Vitamins driving South Korean OTC market
helping to drive growth of the country's OTC market, two thirds of
which is made up of vitamins and dietary supplements.
Sales of OTC healthcare products in South Korea amounted to US$1.1 billion (€0.91bn) in 2002, making it the Asia Pacific region's second most important national market after Japan, and ahead of China's OTC market value since 2001, according a recent report from Euromonitor.
Vitamins and dietary supplements accounted for two-thirds of OTC healthcare sales in 2002 and they remain the real growth engine of the market, according to the report.
Vitamins and supplements are either registered as quasi drugs or classified as food supplements, according to ingredients levels. Quasi drugs may be sold through non-pharmacy outlets, but in practice it seems that companies do not wish to compete with non-quasi brands. Registration and administration of food supplements is lenient, but will change with the introduction of the Functional Health Food Law in August 2003.
Vitamins and other supplements are heavily promoted by chemists in South Korea, for general wellbeing as well as specific ailments. Mixed dietary supplements and tonics are the most popular products; aloe, chitosan, calcium and fish oils are also particularly popular.
The leading supplement companies are multi-level marketing firms, or at least those with direct selling operations, making network marketing a key factor in the success of the supplement industry in South Korea.
The country's OTC market is however extremely fragmented, notes Euromonitor, with the top 10 players holding a combined value share of almost 30 per cent in 2002. The leading players are predominantly supplement players, with domestic manufacturers dominating the market.
OTC growth is expected to continue in line with steady economic growth. Since 2000 much of the focus has been on the prescription market but deregulation of distribution will expand product availability and improve access to products for self-medication.
The analysts warn however that increased attention on OTC products may result in greater competition in a bid to win market share, rather than real market expansion. The coming years will see a widening of the gap between the major and minor players, as brand recognition, marketing muscle and product innovation will be key factors for survival in an increasingly competitive marketplace.
