By IANS,
New Delhi : Estimating India’s market for “wellness” services at Rs.110 billion ($2.2 billion), a report released Wednesday has projected this industry to grow at an annual rate of 30-35 percent.
“This growth is expected on the back of favourable market demographics, consumerism, globalisation, changing lifestyles, increasing availability across categories and regions and rising awareness among people,” says the joint report of the Federation of Indian Chambers of Commerce and Industry (FICCI) and Ernst and Young.
The report classifies the wellness industry into seven core segments within different products and services, such as allopathy, alternative therapies, beauty, counselling, fitness and slimming, nutrition and rejuvenation.
“Given the favourable demand and supply dynamics, wellness presents strong business potential,” said Farokh Balsara, partner for advisory services with Ernst and Young.
“With this report, we have sought to present a comprehensive picture of the complete wellness economy, comprising users, service providers and the facilitators, the challenges faced by each one and the way forward for each of these stakeholders, to successfully ride this wave.”
According to the report, the increasing level of activity is arising from the entry of several providers such as organised Indian and international players, expansion by existing companies, strategic alliances and interest among private equity investors and hospitality and realty industries.
In terms of payback and gestation periods, products such as health foods and drinks, dietary supplements and alternative medicines require greater investments, normally exceeding Rs.250 million or more, says the report. Payback periods range from three-six years.
At the same time, services such as ayurveda treatment, alternative treatment centres and salons require much lower investment and also have lower payback periods of up to three years.
When it comes to regions, the south is much ahead in terms of indicative concentration for the organised wellness-based centres per household: 34.4 centres per 100,000 households, compared with 13.6 for the north, 12 for the west and 10.1 in the east.
The report attributes south’s lead to the presence of more alternative therapies-based centres.
There are also clear customer preferences in each region with regard to each segment – alternate therapies are the most popular choice of people in southern India, while customers in north are inclined towards beauty. The maximum number of fitness and slimming centres are in the west.
The report shows that across segments, on an average more than 50 percent of the market is unorganised and highly segmented with several small and regional players.
While ayurveda and alternative treatments are predominantly unorganised, health foods and drinks and dietary supplements are more organised. The larger service providers face a challenge from the presence of the unorganised sector as it puts tremendous pressure on pricing and therefore margins.