James Dudley Management

James Dudley Management

OTC Self-medication and Rx to OTC Main Drivers in Europe's Non Prescription Skin Care Market

Overall the European non-prescription skin care market grew 30% since 1993 to reach $1.55 billion in 1998.

Prescription business declined by 3% over the same period while consumer driven self-medication sales grew 41%.

Rx to OTC switches of anti-viral cold sore treatments and gynaecological anti-fungals added almost $70 million to the European non-prescription skin care market between 1993 and 1998 contributing almost 20% to total market growth over the period.

So says a major new study from James Dudley Management which is published in April 1999.

Even so, 74% of the present European skin care market is expected to show less than 1% a year growth. 38% will show zero to negative growth over the next five years.

Graph 1: Growth Analysis by Product Subcategory - The European Non-Prescription Skin Care Market

Source: © James Dudley Skin Care in Self-medication Europe 2003 James Dudley Management Reports April 1999

The more exciting growth areas of the market are wound healing products, gynaecological anti-fungals and anti-viral cold sore treatments which account for just over a quarter of market sales.

While antiseptics, anti-irritants and general anti-fungals present large ‘cash cow’ opportunities for the major suppliers with established brands such as Asta Medica, Novartis, Chefaro and Johnson and Johnson, anti acne products present only continuing decline in the non-prescription sector says the report.

Meltdown of the Prescription Sector

Healthcare reforms and the effects of generic products have severely undermined the prescription sector for non-prescription bound skin care products.

In 1993 prescription business accounted for just under a quarter of the European skin care market. By 1998 this was less than 20%.

Graph 2: The European Non Prescription Skin Care Market OTC Compared to Prescription Sales 1993 - 1998

Source: © James Dudley Skin Care in Self-medication Europe 2003 James Dudley Management Reports April 1999

Taking the major European markets, prescription business declined 50% in Spain, 10% in Belgium and 6% in Germany between 1993 and 1998 while growth was zero in France.

Graph 3: Skin Care market % Value Growth Non Prescription Bound Market by Prescription and Self-medication Sales

Source: © James Dudley Skin Care in Self-medication Europe 2003 James Dudley Management Reports April 1999

Self-medication as the Market Driver

Analysis of product category performance over the last five years shows that self-medication has provided the primary source of growth in the European skin care market.

Table 1 shows product category growth in terms of the total non-prescription market and self-medication consumption growth between 1993 and 1998.

Table 1

The European Skin Care Market

Self-medication as the Growth Driver 1993 - 1888

Subcategory Market Total Non Prescription Growth % Total Self-medication Growth %

Anti-irritants

Spain

Italy

UK

France

Belgium

74

43

(13)

7

17

129

45

23

19

26

Anti-fungals

Italy

Spain

Germany

UK

259

143

7

(18)

>999

147

24

32

Gynaecological Anti-fungals

UK

France

28

9

230

33

Antiseptics

Italy

Germany

Belgium

23

21

1

23

44

25

Wound Healing

Italy

France

Belgium

Germany

96

28

21

11

99

35

27

29

Skin Protection

Italy

Spain

59

34

59

34

Source: © James Dudley Skin Care in Self-medication Europe 2003 James Dudley Management Reports April 1999

Spain, Italy and Belgium as Western Europe’s Most Attractive Skin Care Markets

The James Dudley report also shows that Spain, Italy and Belgium as the most attractive Western Europe markets in terms of future growth potential while Germany and France are over-saturated mature markets which are likely to show stagnant to negative growth over the next five years.

Among Europe’s minor markets Portugal has shown the strongest consistent growth, while in the Czech Republic and Slovakia, growth rates experienced over the past five years have taken a pause. Poland, despite the country’s economic slowdown, has a medium term potential for strong growth with sales already equally those of Belgium and the Netherlands. The shine on the Russian market has been wiped off with the economic blight which overtook the country in mid 1998.

