This article first appeared in The Edge Financial Daily, on July 11, 2016.

KUALA LUMPUR: As healthcare costs continue its relentless upward spiral, the practice of self-medicating has been gaining traction in Malaysia, particularly with the rise in access to the Internet and digital media — all of which spell opportunities for GlaxoSmithKline (GSK) Malaysia, despite the wider, more challenging macroeconomic environment.

Which is why the healthcare group is expecting its consumer healthcare sector in Malaysia to register a double-digit growth this year, as it moves to strengthen its market share via new products and innovating old ones. For example, its traditional mainstays like the Scott’s Emulsion cod liver oil will be on shelves from July onwards in the form of flavoured chewable gummies too.

“Our growth will be strong double-digit growth for Southeast Asia. Malaysia is our biggest market in Southeast Asia, so Malaysia must grow for our Southeast Asia market to grow,” GSK Consumer Healthcare Southeast Asia vice-president and general manager Debjit Rudra told The Edge Financial Daily recently.

GSK’s second-largest market in Southeast Asia is Indonesia, followed by Thailand.

Panadol is the company’s biggest contributor among its portfolio of products here. Panadol now holds over 90% market share in the paracetamol category in Malaysia, said Debjit.

But GSK isn’t relying on Panadol alone to secure the double-digit growth it is targeting. It expects growth across all the five categories of products it is in, namely pain relief, respiratory, nutrition, gastrointestinal, oral health and skin health.

“You can see with things like Scott’s, there have been innovations. We launched an oral health product in the beginning of the year, so growth will be driven by all of those [new products],” he added. The company also launched its Sensodyne brand of mouthwash early this year.

Hence, notwithstanding the challenges presented by the likes of the weak ringgit and the goods and services tax, which has dampened consumer appetite, GSK Malaysia remains optimistic about its growth opportunities, said Debjit.

Chief among the reasons why, besides the often-cited climbing healthcare costs, is an ageing population that is increasingly looking into self-medication, and room for growth for the respective market segments GSK’s products are in, said Debjit.

“An example is Physiogel, which treates sensitive, hypoallergenic skin. One in two people has sensitive skin issues and Physiogel is still a small product, so there is [a] huge opportunity to grow,” he added.

“All of these [factors], put together, are fuelling growth for the categories we are operating in. [These are] trends that are specific for the healthcare industry. I think we are in a good position,” he added.

GSK made its foray into consumer healthcare after entering into a three-part transaction with Swiss multinational company Novartis AG in April 2014.

Under the transaction, GSK acquired Novartis’ global vaccine business (excluding influenza vaccines) for US$5.25 billion, created a consumer healthcare joint venture with Novartis in which GSK holds majority control with a 63.5% stake, and divested its oncology business for US$16 billion.

In 2015, the group’s consumer healthcare segment constituted 25% or £6 billion of its global turnover.

The bulk of the group’s business came from the pharmaceutical segment at 60% or £14.2 billion, while the vaccine segment commanded the remaining portion of 15% or £3.7 billion.

“The consumer healthcare business has been performing very strongly. It was very strong growth and very strong profitability for last year, considering the challenges,” Debjit said.

Debjit attributes the strong growth in consumer healthcare to the company’s commitment to research and development (R&D), rather than price wars or promotions, and working within niche markets to cater to specific consumer needs.

He said the group’s global investment in R&D last year was £3.1 billion.

“We have competition, but what differentiates us from other companies is our background of science,” he said, citing Sensodyne and Physiogel as examples of catering to specialised needs of sensitive teeth and hypoallergenic or dry skin respectively.

“Our businesses are quite niche, but these are big need areas,” he added.

“Our way of winning in this market is through science and telling consumers about it. We do not play the game of price or the game of promotions,” he added.

As for new markets in the Asia-Pacific, Debjit said the group just gained a footing in Laos this year, and is eyeing to expand within other markets, such as Indonesia, the Philippines and Cambodia.

“Take the case of [the] Philippines. There are so many provinces, so many smaller markets where there is a lot of room for us to penetrate and a lot of room to grow our business,” he said.

“There are lots of opportunities to go into smaller cities, and create the awareness and build our business,” he added.