This is a high-growth industry sector for the country. It includes a market overview as well as trade data for nutritional and food supplements.
Public healthcare is heavily subsidized
In Malaysia, public healthcare is heavily subsidized. As healthcare costs rise, public hospitals become overcrowded and overburdened. The Malaysian government places a high value on its citizens’ health and well-being, allocating a significant portion of its national budget to the healthcare sector. In 2017, the Ministry of Health received 9.4 percent of the national budget. The government set aside approximately US$6.75 billion, or 10.4 percent of the annual national budget, nutritional and food supplements, for public healthcare in 2018. A total of $1 billion has been set aside for consumables, which include supplies and pharmaceuticals.
The upper-middle and upper-income segments of the Malaysian population frequently prefer to use private healthcare providers because the services are usually faster and of higher quality. The upper-middle and upper-income segments are more educated and more likely to take charge of their own health. They believe that an ounce of prevention is worth a pound of cure. As a result, nutritional and food supplements are viewed as a way to maintain and improve overall wellness. Vitamins, minerals, herbs, meal supplements, sports nutrition products, natural food supplements, and other related products are examples of nutritional and food supplements.
China was the largest exporter of nutritional and food supplements to Malaysia in 2017, accounting for 26.1 percent of the market. Switzerland (23 percent), Thailand (14.7 percent), Germany (7.1 percent), and the United States (5.7 percent) were the next largest sources of nutritional and food supplements. With the caveat that US companies must be aware of Malaysia’s price sensitivities, US brands are both trusted and well received by Malaysian consumers.
In Malaysia, direct selling companies are major importers of health supplements. The nutritional and food supplement are usually privately labeled. The market for certified organic and natural health supplements is a small but growing one. High-end proprietary American brands would thrive in specialized healthcare or organic stores. The market would welcome cholesterol-lowering products, cardiovascular and cancer-prevention supplements, nutritional products, nutritional and food supplements, and diabetic-friendly supplements. Given that Muslims constitute the majority of Malaysia’s population, halal/vegetarian supplements are highly recommended.
Sub-Sectors in Charge
Imports account for the majority of Malaysia’s nutritional and food supplement consumption. Nutritional and food supplements can take the form of finished goods or raw materials for on-site assembly. Local importers frequently work with foreign manufacturers to acquire private-labeled products. Local importers are increasingly collaborating with foreign supplement manufacturers to develop their own formulations. Some companies source raw materials and create their own nutritional and food supplement.
According to Malaysia’s National Pharmaceutical Regulatory Agency (NPRA), one-third of Malaysian manufacturers have Good Manufacturing Practices (GMP) licenses to produce modern medicines such as analgesics, antacids, anti-hypertensive, diuretics, antibiotics, and antihistamines. Two-thirds are licensed to manufacture local traditional and herbal medicines, nutritional and food supplements, as well as food supplements. The remainder is for veterinary supplement manufacturers.
Herbal Industry in Malaysia
In Malaysia, ethnic diversity, as well as traditional medicine practices, has aided in the development of nutraceuticals. Traditional Malay, Chinese, and Indian medicines, Islamic medical practice, homeopathy, and chiropractic and osteopathy treatments are the six major forms of traditional medicine practiced in the country. These practices were introduced by ancestors of modern practitioners as early as six centuries ago.
The country also has a high level of biodiversity and is home to some of the world’s oldest rainforests, making it a treasure trove of over 2,000 medicinal plants. Malaysia has a competitive advantage over its global counterparts in the development of nutraceuticals due to the sheer abundance of raw materials.
Nutraceutical products are closely related to the herbal industry, which was identified in 2011 as a new source of economic growth under the agriculture New Key Economic Areas (NKEA). The industry offers exciting opportunities for the country, with potential GDP contributions ranging from RM19 billion to RM28 billion by 2027. The increased registration of natural products exemplifies this. According to the National Pharmaceutical Regulatory Agency (NPRA), natural products accounted for more than half of all products registered in 2019.
Policies and Strategies
Several policies and strategies to support the national herbal industry have been established to encourage additional stakeholder interest and drive more R&D within the local herbal industry. These strategies include the First and Third Industrial Master Plans, the First and Second Agricultural Policies, the National Agro-Food Policy (NAP), the Science and Technology Policy, the National Biodiversity Policy, the Traditional Medicine, and Complementary Policy, and the National Key Economic Areas (NKEA).
The Ministry of Agriculture and Food Industry (MAFI) has appointed a number of potential companies to conduct high-value herbal research and development and manufacturing. Medika Natura, Nova Laboratories, Bioalpha, Natural Wellness Biotech, Biotropics Malaysia, and Tenaga Jati Bumi are among them.
Recognizing the importance of the herbal industry, the Forest Research Institute Malaysia (FRIM) established the Natural Product Quality Control (NPQC) Laboratory to ensure the quality and safety of products. The National Pharmaceutical Regulatory Agency (NPRA) has designated the laboratory as a panel lab for the requirement of product registration. Furthermore, the introduction of the Diploma in Herbal Production by Universiti Teknologi MARA underscored the importance of expert accreditation in the herbal industry.
In addition, herbal products with therapeutic and/or clinical claims must be regulated. As a result, the NPRA has been tasked with ensuring that therapeutic substances and cosmetic products approved for the Malaysian market are safe, effective, and of high quality. Herbal products with therapeutic and/or clinical claims will be regulated under the Guidelines on Natural Products with Therapeutic Claims beginning on June 18, 2020. These products must be registered with additional documentation, such as administrative data and product information, to support product quality, safety, and efficacy via non-clinical and clinical documents, based on research and clinical data.
Malaysia is ranked sixth in the Asia Pacific region and the top country in Southeast Asia for both obesity and diabetes. Obesity and diabetes have been linked to serious Noncommunicable Diseases (NCDs) such as heart disease and hypertension. As a result, Malaysian people are becoming increasingly aware of potential health issues associated with eating habits and have become more proactive in their search for consumer health products to prevent such chronic diseases. The increased consumption of health supplements can be attributed to a greater awareness of health issues as well as the availability of more disposable income.
There is a wide variety of health supplements on the market, including products for joint health, digestive health, heart and circulation, stress and energy, eye health, multivitamins and antioxidants, weight management, detox, and wellness products for the elderly.
Natural and organic supplements, as well as sports nutrition, are becoming increasingly popular. Some of the market’s best sellers include joint-support care, fish oils, heart-care, cholesterol-lowering supplements, CoQ10, Gingko, collagen supplements, detoxification preparations and dietary supplements, and male health supplements. A combination of two or more types of natural supplement ingredients has a higher market perception than a single type of supplement. Natural slimming and fat-burning supplements, as well as skin and hair strengthening supplements, are in high demand.
Furthermore, Malaysia has a competitive advantage in the global market due to its ability to position itself as the leading halal certifier for halal products in food, cosmetics, and pharmaceuticals, as well as the uniqueness of indigenous herbs available for the production of Malaysia-owned intellectual property (IP) end-products.
With the recent regulatory development on herbal products, T&CM companies can now register herbal products with high claims by providing supporting documentation and R&D requirements. Furthermore, given Malaysia’s rapid development of the herbal industry, it is hoped that medical care facilities will investigate the use of herbal products as an alternative to conventional health treatment.
Malaysia can eventually become the leading global supplier of high-quality indigenous herbs to major T&CM markets in Asia by focusing on producing and cultivating high-quality and in-demand herbs. The industry can progress toward sustainable and profitable development with ongoing efforts from the public and private sectors.