Why this is the right time to invest in wellness industry

The Indian wellness market, pegged at over Rs 800 billion, is said to be growing by 20 to 30 per cent each year. Wellness and beauty brands have now started stretching out to Tier II and III cities as well. Changes in lifestyle and consumers becoming more health conscious are primary factors that have added to the growing demand for not just services but health products too.

Let’s get you some solid reasons as to why you must consider investing in the wellness industry.

The widening scope of wellness and beauty products

Yoga guru Baba Ramdev’s Patanjali is a success story as far as the market of natural wellness products is concerned. Its sales grew 150 per cent in FY 2015-2016 with over 4,000 stores spread across the country. The brand’s ‘We are natural and healthy’ strategy, strong word of mouth publicity and aggressive expansion have worked well in making Patanjali a brand worth Rs 5,000 crores. More wellness products such as protein shakes, energy bars and detox drinks are much in demand. Online retail has also added to the glory of the wellness products market. Wellness products constitute a major portion of the wellness industry amounting to almost 60 per cent. Distributorship of such products certainly holds key to great returns and is something aspiring entrepreneurs must look forward to.

Growing demand in Tier II and III cities

The year 2013 saw a huge rise in the number of brands reaching out to tier II and III cities. According a PwC report, big players opened over 50 per cent of their new stores in Tier II and III cities. This rise has been a result of rising incomes and increasing awareness among the masses. Franchising is becoming an increasing trend in the wellness and beauty industry and has enabled the widening of the reach of this industry. It’s an opportunity that aspiring entrepreneurs can bank upon.

Dot com boom and at home services

The retail sector, the restaurant sector and the likes have leveraged the dotcom boom to their advantage and the wellness and beauty sector is not far behind. One stop shop websites, fitness apps and at-home services have seen growing demand in the past three years. Startups are making the best of this opportunity.

“People’s health is deteriorating in the country and there is a disposable income. Still people are thinking and are getting serious about their fitness actually. Since, this industry is opening up now and people are becoming serious about their health and there is a lot of opportunity for the start-ups to fill this gap,” said Amresh Ojha, Founder, Gympik.com.

Cut-throat competition = Expanding brands

Looking at opportunities within India’s wellness market, a number of global players like Anytime Fitness have entered the industry. The existing international brands like Fitness First and Gold’s Gym, and domestic brands like Talwalkars have also multiplied in numbers. “We do give preference to Tier II and Tier III locations with population of minimum 3 lakhs, as they are up-coming and with low rentals which ultimately reflect in higher EBIDTA,” said Amrith Rao, CEO, Talwalkars Franchising Division- HiFi brand.

Grabbing one of these brands is definitely a potential avenue for those looking at a sure shot kickstart in the wellness industry.

Government support in wellness – The inception of AYUSH

The current government has been showing keen interest in the wellness industry. It has in fact set up a separate ministry called AYUSH (Ayurveda, Yoga & Naturopathy, Unani, Siddha and Homeopathy), besides making Yoga free of service tax. This has opened newer avenues for investors now eyeing the ancient forms of wellness as a huge opportunity. It is this wave of Yoga and Ayurveda that brand Patanjali has been riding high on.

A Deloitte-IHRSA report said that there are 4.8 million fitness seekers across Mumbai, Delhi and Bangalore. This means that while new demand is coming up in Tier II and III cities, the demand in Tier I cities is touching new heights. While the unorganised set-up of the wellness industry remains a challenge, international brands as well as newer systems of operations are gradually bringing uniformity to it, making the wellness industry an investor’s go-to place.

As G Ramachandran, Promoter & Director, Gold's Gym India, puts it, “The industry is unorganised with a large number of mom and pop gyms existing across India, along with very few global players. The sector is fragmented and there is a dire need for consolidation into an organised sector. However, the mom and pop structures are giving way to organised retailing in the gym business and it is felt that this process will accelerate in coming years and will open adequate opportunities for global players like us.”

(With inputs from Niharika Verma)