Four crucial consumer factors driving South East Asia's supplements boom

Rising spending power is just one factor driving rising supplements sales in South East Asia. ©iStock

Supplement firms who view South East Asia as one homogenous market are doomed to failure, but there are four key consumer trends common to all markets, according to analysts.

growing middle class spending power, changing demographics, increased awareness for health and wellness, and better access to products via multiple channels are driving growth, said Manas Tamotia, a partner at LEK Consulting.

On average, supplement sales in South East Asia are rising between five and 10% per year in most markets.

“I think it is an accepted fact that South East Asia has one of the fastest middle-class growth anywhere in the world,” said Tamotia.

Today there are 18million middle class households in Indonesia, for example. And every year, you add about 11% households to the middle class.”

South East Asian countries are also experiencing high GDP growth, with Vietnam, Indonesia, and the Philippines forecast to account for 14-15% of the global middle class by 2030, according to data Tamotia presented at the recent HI South East Asia conference.

“The lower income classes spend less on vitamins and supplements than middle income. So there is that substantial jump [in supplements purchase] as more become middle class.”

Next, the demographics are shifting, and this is creating growing demand for different supplement types, ranging from cognitive improvement to women’s health.

Asia is not homogenous. Singapore and Thailand are part of economies with older populations on average, along with Japan, Australia, New Zealand, and China, Tamotia said.

Indeed, his findings showed that Thailand has more older people as a percentage of the total population than China.

On the other hand, Vietnam, Malaysia, Indonesia, and the Philippines belong to economies with younger populations.

“In older countries you expect more demand for supplements for brain and joint health, while in younger countries, you will expect supplements for women’s health and paediatric products to grow,” Tamotia added.

Health impact

Increasing awareness for health and wellness across South East Asia, is the third driver.

“In a survey across the region, it was revealed that a lot of people think that their lifestyle is having a negative impact on their health. Nearly 90% realised they need to make nutrition choices.” Tamotia said.

“And this would relate to more purchase of fortified foods or health supplements.”

Lastly, multiple distribution channels are making it easy for consumers to have access to health supplements.

Most health supplements in the region are sold through pharmacies and drug store channels, but e-commerce, direct selling and supermarket sales are gathering pace. 

But while these four factors continue to drive growth, Tamotia said companies also needed to take note of a crucial fact about the South East Asia market in order to find success.

They need to remember that each country in the region is different.

“While there are those who consider South East Asia as a large market with 650million people, unfortunately, it is not,” Tamotia said.

Tamotia said each country has different customer needs, standards, government regulations plus long and complex supply chains.

“Companies cannot develop and market products in South East Asia as one unit, they have to do it per country,” Tamotia concluded.

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