We recently talked here about ethical consumers—consumers who are concerned about how the products they consume affect the environment and are often willing to spend more to support the causes they believe in. These same consumers are more likely to be conscious about the impact the products they consume have on their own health and take proactive actions to better it. As I will show in this post, based on the finding of a report published by McKinsey, the emerging health and wellness market in developed and developing countries creates a great opportunity for large and small businesses.
In the article “Healthy, Wealthy and (Maybe) Wise: The Emerging Trillion-Dollar Market for Health and Wellness” (published by McKinsey & Company Consumer and Shopper Insights in May 2011), writers Cloos, Ebrahim, Griffin, and Teichner identify three key trends that companies must recognize and adapt to in order to be successful in the changing health and wellness market.
The first important trend is the change in the consumer market. The emerging economies change the market. The middle class in countries like Russia, China, India, and Brazil is expanding rapidly (as pointed out in the article, over the last decade the number of Indian households making more than $22K a per year has quadrupled). The populations in the emerging economies are rapidly growing as well. In the growing economies the health risks change from illnesses such as malaria to health risks caused by the modern lifestyle like obesity. Another important change is the growth in the over-sixty population. These two significant changes (rise of the middle class in the emerging economies and growth in the aging population) indicate that wellness is the next big market, as employers will invest in healthy living programs for their employees and consumers will spend more money in order to optimize their health.
The second trend identified in the article is that consumer behavior and attitudes are changing. Advancements in technology and science have opened the traditional and non-traditional (e.g. herbal medicines) medical solutions to a broader span of global consumers. Technology provides more access to medical information to the consumers. According to information shown in the article, as much as 96 percent of Americans have used the Internet to look up medical information and 50 percent of French purchase health and beauty products online on a regular basis. This trend also affects the emerging economies—70 percent of Chinese consumers research on the Internet before making a purchase. Due to the ongoing economic crisis, more consumers purchase private labels and many of them like them. In the over-the-counter (OTC) market, the share of private labels has risen from 20 percent to 25 percent from 2007 to 2011.
The third and final trend identified in the article is that the business landscape is changing. The big drug-store chains in the US are picking up a big share of the market. In many EU countries and China, modern formats are popular. In the emerging markets, local players are the strongest in the market. The players across the markets broaden their offerings in health and wellness by offering the customer more services. At the same time direct selling is big and growing (in Brazil in particular). Diverse players like private-equity firms and global corporations (like Google and Nestlé) are entering the sector and changing it.
In conclusion, the health and wellness market is growing rapidly due to every person’s desire to feel good and healthy. The trillion-dollar mark seems closer than before. However, in order to succeed companies must recognize and adapt to these three trends.