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Economic recovery brings rapid rise in consumer health sales

By Anatol Steven. 15.05.2013

Ancient Greek vase
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Rise in sales of expensive health remedies and other consumer health products

Rapidly recovering domestic consumption in Latvia is contributing to growth in sales of consumer health products. In particular, sales of more expensive remedies better suited to individual needs are increasing.

According to market research analysts Euromonitor International, people’s ability to afford products of higher quality with specific content are resulting in switches from mainstream products to more expensive medications.

The trend of households allocating more money to consumer health is expected to persist in the coming five years, the research body says in its new report, the Latvian Consumer Health Market.

As domestic consumption recovered from the 2009 economic crisis, strong growth in consumer health sales was seen in 2012. 

“Rising real disposable income and growing optimism about the economic outlook resulted in higher spending on discretionary health remedies, consumption of which was postponed during the economic crisis in 2009-10,” the report says.

During the economic downturn, Latvian consumers focused only on remedies that were crucial for health, the report stresses. But in 2012 a trend was seen where people renewed their earlier abandoned purchases of various remedies, including herbal and traditional products, sports nutrition and dermatologicals.

This means that domestic and international players are seeing what the report calls “robust growth within all categories”. This growth has derived from the successful performance of their core brands. There were relatively few new launches during 2012 as firms focused on strengthening the positions of their existing products. But products introduced during 2010-12 saw a rapid expansion.

“Faced with intensifying competition, companies applied intensive advertising campaigns on television to retain existing customers and attract new clients. Discount-based competition was less prevalent compared to previous years,” the report says.

Interestingly, grocery retailers are seeing their market share increase as consumers in Latvia become less reluctant to buy medicines, vitamins and dietary supplements through channels other than pharmacies. As a result, the variety of different remedies available at the biggest retail outlets substantially increased. Internet retailing is also experiencing growth, taking place at the expense of pharmacies, although internet sales of these products remain very low. 

[pictured: Physician treating a patient; red-figure Attic aryballos, c. 480-470 BC]




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