The nascent Ayurveda market is witnessing significant growth.
The healthcare market in India is evolving at a rapid pace. According to reports, it is one of the fastest growing industries with an estimated compound annual growth rate (CAGR) of 23% from 2015 to 2020. With the rise in healthcare expenditures, patients are exploring other healthcare alternatives. India’s oldest medical system, Ayurveda, has been flourishing for the last 5000 while witnessing many waves of evolution. The nascent Ayurveda market is witnessing significant growth and is moving at a considerable pace, gaining immense popularity of late.
Shifts in healthcare expenditure and disease profiles provide Ayurveda with a golden opportunity to be positioned as the treatment of choice for non-emergency medical care. The Ayurveda product segment has been flourishing in India for decades. Ethical products like classic Ayurveda, fast-moving consumer goods (FMCG) and personal care products (including cosmetics) are the major categories being retailed. Retail franchising has provided a big push towards the launch of Ayurveda companies.
Market in India
Earlier, Ayurveda-based products were limited to hair-oils and Chyawanprash, and over-the-counter palliatives. With fewer products available in the market, the ayurvedic market became stagnant.
However, in recent times, brands such as Patanjali, Sri Sri Tattva and others have launched their ayurvedic products in various segments, ranging from shampoos, skin care creams, oils, and powders, toothpaste, gels, and soaps to cough syrups, teas, packaged juices, and nutritional supplements, among other FMCG products.
These products became an instant hit among all age groups, but especially India’s millennial; both urban and rural population and are increasingly becoming more and more aware of the benefits of these products, making them their first choice.
In the past few years, there had been an explosion of chemical-based products, which was a drastic shift. The earlier generations were more inclined towards homemade and natural products. There were many instances where it was found that cheaper varieties of the products used harmful chemicals that resulted in disastrous results. People now are again opting for ayurvedic & natural products unless they are beyond their reach.
The increased awareness has contributed to consumers understanding and appreciating the connection between health and ayurvedic products. They realise through theirs or others’ experiences, using safe and natural products can save them a lot of pain and expenses on medical treatments later.
According to industry estimates, India’s natural products’ segment comprised of 41 percent of the personal care products market. Tier 2 and 3 cities grew the fastest at 9 percent followed by 8 percent growth in value at major metro cities.
The wider application of Ayurvedic practices began more than a decade ago with the emergence of a new player in the FMCG market – Patanjali Ayurved Limited. The brainchild of Yoga Guru Baba Ramdev, Patanjali brand became a sensation in the FMCG market and increased the popularity of ayurvedic products. The brand took the franchising route to increase its presence across India. Capitalising on the success of Patanjali’s Ayurveda branding, Sri Sri Ravi Shankar, spiritual leader of the Art of Living movement in India, launched his own FMCG brand, Sri Sri Tattva.
Sri Sri Tattva also followed the footsteps of Patanjali and took the franchising route to expand its roots in India and internationally.
The franchising models of both the brands are quite flexible and easy to adopt and have low-cost options, for small-town entrepreneurs. For instance, Patanjali has three franchise schemes; GramodhyogNyas, Patanjali Mega Store and PatanjaliChikitsalaya&Arogya Kendra. For starting a Patanjali megastore you will require an initial investment of Rs. 50-60 Lakh depending upon the sq. ft. area, with a minimum area of 2000 Sq. ft.
Sri Sri Tattva offers three types of stores – Sri Sri Tattva Mart (retailing packaged food, personal, and home care products); Sri Sri Tattva Wellness Place (access to healthcare practitioners and health and wellness services); and Sri Sri Tattva Home and Health (retailing daily use products, Ayurveda medicines and access to Ayurveda doctors).
The investment ranges from 10-20 lakhs, with a required area of 200-400 sq.Ft for either of the two franchisee options. The anticipated percentage return on investment is 50 per cent.