Overview of the Malaysian health supplements market

As more people become convinced that dietary supplements can enhance their overall health and well-being, Malaysians are beginning to value consumer health items like vitamins. When it comes to health supplements, Malaysian customers are truly spoilt for choice, as evidenced by the abundance of options and the local availability of well-known brands like Nutrilite, Live-well, Blackmores, and VitaHealth. Producers of vitamin and dietary supplement brands have also utilized aggressive marketing tactics to increase the demand for health supplements. 

Market growth by product category

Throughout the past ten years, the Malaysian market for vitamins and nutritional supplements has expanded quickly; retail sales have more than doubled, rising from RM940.4m (USD248.3m) in 2005 to RM1.9b (USD572.6m) in 2014. This amounted to a compound annual growth rate (CAGR) of 7.0 percent over the previous ten years. After reaching RM1.7 billion (USD545.3 million) in 2013, retail sales of vitamins and nutritional supplements climbed 7.9 percent annually in 2014, somewhat above the 7.0 percent 10-year CAGR.

Among other product categories, tonics, and bottled nutritional drinks have become increasingly popular during the past ten years. These include the health and beauty beverages by NH Colla Plus and Kinohimitsu, which are especially well-liked by female customers, and BRAND’S ® Essence of Chicken.

Retail sales of tonics and bottled nutritional drinks totaled RM93.5 million in 2005. (US$24.7 million). By 2014, it is anticipated that retail sales of these products will have grown 3.6 times to RM333.0 million (USD102.8 million). Over ten years, this produced a CAGR of 13.5%, over double the industry average. In 2014, the yearly growth rate for tonics and nutritive drink bottles was 14.5 percent, up from RM290.8 million (USD92.2 million) in 2013.

Retail sales of conventional and non-herbal dietary supplements increased at the second-fastest rate in the past ten years, doubling from RM278.4 million (USD73.5 million) in 2005 to RM576.2 million (USD177.9 million) in 2014. This equated to a compound annual growth rate (CAGR) of 7.5 percent, marginally surpassing the industry CAGR during the same time frame.

Over the past ten years, retail sales of vitamins, dietary supplements, herbal/traditional supplements, and pediatric vitamins have grown at a slower rate of approximately 5.0 percent, falling short of the industry average of 7.0 percent.

Notably, probiotic supplements grew at the fastest yearly rate of 15.4% of all supplements in 2014, making them the most popular supplements. The digestive health benefits of probiotics have made them popular (Ciorba, 2012; Nagpal et al, 2012; Kailasapathy, 2013). The most often utilized strains or species of probiotics are Lactobacillus and Bifidobacterium. Retail sales of probiotics in 2014 came to RM9.0 million (USD2.8 million), representing less than 1% of the overall sales of vitamins and nutritional supplements that year. This represents a low market share. 

Market share by product category

In 2014, dietary supplements made approximately RM1.1 billion (USD333.9 million), or 58.3 percent of all retail sales. Vitamins come in second, with retail sales of RM389.2 million (USD120.2 million) in 2014, or 21.0 percent of the market.

In 2014, tonics and bottled nutritional drinks made up RM333.0 million (USD102.8 million), or 18.0% of total retail sales. Their market share has increased dramatically, from 10% in 2005 to almost twice that amount now.

Pediatric vitamins and nutritional supplements had the lowest market share of 2.7 percent in 2014, with retail sales of RM50.9 million (USD15.7 million). However, because more and more health-conscious parents are including their children’s supplements in the family’s regular health regimen, pediatric vitamins and dietary supplements are a growing trend in Malaysian health supplements. Probiotic supplements, colostrum, fish oil, and vitamin C are a few examples of pediatric nutritional supplements. The most popular vitamin for kids is vitamin C. 

Dietary Supplements

In 2014, dietary supplement sales were RM576.2m (USD177.9m), or 53.3%, split evenly between herbal/traditional supplements (46.7% of total sales) and non-herbal/traditional supplements (56.1% of total sales). Compared to conventional supplements, herbal and traditional supplements have shown a decline in sales over the past decade. Two thousand five retail sales of RM302.7 million (USD79.9m) were dominated by herbal/traditional supplements, making up 32.2%. With retail sales reaching RM505.4 million (USD156.0m) in 2014, this percentage fell to 27.2%. Supplements that aren’t herbal or traditional, such as tonics and nutritive drinks in bottles, have seen a significant decline in sales. 

Vitamins

In 2014, the vast majority of vitamin retail sales were of multivitamins, with RM243.4m (USD75.1m) or 62.5% of overall vitamin retail sales and RM145.8m (USD45.0m) for single vitamins, making up the remaining 37.5%. Sales of vitamin C reached RM92.8 million (USD28.7 million) in 2014, continuing a trend that began a few years ago. In 2014, about 60% of all vitamin sales were of vitamin C. 

Major market players

In 2014, Amway continued to dominate the local vitamin and dietary supplement business, with 16.3% market share and total retail sales of RM302.2m (USD93.3m). With its extensive line of vitamins and dietary supplement products sold under the well-known international brand Nutrilite, Amway has maintained its leading position for the past ten years. Additionally, the company’s network of direct dealers is rather substantial. Though it had a 19.4% market share in 2005, it has since lost ground to more formidable competitors.

In 2014, Amway had a market share of 17.8% in the dietary supplement category and 27.5% in the vitamin category.

In 2014, Cerebos’s popular Brand’s ® goods, especially Brand’s Essence of Chicken, contributed to 9.1 percent of total retail sales of RM169.5 million (USD52.3 million), making it the second-greatest market share in the vitamins and dietary supplements category. Since 2005, when it held a 5.2% share of the retail market, it has grown substantially. In 2014, Cerebos captured over 51% of the tonic and bottled nutritional drink market.

