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Wellness & Nutraceuticals: The Growth Drivers

Nearly 55% of the gross Direct Selling Turnover in India comes from the Wellness category.

With a definite change in consumer preferences in the Covid-era along with a surge in digital penetration, the Indian Direct Selling industry has been making rapid growth in the last few fiscals. In the times of physical restrictions, technology has helped all the businesses to remain aligned with consumers and has enabled the Direct Selling industry to achieve a much-needed transition from physical ways of doing business to digital modes in an innovative and efficient way.

Consumers care deeply about wellness and their interest is growing. According to McKinsey’s latest estimates, the global wellness market stands at more than $1.5 trillion, with annual growth of 5 to 10 percent. This rise in consumer interest and purchasing power presents tremendous opportunities for companies, particularly as spending on personal wellness rebounds after stagnating or even declining during the COVID-19 crisis, says McKinsey Research. This shift in consumers’ focus towards being healthy and adopting a healthy lifestyle, has been a boon for the direct selling companies, many who focus on Wellness.

Consumers in every country including India are now willing to spend on products and services that promote better health. The biggest spenders are now those who are paying huge attention to health and wellness as socially responsible citizens and consumers. The majority of consumers are now being attracted towards health and beauty supplements, nutraceuticals among other wellness products.

The health and wellness industry offers huge room for growth for all sorts of players including nutraceuticals. Direct selling entities are leveraging its strengths with deep channel relationships, brand loyalty with digital know-how, integrated consumer data, and an agile operating model.

Wellness category which includes products such as weight management supplements, nutritional supplements, immunity boosters, vitamins, among others is the largest product category in Direct Selling globally contributing one-third of the global Direct Selling sales in 2018. According to the IDSA Annual Survey (2018-19), wellness category products have been contributing nearly one-third to total sales globally since 2015. The category contributed 34.5 %, 34.60%, and 33.2 % in 2016, 2017 and 2018 respectively. Wellness category is closely followed by Cosmetics and Personal Care which includes products such as cosmetics, skin care, fragrances etc. contributing 31% of the global Direct Selling sales. These two categories combined contribute around two-thirds of the global Direct Selling sales in 2018.

Increased awareness about health products is the main reason for direct selling entities expanding their capacity to meet the growing demand for such products. Hence, it is not surprising to note that 57% of the gross Direct Selling Turnover in India comes from the wellness category, as captured in the IDSA

Annual Survey Report (2019-20). Over the years, direct selling companies have created a robust delivery system that supports in-home delivery of goods and during the COVID-19 crisis, this system came as a big relief for the consumers.

Going forward, as wellness & nutraceuticals products have been driving the growth over the years, the industry expects a progressive policy framework at par with international standards. In August 2020, the Food Safety and Standards Authority of India (FSSAI) issued Guidelines on health and nutraceuticals products with all details. The Guideline Note aims at regulating the licensing and registration of the products, business, packaging and labelling methods, standards, and additives used. The new guidelines look progressive. However, some rules act as limiting factors for the nutraceuticals as the criteria make some of the health supplements fall into medicine categories. The segment (Nutraceutical) has now reached a stage, where it should treat as an independent entity and the policy, norms, and rules need to be based on its functioning and impact. A rational policy framework would act as a catalyst for the industry to thrive and grow at a faster pace.

The robust growth of the segment manifests a reality and trend that wellness is here to stay as consumers plan to spend more on personal health and wellness. The COVID-19 crisis and new normal have further pushed the trend and taught everyone that physical and mental health will remain a priority for millions of people across the globe for a long time to come.


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