Paul Altaffer & Grant Washington-Smith03.01.11
As U.S. manufacturers continue to look to better their business performance and seek improved revenues in 2011, one commonly accepted method is to examine new markets. As part of a new series of articles, “From the Corners of the World” will address some of the unique market and business opportunities presented by the countries of Southeast Asia.
Southeast Asia is home to some of the fastest growing economies in the world. The countries that make up this economic zone, which is often referred to as the ASEAN bloc, include Burma, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam. Lately, when companies undertake their market analysis of the broader Asian market, the focus often falls on China, Japan, Korea and Taiwan. However, the growth of the ASEAN bloc countries is expected to be second only to China in market growth in the coming years.
Oh Singapore!
Singapore represents a very attractive option for companies interested in entering the Asian market, but also looking to avoid some of the major complications associated with entering very large and culturally diverse regions. While Singapore is one of the smallest Asian countries, with a population of 5 million, it is among the most affluent—with a per capita GDP (PPP) of $57,238. It is also the most “Westernized” of all the Asian markets. And, more than 60% of Singapore’s population is classified as middle income or upper income.
At the same time, the Singaporean Government continues to stimulate population growth through inward migration and encouraging more local births. The latest government projections indicate that the population could grow to between 6 million and 6.5 million during the next 20 years. Accordingly, it is forecasted that by 2030 19% of Singapore’s population will be over the age of 65, compared to the current 7%. The effects of aging are going to strain health resources, which is why current government-sponsored awareness efforts are directed at general health and wellness.
The Health Concerns of Singaporeans
Swiss-born Adrian Jacklowsky is the managing director of Singapore-based ORAC Life Sciences International, LLP. Prior to establishing his own company, he was director of marketing, Asia Pacific, at DSM Nutritional Products. He has been working in Asia since the Asian crisis in early 1998, building businesses for Roche and DSM in the areas of nutrition, personal care and supplement ingredients.
Mr. Jacklowsky now consults to the global nutraceuticals industry on market development in Southeast Asia. He was kind enough to provide some of his insights on Singapore’s nutraceutical market for this column.
Rising awareness of health concerns and increasingly health-conscious consumers are driving growth in the Singaporean market, according to Mr. Jacklowsky. “Even in the recession of 2009, nutritional supplements managed to sustain positive growth, with consumers wanting to remain healthy,” he said. “It was believed that this was driven by employees such as office-workers, fearing for their jobs and not wanting to apply for leave when ill.”
Mr. Jacklowsky believes that combination supplements (as opposed to single ingredient products) continue to capture the largest proportion of the market, at 60% share. Marketed mostly as condition-specific products, consumers value combination formulas because they address a condition with a single dose, rather than having to buy separate bottles of individual ingredient products.
One ingredient that has bucked the trend of combination formulas is glucosamine. As a retail product, glucosamine has been demonstrating rapid growth and capturing significant market share. This is due to the rising awareness from Singapore’s aging population—a market within which the number of consumers suffering from joint pain has been increasing. In addition, the culture of Singapore consumers is that prevention is better than cure, so many aging consumers have started taking glucosamine as a preventative measure.
While concerns over the H1N1 flu virus have declined during the past year, Mr. Jacklowsky believes that this global pandemic left a lasting impression because it increased the interest in immune-boosting supplements among consumers. Moreover, he suggested that this increase has boosted awareness of the overall benefits of consuming nutritional supplements.
Beauty, Child Development & Other Trends
Another category growing nicely in Singapore is beauty supplements, including those either containing collagen for improved skin tone and elasticity or formulas specifically for skin lightening. Mr. Jacklowsky believes the unique blending of Eastern and Western culture in Singapore is a major reason behind the success of these products, especially because consumers think they can become more beautiful from the inside out.
Tonics and bottled nutritive drinks grew by 6% in value in 2009 compared to 2008, largely as a result of the growing popularity of collagen drinks from companies such as Nature’s Farm Pte Ltd. Eu Yan Sang (S) Pte Ltd also launched Floral Tea Bird’s Nest with rose or chamomile extract, which is also supposed to aid consumers’ mental health and provide beauty benefits.
Learning and education is a huge cultural focus in Singapore, which is a major reason why child-specific nutritional supplements containing ingredients such as DHA are important to parents. Singapore is known for having a competitive education system, prompting parents to do whatever it takes to improve the academic performance of their children.
In order to tap into this growing trend, Bayer (Southeast Asia) Pte Ltd has had great success with Nature’s Way Einstein Junior, which launched in August 2009. This product contains fish oil to aid a child’s brain development. The company ran numerous television advertisements to inform consumers of its launch—and the efforts have paid off.
Prospects for Singapore’s Nutraceuticals Market
Awareness and education will continue to fuel the interest in and consumption of condition-specific products such as joint, bone and heart health formulas. Consumers will also look for products that can address more than one condition. One example is CoQ10, which is typically taken to support normal cardiac function, but might also be used for increased energy or healthy gums and skin.
While the outlook across condition-specific supplements looks good, nutritional supplements that are expected to experience slower growth during the next five years (compared to the past five years) include the mature product categories and single ingredient formula products, such as echinacea, garlic and mineral supplements. Growth opportunities during the next five years all appear to be driven by specific health concerns associated with aging.
Mr. Jacklowsky also sees plenty of room for the growth of superfruit products, both as supplements and functional beverages, and cites General Nutrition Centers Inc’s Resveratrox as one example of a market success. This product has been met with consumer acceptance and strong sales. In fact, antioxidant benefits boosting overall health and wellness seem to have resonated very well with retail consumers.
