Even with one of the lowest per capita Gross Domestic Product (GDP) in the Brazil, Russia, India and China (BRIC) region, India is poised to overtake China as the most populous country along with the largest number of undernourished children and diabetic population in the world, representing an extremely favourable market for the growth of nutraceutical companies. Currently Indian nutraceuticals market is highly urban centric. However with the rise of rural market and if the growth trajectory remains the same, as per IKON’s projections Indian nutraceuticals market is poised to be worth Rs 38,590 crore by FY 2017-18 and by FY 2019-20 the market may become five-fold since the beginning of decade, valued at Rs 54,740 crore .
Overall, the Indian nutraceuticals market is emerging with strong growth potential. With escalating health awareness, and shift towards preventative healthcare and increased regulatory clarity, India’s future looks promising, for both manufacturers and consumers. As per IKON’s estimates, Indian Nutra industry likely to grow at compound annual growth rate (CAGR) of 19% by 2020 if the growth trajectory remains same.
Opportunities and strengths
The major opportunity poised by increased consumer base due to shift in demographics of India with increased disposable income and increased awareness about nutraceuticals in India. The growing demand of nutrients among upper and middle class segments has created opportunities in various food and personal care product segments. Prebiotic and Probiotics are gaining popularity in various dairy-based products. Cosmeceuticals and Botanicals are also gaining momentum and likely to boom in coming years.
To harness the above opportunities, the nutraceutical industry should have strength of building and delivering perceived value to target segments. Today’s customer is more knowledgeable and expects value for money in the form of result. They should focus more on increasing adoption rate of such products among upper and middle class of urban and rural consumers. Apart from affordable pricing, communicating results rather than benefits will be best strategy to persuade consumers for adopting it as still Indian consumers try such products seeing results gained by referrals or influencers.
Challenges and threats
Winning and gaining share of stomach will be the major challenge the companies can face in coming years as many domestic and foreign players are entering nutra segments looking at lucrative growth opportunities, introducing various food and personal care products for daily consumption. In coming years, shelves will be full of nutra products giving opportunities to customer selecting from many alternatives. Here ultimately the game will be to attract and retain customers.
Apart from tough competition, the ingredients and raw material contamination is a major threat that could pose a challenge to the growth of nutraceuticals market in India.
The government can support this growing market by launching public campaigns and some schemes to make India healthy. In addition, the clarity in the regulatory environment and the tax structure will help the market to grow further. Apart from these, government should control marketing of nutraceuticals products as often health and nutritional claims touted in labelling and advertising for nutra products provide fertile ground for ‘consumer fraud’ claims.