Indonesia Dietary Supplements Market, By Region, Competition, Forecast & Opportunities, 2019-2029F

Report
82 Pages
July 2024
Region: Indonesia
TechSci Research
ID: 5986532

Indonesia Dietary Supplements Market was valued at USD 3.04 billion in 2023 and is anticipated to project impressive growth in the forecast period with a CAGR of 6.43% through 2029. The Indonesia dietary supplements market is primarily driven by increasing health awareness among the population, a growing middle class with higher disposable incomes, and a rising prevalence of lifestyle-related diseases. The COVID-19 pandemic has further heightened the focus on immunity and overall health, boosting demand for vitamins, minerals, and herbal supplements. The expansion of e-commerce platforms has made dietary supplements more accessible, contributing to market growth. Government initiatives promoting health and wellness and the influence of social media and marketing campaigns have also played significant roles in increasing consumer interest. The younger demographic's inclination towards fitness and proactive health management fuels the demand for supplements aimed at improving physical performance and appearance. The market is also benefiting from innovations in product formulations and packaging, catering to diverse consumer preferences and needs.

Key Market Drivers

Increasing Health Awareness

The rising health consciousness among Indonesian consumers has significantly boosted the demand for dietary supplements. In April 2021, Bayer introduced the Indonesian segment of its worldwide flagship initiative, the Nutrient Gap Initiative, aimed at increasing access to essential vitamins and minerals for underserved communities. To launch this initiative, Bayer initiated a self-care program in collaboration with Mercy Corps Indonesia. This program will focus on educating urban vulnerable communities in Penjaringan, North Jakarta, and Duri Kosambi, West Jakarta, about the importance of nutrition, understanding anemia and immunity, personal hygiene, and maintaining a healthy home environment. Health supplements will be distributed as part of this effort to support community health and well-being.

As people become more aware of the benefits of maintaining a healthy lifestyle, there is a growing emphasis on preventive healthcare rather than reactive treatment. This shift is driven by extensive public health campaigns, increasing access to health information via the internet, and a higher incidence of lifestyle-related diseases. Consumers are now more informed about the benefits of vitamins, minerals, and herbal supplements, leading to a greater willingness to incorporate these products into their daily routines. The awareness is not limited to urban areas; even in rural regions, there's a noticeable uptick in health awareness due to improved education and outreach programs.

Growing Middle Class and Disposable Income

Indonesia's economic growth over the past few decades has been remarkable, characterized by a significant increase in GDP and a reduction in poverty rates. This economic transformation has led to the emergence of a substantial middle class, which is now a major driving force behind consumer markets, including health and wellness products like dietary supplements. As the economy grows, so does the average income of its citizens, resulting in higher disposable incomes. This rise in disposable income has a profound impact on consumer behavior, particularly in terms of spending on health and wellness.

The burgeoning middle class in Indonesia now has the financial means to go beyond mere subsistence and invest in products that enhance their quality of life. This demographic shift means that more people can afford to prioritize their health, leading to increased spending on dietary supplements. These products, once considered luxuries, are now becoming regular components of household budgets. Consumers are increasingly aware of the long-term benefits of maintaining good health and are willing to spend more on products that promise better health outcomes. As disposable incomes rise, there is a noticeable shift in consumption patterns. The middle class is moving away from spending primarily on basic necessities like food and shelter towards more discretionary spending. This shift includes a growing interest in products that support a healthy lifestyle, such as dietary supplements. These supplements are seen not just as products for those who are unwell, but as preventative measures that can contribute to overall well-being. This proactive approach to health is becoming more prevalent among middle-class Indonesians, reflecting broader global trends.

Prevalence of Lifestyle-related Diseases

The increasing prevalence of lifestyle-related diseases such as diabetes, hypertension, and obesity has made dietary supplements more appealing to Indonesian consumers. These health issues are often linked to poor dietary habits and sedentary lifestyles, which are becoming more common in urban areas. According to an article, titled, “Analysis of Modifiable, Non-Modifiable, and Physiological Risk Factors of Non-Communicable Diseases in Indonesia: Evidence from the 2018 Indonesian Basic Health Research”, Indonesia is undergoing rapid technological advancements, environmental transformations, and a transition from traditional to modern lifestyles. These changes have significantly altered the disease landscape within society, with non-communicable diseases (NCDs) now prevailing. Shifts in disease patterns accompany these developments. Failure to control the rising trend of NCDs among children could impede government efforts to foster a healthy generation, particularly as Indonesia anticipates a demographic shift towards a population dominated by the productive age group between 2030 and 2040. Therefore, prioritizing prevention is crucial in mitigating the risks associated with NCDs.