Stay Tuned!
The next column in this series will focus on the regulatory requirements for companies seeking to export to Singapore. We will also examine the retail channel and distribution considerations in this market.
Southeast Asia is home to some of the fastest growing economies in the world. The countries that make up this economic zone, which is often referred to as the ASEAN bloc, include Burma, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam. Lately, when companies undertake their market analysis of the broader Asian market, the focus often falls on China, Japan, Korea and Taiwan. However, the growth of the ASEAN bloc countries is expected to be second only to China in market growth in the coming years.
Oh Singapore!
Singapore represents a very attractive option for companies interested in entering the Asian market, but also looking to avoid some of the major complications associated with entering very large and culturally diverse regions. While Singapore is one of the smallest Asian countries, with a population of 5 million, it is among the most affluent—with a per capita GDP (PPP) of $57,238. It is also the most “Westernized” of all the Asian markets. And, more than 60% of Singapore’s population is classified as middle income or upper income.
At the same time, the Singaporean Government continues to stimulate population growth through inward migration and encouraging more local births. The latest government projections indicate that the population could grow to between 6 million and 6.5 million during the next 20 years. Accordingly, it is forecasted that by 2030 19% of Singapore’s population will be over the age of 65, compared to the current 7%. The effects of aging are going to strain health resources, which is why current government-sponsored awareness efforts are directed at general health and wellness.
The Health Concerns of Singaporeans
Swiss-born Adrian Jacklowsky is the managing director of Singapore-based ORAC Life Sciences International, LLP. Prior to establishing his own company, he was director of marketing, Asia Pacific, at DSM Nutritional Products. He has been working in Asia since the Asian crisis in early 1998, building businesses for Roche and DSM in the areas of nutrition, personal care and supplement ingredients.
Mr. Jacklowsky now consults to the global nutraceuticals industry on market development in Southeast Asia. He was kind enough to provide some of his insights on Singapore’s nutraceutical market for this column.
Rising awareness of health concerns and increasingly health-conscious consumers are driving growth in the Singaporean market, according to Mr. Jacklowsky. “Even in the recession of 2009, nutritional supplements managed to sustain positive growth, with consumers wanting to remain healthy,” he said. “It was believed that this was driven by employees such as office-workers, fearing for their jobs and not wanting to apply for leave when ill.”
Mr. Jacklowsky believes that combination supplements (as opposed to single ingredient products) continue to capture the largest proportion of the market, at 60% share. Marketed mostly as condition-specific products, consumers value combination formulas because they address a condition with a single dose, rather than having to buy separate bottles of individual ingredient products.
One ingredient that has bucked the trend of combination formulas is glucosamine. As a retail product, glucosamine has been demonstrating rapid growth and capturing significant market share. This is due to the rising awareness from Singapore’s aging population—a market within which the number of consumers suffering from joint pain has been increasing. In addition, the culture of Singapore consumers is that prevention is better than cure, so many aging consumers have started taking glucosamine as a preventative measure.
While concerns over the H1N1 flu virus have declined during the past year, Mr. Jacklowsky believes that this global pandemic left a lasting impression because it increased the interest in immune-boosting supplements among consumers. Moreover, he suggested that this increase has boosted awareness of the overall benefits of consuming nutritional supplements.
Beauty, Child Development & Other Trends
Another category growing nicely in Singapore is beauty supplements, including those either containing collagen for improved skin tone and elasticity or formulas specifically for skin lightening. Mr. Jacklowsky believes the unique blending of Eastern and Western culture in Singapore is a major reason behind the success of these products, especially because consumers think they can become more beautiful from the inside out.
Tonics and bottled nutritive drinks grew by 6% in value in 2009 compared to 2008, largely as a result of the growing popularity of collagen drinks from companies such as Nature’s Farm Pte Ltd. Eu Yan Sang (S) Pte Ltd also launched Floral Tea Bird’s Nest with rose or chamomile extract, which is also supposed to aid consumers’ mental health and provide beauty benefits.
Learning and education is a huge cultural focus in Singapore, which is a major reason why child-specific nutritional supplements containing ingredients such as DHA are important to parents. Singapore is known for having a competitive education system, prompting parents to do whatever it takes to improve the academic performance of their children.
In order to tap into this growing trend, Bayer (Southeast Asia) Pte Ltd has had great success with Nature’s Way Einstein Junior, which launched in August 2009. This product contains fish oil to aid a child’s brain development. The company ran numerous television advertisements to inform consumers of its launch—and the efforts have paid off.
Prospects for Singapore’s Nutraceuticals Market
Awareness and education will continue to fuel the interest in and consumption of condition-specific products such as joint, bone and heart health formulas. Consumers will also look for products that can address more than one condition. One example is CoQ10, which is typically taken to support normal cardiac function, but might also be used for increased energy or healthy gums and skin.
While the outlook across condition-specific supplements looks good, nutritional supplements that are expected to experience slower growth during the next five years (compared to the past five years) include the mature product categories and single ingredient formula products, such as echinacea, garlic and mineral supplements. Growth opportunities during the next five years all appear to be driven by specific health concerns associated with aging.
Mr. Jacklowsky also sees plenty of room for the growth of superfruit products, both as supplements and functional beverages, and cites General Nutrition Centers Inc’s Resveratrox as one example of a market success. This product has been met with consumer acceptance and strong sales. In fact, antioxidant benefits boosting overall health and wellness seem to have resonated very well with retail consumers.
Stay Tuned!
The next column in this series will focus on the regulatory requirements for companies seeking to export to Singapore. We will also examine the retail channel and distribution considerations in this market.
