At a time when most industrial sectors are reeling under the pressures of recession, the wellness industry in India has managed to buck the trend. Its unorganized segment, which includes mostly small and regional players that comprise more than 50% of the wellness market, has continued to maintain a steady growth rate despite difficult times. Judging by the current demand for these services in the country, the outlook for smaller health and wellness firms looks bright for the next few years.
The drivers of growth
Although the wellness sector in India is still in its infancy, it has been growing at a phenomenal rate in recent years. A joint report by the Federation of Indian Chambers of Commerce and Industry (FICCI) and Ernst and Young has projected that this industry will grow at an exceptional rate of 30-35% per year. This growth is expected to be fueled by the small and medium-sized spas and wellness centers that are proliferating across the country.
“The growing demand for wellness therapies, health care and beauty products, fitness programs, slimming and rejuvenation and cosmetic surgeries among women and men in India has prompted several small and medium-sized companies to enter this booming market. In addition, specialization in the beauty and wellness sector is proving to be a great source of income for a number of doctors and cosmetologists who have established their own small clinics and salons,” said A Nandi, Head of Department of Dermatologists, Rita Skin Foundation, a small clinic offering specialist skin treatments in Kolkata.
The sector is also attracting interest from various investment firms. These seek to make large investments in innovative projects in the sector to obtain large dividends in the future. Some of the wellness and beauty companies are also linking up with major hospitality companies, while others are expanding their service portfolios to attract more customers.
Given the positive outlook for the wellness industry due to favorable demand and market dynamics, SMEs in the sector are expected to earn healthy revenues in the coming years.
“Changes in lifestyles, fostering market demographics and increased consumerism are likely to spur the growth of small players in the wellness sector. The ‘look good and stay healthy’ mantra is quickly catching on imagination of most Indians. Furthermore, the wellness industry is a self-directed sector, driven by internal demand from the economy rather than external factors,” said S Malhotra, an executive with Thai Spa in Kolkata.
Despite the promising business prospects anticipated for SMEs in the wellness industry, they are advised to exercise caution and maintain competitive pricing in order to withstand stiff competition from large players. Diversifying their product lines and service offerings, as well as expanding their networks, will also allow SME wellness companies to capture a larger share of the burgeoning beauty market.
