internet users reporting the highest rates of active online shopping of any nation in the company’s 46-country survey.
GlobalWebIndex reports that more than 9 in 10 Indonesian internet users16 between the ages of 16 and 64 now make online purchases each month, compared to a global average of 75 percent. Thailand, Malaysia, and Vietnam are all ahead of the global average too. The Philippines matches the global average at 75 percent, but Singapore comes in just below that average in GlobalWebIndex’s latest round of data, at 73 percent.
In the 12 months to the end of June 2019, the number of people in Southeast Asia who made online purchases grew by 17 percent, equating to tens of millions of new eCommerce shoppers across the region.
According to a Euromonitor report called Vitamins and Dietary Supplements in Asia Pacific, a sizeable proportion of all health supplement purchases were made from non-store retailing channels, such as eCommerce platforms. In most countries across Southeast Asia, the amount of purchases made from non-store retailing hovered around 20-30% from 2013 to 2018, with countries like Malaysia even reaching about 50%.
With eCommerce growing so rapidly in Southeast Asia, it would be useful to tap into the consumer base of popular local eCommerce platforms such as JD.ID and Blibli to start selling your health supplement products.17 These platforms frequently hold large-scale promotional shopping festivals and are a good place to gain a foothold in the market.
Find out how Janio helps an eCommerce merchant ship his Australian Health Supplement products smoothly into Indonesia with our case study.
Halal health supplements
Another huge opportunity when entering the Southeast Asian market is to cater to the large population of Muslim consumers in the region, particularly in Indonesia, Malaysia and Singapore. This can be done by supplying halal or vegetarian health supplements in these markets in addition to targeting the health concerns they may have.
For instance, in Malaysia where a common health issue is diabetes, cholesterol lowering products and cardiovascular preventives that are also beneficial to diabetics6 would be well received by the marketplace. Pair these with a halal or vegetarian certification to appeal to an even wider proportion of the population.
Additionally, in September 201418, Indonesia passed its Halal Product Certification Bill which requires all products sold in the country to be halal-certified by 2019. This means that if you’re intending to cater to the consumers in Indonesia, your products would have to be halal-certified by law.
While this may seem like a barrier to entry, being able to reach out to the masses can help you to position yourself as a strong competitor in the market.
Opportunities for newer brands
According to Oliver Wyman, many opportunities still stand for newer brands to enter3 the Southeast Asian health supplement industry. In established markets like Singapore, demand for foreign goods such as Japanese and Korean products are continuously on the rise. Even though Singapore may have slower growth compared to other countries, there is still significant consumer spending on health supplement products that can benefit your business.
In emerging economies like the Philippines and Vietnam, there is a rise of digitally active consumers who purchase a mix of Western remedies as well as traditional ones. While there may be potentially large markets in these countries, there is also a slower consumer uptake. However, as the population grows to become more aware of health concerns, prospects remain bright in these economies.
Finally, of all of Southeast Asia, Indonesia provides one of the most optimistic near-term growth opportunities for health supplement merchants. There has been increasing demand for premium health supplement products, both imported and domestic. Growth of online sales can help to incubate new products, as Indonesia still has relatively low barriers to entry for this market.
Before you start delivering the products to your customers, be sure to find out the import requirements for health supplements in that country. ASEAN also has its own guidelines for labelling requirements for health supplements, some of which include declaring the complete name and address of the manufacturer, marketing authorisation holder and importer of the product.
You will also be required to declare the name and quantity of plants or animals from which the active ingredient is derived. According to the ASEAN Guidelines, label information should be English and/or official/national language(s) subject to the regulation of each Member State and be written clearly and easy to understand.
To find out more about individual countries’ import requirements, you can visit each country’s official import websites or ask your logistics service provider (LSP) who would be aware of the latest updates. As customs clearance is a crucial part of any business-to-consumer delivery, it would definitely help to work with an LSP who’s experienced in clearing Southeast Asian customs.
As a whole, the health supplement market in Southeast Asia appears to have a positive outlook for the upcoming years with increasing consumer awareness of preventative healthcare, and the rise of the self-directed consumer. Once you are able to understand what kind of health supplement products the consumers want, be sure to meet the requirements set by their government to not get into any trouble with the law.
The eCommerce growth in the region also provides a significant amount of opportunities for newer brands to enter the market, as you no longer need to build your website and gain traffic from scratch with eCommerce platforms doing the job for you. All you would have to do now is to list your products on these platforms, and millions of people will have access to your viewing your products.
Entering the Southeast Asian market has never been easier with experienced logistics service providers within your reach. With rising affluence and a growing population, Southeast Asia remains an attractive region for you to expand your presence in the health supplement market through eCommerce and international shipping.
If you'd like to find out more about how we can solve your SEA eCommerce cross-border delivery needs, come and have a conversation with us.
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- Asia Society: Asia’s Health and Wellness Revolution Can Change Its Future
- McKinsey: Cashing In On The Booming Market for Dietary Supplements
- Oliver Wyman: Unlocking The Asia Pacific Consumer Health Opportunity
- Think With Google: E-conomy SEA 2018: Southeast Asia's Internet Economy Hits An Inflection Point
- IPrice: The Map of E-commerce in Indonesia
- International Trade Association: Malaysia Commercial Guide
- Frank Morgan: Dietary Supplements in Vietnam
- Cekindo: Overview of Food Supplements in Malaysia
- The Nation Thailand: Thailand’s Ageing Society Expected to Affect Supplements Market
- PR Newswire: Philippines Nutraceuticals Market is Expected to Reach PHP 261 Billion in Terms of Revenues by 2022: Ken Research
- Straits Times: More in Singapore popping vitamins, supplements
- International Trade Association: Malaysia Commercial Guide
- Vietnam Insider: Vietnam Nutraceuticals Market Outlook to 2022
- Financial Review: Consumption king for Indonesia's new middle class
- Global Web Index
- DataReportal: Digital 2019 Spotlight: Ecommerce In Southeast Asia
- JD: Australian Gallery
- Mintel: Beauty Opportunities in Southeast Asia