Is this the most opportune time to ride the Indian Nutraceutical growth wave?

The Nutraceutical market in India is witnessing unprecedented growth in the last couple of years. The covid pandemic has led to  the focus shift from diagnostic healthcare to preventive healthcare. This has meant that the nutraceutical market grew by more than 20% in the post covid era in India, whereas the worldwide CAGR is around 8%. The growth can be majorly attributed to the segments of Diabetic Care, Women’s Care, and General Health and Wellness. Due to the increased demand, the industry is heavily dependent on imports to cater to the supply shortfall. This has also meant the rise of many new-age startups in this sector which have grown at a rapid rate in this period.
As per the DF index, diabetic care as a segment does around 50-100 Cr monthly online sales in India. Amazon dominates this category in all marketplaces including the likes of Pharmeasy, 1MG, and others. A start-up that has come up trumps in this category is Kapiva which as per the DF index has around 4-8% share in the diabetic care segment, especially with its strength being predisposition in diabetic care. Founded in 2016, specializing in Ayurvedic weight management juices, this brand has quickly developed a niche. The bestselling SKUs for them include Kapiva Diafree and Get Slim Juice, Amla Juice, Karela Jamun Juice, and Tulsi Giloy Juice.

The second subcategory that has shown tremendous potential is the Women’s care category which comprises micro categories such as Beauty, Pregnancy, Nursing, and Sexual health supplements. The women’s care subcategory is even bigger than the diabetic care segment and Oziva among all startups has come up as a leader in this space. With a special focus on the Amazon marketplace, Oziva holds around a 10% market share as per the DF index in this subcategory. The areas in which Oziva is strong include Sexual Health Supplements, Beauty oral products, and Women’s General Health. Started in 2016 by Aarti Gill, Oziva has an annual revenue run rate of more than 100 Crore with most revenue coming from marketplaces such as Amazon, Flipkart, Snapdeal, Nykaa and 1MG. Their natural protein powder and Hair Vitamin Capsules are the top sellers. Within 5-6 years of inception, they have displaced or given tough competition to older brands such as Horlicks, Protinex, and even Healthkart Private Labels.

Another startup focussing on Women’s health and especially period problems is Gynoveda. Starting in 2018, within 4 years the startup has come out as a leader in the sexual health supplements for women and as per the DF index they command 12-18% in the sexual wellness for women category on marketplaces. Genova PCOS PCOD Ayurvedic Medicine For Delayed Periods, Acne, Weight Management, Facial Hair, and other symptoms is their top seller in this category.

Although there is a rise of Indian startups in the Nutraceutical space, the segment does have its challenges. The high GST slabs on dietary supplement products, sourcing of raw materials, and strict regulatory approvals mean that getting into the space requires its fair share of pre-launch work. However, as the D2C story in India unfolds, the new entrants are able to demonstrate that they can displace international incumbents in the vertical. With the rise of the middle class and easier access to international funding, the time is ripe to venture into new avenues in the nutraceutical space as it grows towards a massive 18-20 billion dollar industry in the next five years

Author: Abhimanyu Vyas, Co-Founder, DeepFlux