The UK offers medium term attractiveness for growth over the next five years but will become increasingly competitive especially among the new subcategories such as anti-fungals, topical steroids and anti-viral cold sore products.

Germany is the largest skin care market with 29% share by value, followed by France with 23% and the UK with 20%, Italy has 11% and Spain 4%. Belgium, Netherlands and Poland each have 3% while Portugal has 2%.

Others including Czech Republic, Slovakia and a much diminished Russian market combine to 2%.

Graph 4: The European Non Prescription Bound Skin Care Products Market Split by Territory 1998

Source: © James Dudley Skin Care in Self-medication Europe 2003 James Dudley Management Reports April 1999

Europe’s Leading Skin Care Companies

Graph 5: Europe’s Leading Non Prescription Skin Care Companies 1998

Source: © James Dudley Skin Care in Self-medication Europe 2003 James Dudley Management Reports April 1999

The major companies in the non-prescription skin care market are Johnson & Johnson with 6% largely attributable to anti-fungal brands including Daktarin and Pevaryl.

Boots is in joint second place in the European market with Bayer and Arentis. Share is based on the company’s E45 range in the UK and skin care brands acquired through its take over of Hermal.

Bayer is again in joint second place with Canesten as its main skin care brand. The Aventis’ position is based on the combined skin care portolfio of Hoechst and Rhône Poulenc Rorer.

Glaxo Wellcome is fifth place in Europe with its Zovirax cold sore cream.

Johnson and Johnson is overall market leader in Belgium, France and the Netherlands.

Asta Medica is market leader in Portugal and Spain but holds number two positions in Belgium and Germany.

Glaxo Wellcome holds a top four position in Belgium, France, Netherlands and Poland. The company is also the number five supplier in the UK.

Boots is the market leader in the UK and has a strong position in Germany.

Table 2

Leading Skin Care Suppliers by Key Territories 1998

% Market Share

Territory

No. 1

No. 2

No. 3

No. 4

Belgium

Johnson & Johnson

15.1

Asta Medica

5.6

Reckitt & Colman

5.4

Glaxo Wellcome

5.2

France

Johnson & Johnson

11.9

Pierre Fabre

7.7

Glaxo Wellcome

3.7

Procter and Gamble

2.2

Germany

Roche

5.6

Asta Medica

4.5

Merckle

4.3

Hoechst

3.4

Italy

Johnson & Johnson

10.1

Warner Lambert 4.5

Amuchina

3.9

Schering Plough

3.9

Netherlands

Johnson & Johnson

12.8

Chefaro

6.2

Glaxo Wellcome

5.2

Asta Medica

4.8

Poland

Unia

6.3

Ziololek

5.7

Procter and Gamble 3.5

Glaxo Wellcome

3.5

Portugal

Asta Medica

9.1

Schering Plough 8.4

Novartis

5.8

Dumex

3.9

Spain

Asta Medica

12.1

Funk

10.6

Novartis

5.1

Chefaro

4.8

UK

Boots

11.5

Bayer

10.7

Reckitt & Colman

5.9

Stiefel

5.5

Source: © James Dudley Skin Care in Self-medication Europe 2003 James Dudley Management Reports April 1999

Forecasts for the Future

The total non-prescription bound market for skin care products for all European markets is expected to increase by just 2.6% to reach $1589.9 million by 2003. The OTC sector is forecast to grow 5.7% to reach $1336.6 million over the same period.

Graph 6: Forecast for the Total European Skin Care Products Market

Source: © James Dudley Skin Care in Self-medication Europe 2003 James Dudley Management Reports April 1999

Skin care in self-medication Europe 2003 from James Dudley Management covers anti-irritants, acne products, anti-fungals, gynaecological anti-fungals, antiseptics, wound healing products, anti-viral cold sore products and skin protection in nine European markets in depth i.e. Belgium, France, Germany, Italy, the Netherlands, Poland, Portugal, Spain and the UK and in summary includes the Czech Republic, Slovakia and Russia.

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