Page 43 - Malaysian Dietary Supplement Industry Status and Outlook Report 2019-2020 Preview

• While formulations may differ from product to Figure 2.2: Main Players in the Malaysian
product, product functionalities rarely differ Dietary Supplement Industry.
significantly. Relatively low barriers to ingredient
access result in multiple brand offerings in Source: MADSA.
mainstream product categories.
• Product margins are mainly a function of marketing
and promotional costs, with ingredient and
manufacturing costs at a lesser degree.
• Industry players in the upstream/up- to midstream
can secure more stable margins due to better
differentiated activities generated.
• Like most consumer goods, competition in brick-
and-mortar retail channels are stiff, with bargaining
power leaning towards the 6 or 7 large retail chains
operating nationwide.
• The lion’s share of shelf space is captured by 4 or 5
marketers—global brand owners with
comprehensive product offerings across multiple
categories.
• Local brand owners who may not be able to compete
on scale, pricing, and shelf space are forced to be
more innovative in niche applications, or are forced
out of the market via cessation, consolidation, or sale
of business.
• Direct sales channels can secure more stable
margins as marketing costs are invested into their
internal network of user-distributors, as well as
better capability to build loyalty among their
consumers through differentiated brand positioning.

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