As a result, there is a growing demand for supplements that can help manage or prevent these conditions. Products that support weight management, cardiovascular health, and blood sugar control are particularly popular. The fear of chronic diseases has prompted many to adopt dietary supplements as a proactive measure to enhance their health and well-being, contributing significantly to market growth.

Innovation in Product Formulations and Packaging

Innovation in product formulations and packaging is a key driver of the dietary supplements market in Indonesia. Companies continuously research and develop new products to meet the evolving needs and preferences of consumers. This includes the creation of supplements with enhanced bioavailability, combination products targeting multiple health benefits, and the use of natural and organic ingredients. Innovative packaging solutions, such as single-serve packets and easy-to-carry bottles, cater to the convenience of modern consumers. These advancements not only attract new customers but also encourage existing ones to try different products, thereby expanding the market.

Key Market Challenges

Regulatory Hurdles and Compliance Issues

One of the significant challenges faced by the dietary supplements market in Indonesia is navigating the complex regulatory landscape. The Indonesian National Agency of Drug and Food Control (BPOM) sets stringent regulations for dietary supplements to ensure product safety and efficacy. These regulations cover various aspects, including ingredient approval, manufacturing practices, labeling, and advertising. While these regulations are crucial for consumer safety, they can pose significant hurdles for manufacturers and distributors.

Compliance with BPOM regulations requires substantial investment in quality control, testing, and documentation. Smaller companies and new entrants may find it particularly challenging to meet these requirements due to limited resources. The regulatory approval process can be time-consuming, delaying the launch of new products. This bureaucratic delay can hinder market dynamics and slow down innovation.

There are issues related to inconsistent enforcement of regulations. Variability in how regulations are applied and interpreted can lead to confusion and uncertainty among manufacturers. Companies may face difficulties in ensuring that their products consistently meet the regulatory standards, leading to potential legal and financial repercussions. Another aspect of regulatory challenge is the crackdown on counterfeit and substandard products, which is prevalent in Indonesia. While BPOM has been active in addressing these issues, the presence of fake products in the market undermines consumer trust and poses health risks. Legitimate companies must invest extra resources in protecting their brands and ensuring their products' authenticity.

Supply Chain and Distribution Challenges

Efficient supply chain and distribution networks are crucial for the success of the dietary supplements market in Indonesia. However, there are several challenges in this area that companies must navigate. Indonesia's vast archipelago presents logistical complexities, making it difficult to ensure timely and cost-effective distribution of products across the country. Transportation infrastructure varies significantly between urban and rural areas. While major cities like Jakarta, Surabaya, and Bandung have relatively developed logistics networks, reaching remote and rural regions remains a challenge. Poor infrastructure in these areas can lead to delays, increased transportation costs, and difficulties in maintaining product quality during transit. The cold chain management for certain dietary supplements that require specific storage conditions can be problematic. Maintaining the integrity of these products throughout the supply chain is essential to ensure their efficacy and safety. Any lapses in temperature control can compromise product quality, leading to potential health risks and financial losses.

the distribution network in Indonesia is characterized by a multitude of small and medium-sized retailers, including pharmacies, health food stores, and traditional markets. Coordinating with numerous distribution points adds complexity and requires effective management systems. Ensuring consistent product availability and preventing stockouts or overstocking are ongoing challenges for companies. The rise of e-commerce has provided an alternative distribution channel, but it comes with its own set of challenges. Companies must invest in robust online platforms, digital marketing, and efficient delivery systems to compete in the digital marketplace. The risk of counterfeit products being sold online necessitates stringent measures to protect brand integrity and consumer trust.

Key Market Trends

Expansion of E-commerce Platforms

The rapid expansion of e-commerce platforms in Indonesia has revolutionized the dietary supplements market. Online shopping offers consumers the convenience of purchasing supplements from the comfort of their homes, with a wide variety of products to choose from. E-commerce platforms also provide detailed product information, reviews, and competitive pricing, which helps consumers make informed decisions. The growth of e-commerce has made dietary supplements more accessible, especially in regions where physical stores are limited. The advent of mobile apps and digital payment solutions has further streamlined the buying process, driving market growth by reaching a broader audience.

Government Initiatives Promoting Health and Wellness

The Indonesian government has been proactive in promoting health and wellness among its citizens. Various initiatives and public health campaigns aim to educate the population about the benefits of a healthy lifestyle, including the use of dietary supplements. These efforts include national nutrition programs, awareness campaigns about the importance of vitamins and minerals, and support for local supplement manufacturers. Government regulations also ensure the quality and safety of dietary supplements, building consumer trust. Such initiatives not only enhance public awareness but also create a favorable environment for the growth of the dietary supplements market in Indonesia.

