11 February 2021 - Deborah Wilkes
The global OTC market grew by 2.3% to USD130 billion at manufacturers’ selling prices in the 12 months ending 30 September 2020, according to the latest figures from IQVIA Consumer Health.
Amit Shukla – global head, consulting services and thought leadership at IQVIA Consumer Health – tells OTCToolbox there were “signs of recovery” in the third quarter of 2020 when the global OTC market rose by 1.5% compared to the same period a year earlier.
The 1.5% rise followed a “very steep decline” of 6.4% in the second quarter of the year when the COVID-19 pandemic was at its peak. In the first quarter, panic-buying by consumers pushed sales up by 10.9%.
IQVIA Consumer Health expects sales in the fourth quarter of 2020 to be “slightly more positive than in the third quarter”. The market researcher points out that several countries relaxed lockdowns but several others struggled to manage the crisis.
For the whole of 2020, IQVIA Consumer Health forecasts growth of between 2.9% and 3.2%. This is significantly lower than the 4.1% growth that had been forecasted before the COVID-19 pandemic.
The market researcher says this will be a “healthy performance considering the challenges with COVID-19, particularly the suppression of demand due to social distancing, lockdowns and other constraints on patients, consumers and shoppers”.
Prospects for 2021
Commenting on the prospects for 2021, IQVIA Consumer Health forecasts that the global OTC market will grow by more than 4%. “There will be variations from one quarter to another,” notes the market researcher, “with stronger growth expected during the second half of the year.”
IQVIA Consumer Health’s forecast assumes that at least six vaccines will be available globally, and at least 50% of the susceptible target groups across developed markets will be vaccinated by June 2021.
Impact around the world
Looking at the performance by geographic region, IQVIA Consumer Health says this closely tracked the impact of the COVID-19 pandemic.
Latin America and North America, for example, recorded growth of 12.2% and 5.6% respectively in the 12 months ending 30 September 2020. IQVIA Consumer Health notes that both of these regions had fewer restrictions on movement and life than some other parts of the world.
Western Europe, where there were more restrictions, recorded growth of 3.2%, while the Asia-Pacific region excluding China recorded growth of 3.0%.
IQVIA Consumer Health points out the performance was more encouraging in regions and markets where the e-commerce infrastructure was more mature and was already catering for the OTC industry.
Developing markets accounted for 49% of sales and 53% of sales growth. IQVIA Consumer Health says the share of sales growth for developing markets was negatively impacted by a decline in China but balanced by growth in Central and Eastern Europe, and Latin America.
Success factors for companies
Discussing the performance of companies, Shukla points out that none had prepared for such a dire situation and huge challenge. However, he adds that business continuity resilience in the face of the crisis was exemplary.
Two factors differentiated the winners from the also-rans, says Shukla, portfolio mix and e-commerce readiness.
IQVIA Consumer Health points out that only five of the top 10 global OTC players – GlaxoSmithKline, Bayer, Johnson & Johnson, Reckitt Benckiser and Procter & Gamble (P&G) – grew ahead of the global OTC market in the 12 months ended 30 September 2020 (see Figure 1 below).
The market researcher says the product portfolios of all five companies are skewed towards those categories that consumers were keen to purchase during the COVID-19 pandemic such as vitamins, minerals and supplements (VMS), skincare and hygiene.
P&G showed the strongest sales growth of 10.4% thanks to a rise of 62.7% by its VMS products.
The fastest-growing company in the top 20 was VMS specialist The Bountiful Company, previously known as The Nature’s Bounty Company.
IQVIA Consumer Health’s sales figures for the 12 months ended 30 September 2020 are taken from its Global OTC Insights publication. Growth figures use the latest exchange rate across all time periods, and local currency growth is aggregated into dollars.