Wellness sector bucks industry trend
Rachna Nath, Leader, Retail and Consumer, PwC India
Even as consumer expenditure has grown at its slowest rate in the last 8 years, the wellness sector has bucked the trend and continues to grow from strength to strength. Resilience in consumer spending on wellness products and services is a reflection of increasing consumer awareness and acceptance of wellness as an integral part of their lifestyle. The large 700 billion INR opportunity offered by the Indian wellness industry has sparked the interest of global and domestic entrants into this space, even as incumbents are directing their efforts on scaling up operations.
While industry prospects still remain bright, companies are fine-tuning their business and operating model in order to drive sustained revenue growth and ensure profitability. It is interesting to note how players are juggling multiple brands to create distinct value propositions for diverse customer segments. Cost rationalisation is high on the agenda for many companies in this sector — rising inputs costs due to global inflation, volatility in currency movements, high rentals and attrition are putting increasing pressure on margins of industry players.
Corrective measures to tackle challenges have been introduced in the past. However, factors such as low consumer awareness and execution challenges around certification have limited the industry from achieving its desired results. It is important for industry stakeholders — private participants as well as the government—to take collective action around creating an adequate pool of trained, certified and reliable talent for the sector, and improving the effectiveness of mechanisms to monitor and regulate quality standards in the industry.
The wellness industry is expected to cross 1 trillion INR by 2015, marking a significant milestone for this sector in India. This has sparked increased levels of interest from the investor community and consequently, increased availability of funds is likely to propel deal activity in this space.