In 2014, with a market share of 6.5% and retail sales of RM121.1 million (USD37.4 million), USANA ranked third among popular vitamin and dietary supplement brands. This American firm has been selling health supplements, weight loss aids, and personal care items directly to Malaysian consumers since 2007.

COSWAY is a popular Malaysian brand that provides health supplements, personal care items, and household goods. It is a division of the Berjaya Group. With retail sales of RM106.3 million (USD32.8 million) in 2014, the company ranked fourth in the vitamins and dietary supplements industry, with a market share of 5.7%.

Elken is a manufacturer of water filtration systems and a direct seller of health supplements. With total retail sales of RM88.2 million (USD27.2 million) in 2014, the company’s brand was ranked fifth most popular, with a 4.8% market share.

With a total of RM787.3m (USD243.0m) in retail sales in 2014, these five brands accounted for 42.4% of the market. Even though they’re household names, Blackmores, Herbalife, and Kordel’s only comprised around 4% of the vitamin and supplement industry in 2014. 

Industry Outlook

Vitamins and dietary supplements are expected to have robust sales growth in Malaysia, according to Euromonitor International (“Euromonitor”). The increasing number of people concerned about their health, the prevalence of chronic diseases, and the disposable income in Malaysia all lend credence to the idea that dietary supplements can make a difference.

Sales of nutritional supplements and vitamins were anticipated at RM1.9 billion (USD572.6 million) in 2014, and according to Euromonitor, they will soar to RM2.2 billion (USD669.3 million) in 2019. From 2005 to 2014, the market experienced a CAGR of 7%, suggesting that it is aging. This would indicate a much lower CAGR of approximately 1.6%. 

Sales forecasts by category

Despite a decreased market share of 56.4% in 2019 compared to 58.3% in 2014, dietary supplements are anticipated to make up the biggest chunk of the overall predicted sales of RM2.2 billion (USD669.3 million) in 2019, accounting for RM1.2 billion (USD377.4 million).

Conversely, RM445.4m (USD137.5m) in sales of tonic and bottled nutritional drinks is anticipated in 2019. Because of this, tonics and bottled nutritional drinks would have a market share that is almost equal to that of vitamins, which is predicted to decline slightly to 20.4% in 2019.

With a projected sales of RM57.6 million (USD17.8 million) in 2019, the pediatric vitamins and nutritional supplements market is predicted to retain its 2.7% share. 

Key trends and developments

As discussed below, Euromonitor has identified three key trends and developments that are expected to influence demand for consumer health products in Malaysia:

1. Herbal/traditional health products will continue to be popular

The Malaysian market is poised for continued growth in herbal/traditional consumer health products, says Euromonitor. This is because people in Malaysia tend to believe that these products work better and have fewer negative side effects than non-herbal/traditional alternatives. Customers have faith in traditional items for self-care and illness prevention due to cultural exposure and the influence of friends and family.

As such, local Malaysians can look forward to health supplement companies releasing innovative herbal and traditional products. After reaching an estimated RM505.4m (USD156.0m) in 2014, Euromonitor projects that retail sales of herbal/traditional supplements would reach RM545.1m (USD168.3m) by 2019, an increase of 7.9 percent. On the other hand, compared to 2014’s 27.1% market share, 2019’s projected sales would indicate a small decline to 25.1%. 

2. Changing lifestyles and demographic patterns in Malaysia will have an impact on the demand for healthcare products

The demographic and lifestyle trends of Malaysia are anticipated to have a significant impact on the demand for healthcare products in the future. With 45.3% of its population being obese, Malaysia has the greatest obesity incidence in Asia, according to a 2014 study published in the Lancet medical magazine. Nearly half of Malaysian women and nearly half of Malaysian males were found to be obese.

Since obesity is a significant risk factor for NCDs, this has profound consequences for the incidence of NCDs including diabetes and cardiovascular disease in Malaysia. Ischemic heart disease and stroke accounted for about 30% of all fatalities in Malaysia in 2012, according to data from the World Health Organization (WHO).

The demand for omega 3-6-9 fatty acid supplements, including fish and non-fish oils, may rise in Malaysia due to the rising incidence of heart disease among consumers who are aware of the benefits of these acids for heart health. Sales of fish oils and omega fatty acids in Malaysian retail stores will reach RM113.6 million (USD35.1 million) in 2019, up 19.8 percent from RM94.8 million (USD29.3 million) in 2014. They will make up 5.2 percent of all dietary supplement sales in the country, according to Euromonitor.

Demographic data show that, similar to other Asian countries, the average age of Malaysians is increasing. From 7% in 2020 to 14% in 2043, the percentage of the population 65 and older will have increased double. There will likely be a greater need for bone and joint support supplements like calcium and glucosamine as the population ages and conditions like osteoporosis and osteoarthritis become more common. 

3. Technological progress to support increased demand for healthcare products

Google and TNS, a worldwide market research organization, surveyed smartphone users and found that 51% of Malaysians use smartphones, much outpacing the 39% of computer users. This puts Malaysia in the top five nations for smartphone adoption. Regarding the percentage of smartphone users in Malaysia who depend only on their devices to access the Internet, 35% are from Malaysia, making it the top country. In addition, except Singapore (82.0%) and Brunei (68.8%), Malaysia had a greater internet penetration rate in 2014 than most of its ASEAN neighbors, according to data from the World Bank.

Because of the country’s high rate of internet literacy, there are two potential outcomes: first, more people will be aware of the need to take care of one’s health, thanks to the proliferation of websites like MayoClinic.com, WebMD, and Mercola.com; and second, more people will buy health care supplements online. Therefore, the demand for healthcare products can rise due to technological progress in Malaysian society.