At a time when most industrial sectors are reeling under recessionary pressures, the wellness industry in India has successfully managed to buck the trend. Its unorganised segment - including mostly small and regional players who comprise more than 50% of the wellness market - has continued to maintain a steady growth rate despite the challenging times. Going by the present demand for these services in the country, the prospects for smaller wellness and healthcare firms seem bright for the coming years.
The growth drivers
Though the wellness sector in India is still in a nascent stage, it has been growing at a phenomenal rate over the past few 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 annum. This growth is expected to be fuelled by the small and mid-sized wellness centres and spas that are mushrooming across the country.
"The growing demand for wellness therapies, beauty and Health Care Products, fitness, slimming and rejuvenation programmes and cosmetic surgeries among women as well as men in India has prompted several small and mid-sized companies to enter this burgeoning market. In addition, specialisation in the beauty and wellness sector is proving to be a big money-spinner for several doctors and cosmetologists who have set up their own small clinics and salons," commented A Nandi, Head of Dermatologist Department, Rita Skin Foundation, a small-sized clinic offering specialised skin treatments in Kolkata.
The sector is also drawing the interest of a number of investment firms. These are looking to make huge investments in innovative projects in the sector in order to get rich dividends in the future. Some of the wellness andBeauty Companies are also tying up with hospitality majors, while others are expanding their services portfolios to draw more customers.
Given the positive outlook of the wellness industry due to favourable demand and market dynamics, the SME players in the sector are expected to earn healthy revenues in the next few years.
"Changing lifestyles, encouraging market demographics and rising consumerism are likely to spur the growth of small players in the wellness sector. The 'looking-good and staying-healthy' mantra is fast catching the fancy of most Indians. Moreover, the wellness industry is a self-driven sector, fuelled by demand from within the economy rather than external factors," commented S Malhotra, an executive working at Thai Spa in Kolkata.
Despite the encouraging business prospects predicted for SMEs in the wellness industry, it is recommended that they tread with caution and maintain a competitive price point to withstand the stiff competition posed by big players. Diversifying their product lines and service offerings as well as expanding their networks will also enable SME wellness firms to take hold of a greater share of the booming beauty market.