The value of the OTC product market in Poland, understood as sales of medicines and dietary supplements designed for special dietary medical reasons, came to more than PLN 14bn in 2019 (pharmacy and non-pharmacy sales). This represented a year-on-year increase of almost 7%, according to PMR’s latest report, entitled “OTC products and dietary supplements for special medical purposes. Market analysis and development forecasts for 2020-2025”. In PMR’s opinion, 2020 will be a good year for this market subgroup, despite the crisis in the overall economy caused by the coronavirus pandemic.
OTC products will continue to grow despite the economic slowdown in 2020.
After ongoing solid economic growth in 2019 (4.0% year on year in real terms), we expect GDP to fall this year in the wake of the widening pandemic, growing uncertainty in the external environment and a worsening internal situation. In the pessimistic scenario, GDP reduction in 2020 could be in two figures.
However, it is no surprise that the pharmaceutical industry is one of those least affected by the current economic situation. According to a survey carried out by PMR in April 2020, the percentage of companies in the industry which have not only retained business, but are currently witnessing an increase, is the highest observed – 17% (in comparison with the other industries surveyed – with the average for all industries standing at 9%).
In both the baseline and pessimistic variants, growth on the OTC market will, therefore, be positive, standing at several percent, according to PMR forecasts. In the case of dietary supplements, sales of products which support resistance will increase, but, with a reduction in consumer purchasing power, the value of sales in other categories could be less dynamic than that of the year before. A survey carried out by PMR in April 2020 shows that the more “optional” a product in the pharmaceutical category, the higher the percentage of people declaring that they have given up or reduced their purchases of a given product during the recent period of the epidemic. In addition, patients may turn to cheaper products, and this could benefit private labels. In general, we forecast that the rate of growth of the overall OTC drug and dietary supplement market will exceed 6% in 2020 (in the baseline scenario).
COVID-19 will affect online sales of OTC products
The coronavirus pandemic may lead to changes in the breakdown of OTC product distribution. The internet channel benefits from the current situation. Although pharmacies have remained open, some people who have, for example, switched to remote work, or who have had alternative outlets restricted, have been shopping by means of the e-commerce channel instead of traditional channels. The impact of the pandemic has also been apparent at shops and petrol stations. The restrictions introduced have reduced the numbers of visitors and, consequently, the amount of shopping, and impulse buying in particular, including that involving OTC products. Some such people might also make purchases via e-commerce channels.
A survey conducted by PMR among companies operating on the Polish market in April 2020 shows that, among the economic areas surveyed, the coronavirus pandemic has brought the greatest benefit to online sales in the retail and pharmaceutical/healthcare industries. At the same time, it should be noted that the pharmacy channel will remain the main place of purchase of OTC products, but that its share might be reduced in favour of online sales.
Dermocosmetics most at risk from the coronavirus pandemic
Dermocosmetics on the OTC market are the products which are most strongly dependent on the economic situations of households. They are rarely classified by consumers as priority goods. In the face of the crisis, the rate of growth of sales of such products could exhibit the most severe slowdown. The deterioration in the economic outlook associated with the pandemic, and the consequent reduction in consumer purchasing power, could significantly affect the best-selling products in this category. These are often luxury products on which consumers are willing to save money in preference to others.
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