COVID-19 May Mean Opportunity for the Indian Consumer Health Industry

On June 24, India reported 15,968 new coronavirus cases, a new single-day record, according to government statistics. That brought the nationwide total of cases to 456,183. Last week, Prime Minister Narendra Modi ruled out another nationwide lockdown.

What does the surge of COVID-19 cases in India mean for the country’s consumer health sector? To find out, GLG’s Neha Chhabria spoke with Brijesh Kapil, former Director of Marketing and Sales – Consumer Health at Procter & Gamble and former Executive Director at Merck Consumer Health. The Q&A below has been edited for length and clarity.

What impact is COVID-19 having on the consumer health industry in India?

COVID-19 doesn’t show any signs of plateauing, currently. Pharma has shown no signs of slowing in India either. In the three years before the first quarter, the NIFTY index has grown from 6,000 to 9,500 points. For most top companies, stock prices are running close to their 52-week highs. Looking at the fast-moving consumer goods industry, the growth was close to 9% and has petered out in Q1 to about 6%. IQVIA is projecting the whole pharma industry to be straddling somewhere close to 1% to 5% growth, with the best case around 6%.

There’s a huge opportunity within the consumer health industry for three strong reasons. First is that, right now, there’s no cure for COVID-19. Vaccines are in development, but the typical time the pharma industry takes to develop a vaccine is around 15 years. It’s a four-month-old virus, and I don’t think we’ll get a vaccine soon. There are no direct cures coming up, so although there are antiretrovirals like lopinavir, ritonavir, and remdesivir, nothing is for sure a therapy. Also, anywhere from 60% to 80% of COVID-19 symptoms are not exhibited. That is a huge challenge; people could be spreading the virus without knowing it.

For consumers, these factors raise health and hygiene concerns. That brings opportunities for the consumer health industry.

What are the emerging categories within the consumer health segment?

COVID-19 causes fever, tiredness, dry cough, aches and pains, nasal congestion, and a runny nose. I expect the cough, cold, and allergy category to go through the roof. Clearly, at this moment in India, the habits of consumers dealing with a cough lie in the syrups segment. Almost all syrups in India are dosed every six hours. That presents a huge opportunity for the companies in the category. We expect a big thrust there.

In a pre-COVID-19 scenario, people wouldn’t bother to treat a sore throat with a lozenge. But today, when people are coughing, everybody looks at them – what are they doing about it? Consumer health companies need to answer this. Throat remedies are currently dominated by brands in the herbal domain. These companies don’t have the distribution required to leverage the market. Clearly, other brands getting into these categories would be an opportunity. They need to jack up distribution with herbals.

The second big category is expected to be vitamins, minerals, and supplements, as well as dietary supplements. According to the IQVIA database and Nicholas Hall database, the segment hovers around 30% of the entire consumer health and over-the-counter (OTC) market. This COVID-19 scenario is expected to jack up the segment, if played well. Your health is your only defense against COVID-19 right now, coupled with hygiene. Dabur Chyawanprash, a concoction of close to 54 herbs, is sitting as the second- or the third-largest brand in the market. Not many players have entered this immunity domain. So these products could be coming up in a big way.

Meanwhile, sanitizers, masks, disinfectants, and air purifiers are expected to grow through the roof.

What are the potential threats or opportunities within this sector?

If we look at the IPSOS survey, one of the areas it talks about is that people are not regular with their medications. Statistics say that only 27% of people take drugs in the dosage and duration as prescribed by their doctor. One of the expected impacts of COVID-19 is that people become serious with their medication.

The second component is that more people will take vitamins within the same family. Most consumer research shows that people up to 30 years old feel invincible. COVID-19 will change their mentality because in India there are cases of young people suffering and succumbing to the virus. So this will break that thinking and encourage people to take products to protect themselves against COVID-19. The same scenario is expected with older people – COVID-19 will make them pop vitamin supplements like never before.

These are clear opportunities. The consumer health industry has to play it well. The vitamin and dietary supplement domain should go ahead and max it. In the hygiene domain, companies such as Dabur have launched close to eight products in a month’s time. HLL responded with six to eight ranges of hand sanitizers.

For threats, we have yet to see the full impact of COVID-19. As I mentioned earlier, the asymptomatic behavior of this virus is a threat. Dharavi, one of Asia’s largest slums, is a two-square-kilometers area where 800,000 people live. One toilet is shared by 80 to 100 people. You can imagine how this could explode – we are sitting on a live bomb.

Considering companies that are low on margins and profits, the other threat is international trade (60% to 70% of active pharma ingredients), specifically coming out of China. There are also pressures from the government to keep the prices of the consumer health industry low. These factors could lead to profitability issues in the consumer health industry.

About Brijesh Kapil

Brijesh Kapil is a veteran in the consumer healthcare and OTC market. He was the Director of Marketing and Sales at Procter & Gamble from December 2018 to 2020, where he was responsible for business growth, delivery of FPP targets, EBIDTA targets, and P&L. Previously, he was the Executive Director at Merck Consumer Health from 2014 to 2018, where he achieved aggressive business growth and market share for Merck and its global brands, such as Neurobion, Nasivion, and Seven Seas, and local brands such as Polybion, Evion, and Livogen.

This article is adapted from the May 8, 2020, GLG teleconference “COVID-19: Is the Consumer Health Industry Immune? Market Outlook in India.” If you would like access to this teleconference or would like to speak with Brijesh Kapil, or any of our more than 700,000 experts, contact us.

GLG is supporting nonprofits on the front line of COVID-19 relief, pro bono. If you represent or know of an organization that could use our help, let us know here. If you are a GLG network member whose expertise might be valuable to a relief organization, please get in touch here.