Segmental Insights

Product Type Insights

Based on the Product Type, vitamins stand out as the dominant segment. This prominence is driven by several factors, including widespread health awareness, the emphasis on preventive healthcare, and targeted marketing campaigns that highlight the benefits of vitamin supplementation. The increasing health consciousness among Indonesians is a primary factor contributing to the dominance of vitamins in the dietary supplements market. As more individuals become aware of the importance of maintaining good health, there is a growing focus on preventive healthcare measures. Vitamins, particularly multivitamins, are perceived as essential for filling nutritional gaps in the diet and supporting overall health. This perception is reinforced by public health campaigns and the availability of information on the benefits of vitamins in preventing various deficiencies and health issues.

Certain vitamins have gained particular popularity due to their well-documented health benefits. For instance, Vitamin C is widely consumed for its immune-boosting properties, especially in the context of the COVID-19 pandemic. Vitamin D, essential for bone health and immune function, has also seen increased demand, particularly in urban areas where individuals may have limited sun exposure. The widespread use of these vitamins reflects the consumer preference for products that offer tangible health benefits and are backed by scientific evidence.

Form Insights

Based on the Form, tablets dominate as the preferred form of supplement. This dominance is attributed to several key factors, including convenience, cost-effectiveness, ease of dosage, and consumer familiarity. Tablets offer unparalleled convenience, which is a major factor driving their popularity in the Indonesian market. They are easy to carry, store, and consume, making them a practical choice for consumers with busy lifestyles. Unlike powders or liquids, which may require mixing or measuring, tablets provide a straightforward, no-fuss option. This simplicity appeals to a wide range of consumers, including those who seek a quick and easy way to incorporate supplements into their daily routine.

From a manufacturing perspective, tablets are generally more cost-effective to produce compared to other forms like capsules, soft gels, and liquids. This cost advantage often translates to lower prices for consumers, making tablets a more affordable option. In a price-sensitive market like Indonesia, where a significant portion of the population is cost-conscious, the affordability of tablets enhances their appeal and accessibility. Tablets offer precise dosage control, which is crucial for ensuring that consumers receive the correct amount of nutrients. Each tablet contains a fixed amount of active ingredients, providing consistency and accuracy in supplementation. This aspect is particularly important for consumers who are mindful of their nutrient intake and seek reliable products that deliver the exact dosage they require. Tablets eliminate the guesswork associated with measuring powders or liquids, providing a more controlled and predictable supplementation experience.

Regional Insights

Java stands out as the dominant region. This dominance is driven by several factors, including its large population, economic development, urbanization, higher health awareness, and better access to healthcare facilities and retail networks. Java, the most populous island in Indonesia, is home to over half of the country's population. Major cities such as Jakarta, Surabaya, Bandung, and Yogyakarta are located here, creating a significant consumer base. The high population density in Java means that there is a larger market for dietary supplements compared to other regions like Bali, Kalimantan, and Sumatra. The sheer number of potential consumers in Java naturally translates to higher demand for health and wellness products, including dietary supplements.

Economic development in Java further amplifies its dominance in the dietary supplements market. The island is Indonesia's economic powerhouse, contributing a significant portion of the country's GDP. This economic vitality has led to higher disposable incomes among its residents, enabling them to spend more on health and wellness products. With more financial resources, consumers in Java are more likely to invest in dietary supplements as part of their health maintenance routines. This economic affluence supports the growth and consumption of a wide range of supplements, from basic vitamins and minerals to specialized and premium products.

Key Market Players

PT. Kalbe Farma Tbk
PT. Sido Muncul Herbal Medicine and Pharmaceutical Industry Tbk.
PT. Deltomed Laboratories
PT. Enseval Medika Prima
PT. Pyridam Farma Tbk
PT. SOHO Industri Pharmasi
PT. Nutrifood Indonesia
PT. Suryaprana Nutrisindo
PT. NATURALLY PLUS INDONESIA
PT. Citra Nusa Insan Cemerlang

Report Scope:

In this report, the Indonesia Dietary Supplements Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

Indonesia Dietary Supplements Market, By Product Type:

Vitamin
Combination Dietary Supplement
Herbal Supplement
Fish Oil & Omega Fatty Acid
Protein
Others

Indonesia Dietary Supplements Market, By Form:

Tablets
Capsules
Powder
Liquids
Soft Gels

Indonesia Dietary Supplements Market, By Application:

Energy & Weight Management
General Health
Bone & Joint Health
Immunity
Others

Indonesia Dietary Supplements Market, By Distribution Channel:

Pharmacies and Drug Stores
Supermarkets and Hypermarkets
Online
Others

Indonesia Dietary Supplements Market, By End User:

Infants
Children
Adults
Pregnant Females
Geriatric