Evolving Face of Indian Wellness
Narinder Kumar, Group CFO, VLCC Health Care, on the future of the beauty and wellness industry
India has seen a remarkable transition in its middle class population with more than one-third likely to reach the aspirer class by 2020. Three in five households in India are now nuclear families. Thus, the demand pattern of the rising middle class population clubbed with rising income levels and aspirations for a better lifestyle have opened up a window of opportunities for consumer products and services providers. Also, there is a shift towards the importance and understanding of wellness in India, which can be attributed to younger consumers who value health more than the habit of hoarding material goods and to the growing realization that given the rising cost of curative healthcare, it is prudent to invest in preventive health care.
The beauty and wellness industry has experienced robust growth in recent years. Today we see the market dominated with apps, at-home beauty services and exclusive tie-ups with global brands to bring products and services to the doorsteps of Indian consumers. Beauty and wellness is a USD 3.7 trillion global industry - a number that speaks volumes about people's eternal quest to look attractive and youthful. Back home, the beauty and wellness industry in India is growing at a CAGR of 18.6% and is expected to cross INR 70,000 crores by 2017. Also, given that the Indian beauty industry is growing at an unprecedented rate, the opportunities for career growth in this domain for both salaried employees and self-owned businesses are enormous. By 2022, the Beauty and Salon services segment alone will require a workforce of 121 lakhs.
The biggest challenge for this sector is skilled manpower. The beauty and wellness services sector in India is largely unorganized and fragmented, with inadequate attention paid to quality and processes. KPMG’s Human Resource and Skill Requirement report for the National Skill Development Corporation (NSDC) states that the workforce requirement in this sector was likely to triple to 14.27 million by 2022.
The challenges faced by the Indian beauty and wellness domain are in large measure similar to those faced by other sectors in terms of the inadequate availability of training infrastructure, the absence of quality trainers in sufficient numbers, and not getting easier financial access to outcome-linked skill development initiatives. The fact is that the sector is still largely fragmented, with a limited number of companies in the organized space.
The Government has been very supportive in helping the beauty and wellness sector become more organized and raise the pool of skilled and certified professionals. Apart from the NSDC funding for the establishment of the industry-led Beauty & Wellness Sector Skill Council (B&WSSC), the Government has been actively engaging with the industry leaders to work out ways through which the sector could play an active role towards India emerging as the ‘Skills Capital’ of the world by 2022. The seriousness that the Government accords to this domain is also evident from the fact that the Beauty & Wellness Sector Skill Council has a presence in the Steering Committee of the Pradhan Mantri Kaushal Vikas Yojana (PMKVY).
Skill development affords the best possible opportunity through which India may leverage its favourable demographic profile to achieve a quicker and more inclusive growth. Equipping young people with the skills that would enable them to find the jobs of their choice or become gainfully self-employed would not only help youth improve their stations in life but also more importantly lead to an overall improvement in various human development parameters of the country. Given that the wellness sector employs more women than men, the industry also contributes in a big way to the cause of women empowerment.
The PMKVY is a great initiative of the Government of India to make the skills culture take deep roots in the country. Incentivizing employers who hire youth who have undergone training under the PMKVY scheme could be one of the ways the initiative could become more popular with job-givers.
Beauty and wellness industry has been at the forefront of preventive healthcare. As a result, the industry in unison has been requesting the government to incorporate budgetary interventions to ensure that general well-being of the masses is taken care of and the incidence of preventable diseases comes down drastically. India is on its path towards becoming the diabetic capital of the world. If drastic measures are not implemented immediately, then the per capita expenditure on medical care for 1.3 billion people will be a major stumbling block for the growth of the nation. Therefore, the lowering of tax rate for preventive health care services, e.g. to prevent various disease including obesity which results in hypertension, diabetes and heart attacks, amongst other critical ailments.
With the Cabinet giving its nod to GST bill, healthcare services and health insurance premiums should be exempted from GST to ensure easy accessibility for people at large. This move will propel people to seek for medical assistance at an early stage, to ensure early detection and treatment of diseases. Also as per a recent FICCI report, wellness will be a key growth driver of health insurance in India.
At the same time, the industry remains hopeful that the Government will introduce schemes to bring preventive healthcare and wellness services under health insurance coverage and also increase tax exemption limit. This should be undertaken as India's population is increasingly at a higher risk of lifestyle diseases such as diabetes, heart disease, blood –pressure, obesity, and hypertension. Consequently it becomes essential for us to focus on preventive healthcare by making quality medicines available at affordable prices and also through investment in preventive healthcare measures.
On the other hand, consumer demand is now at that level where innovation is going to become key to the future of this industry. Many companies are fusing beauty with wellness and beauty with technology. We are already witnessing the growth of technology in the manufacturing of beauty products as well as in salon services, like applications of scientific analysis of the skin and hair to guide clients. Natural beauty care will continue to rule by becoming a major international trend. Brands will go for greater interaction and involvement with consumers, through social marketing. In parallel, with Ayurveda knowledge, India can lead the international cosmetic industry in the near future.
Recent years have been dotted by global economic tightening and geopolitical events, but the ‘wellness economy’ has kept growing, with an upward trajectory that seems unstoppable. For an industry, where ‘feeling good is the new looking good’, the time has come for the beauty and wellness domain to be recognized as an industry which generates large numbers both in terms of revenues as well as employment.
The opinions expressed in the article are the author’s own.