If there is one thing India is famous for, it is the authentic Ayurveda. It is an old science that comprises of a lot of herbs. These herbs, if taken wisely, can even increase one’s height. Ayurveda has been around for over 5000 years and doesn’t seem to lose its popularity. This industry is not secluded to a few major players, unlike many other business segments. Instead, the trade of Ayurvedic products is more global than anything else. As the majority of population of the world is now moving towards an organic way of living, Ayurveda and all that it entails, is on a roll.
Ayurveda is a combination of a lot many herbs, plants, medicines, liquids and other substances that are known to have completely natural compositions. Most of the ayurvedic products are already being used in our everyday lives. Things like turmeric, seeds of cumin, coriander etc are all extremely therapeutic, you just need to know their right usage. Most importantly, none of the ayurvedic products have any side effects. This gives them an edge over all the western medicines of the world. Various scientists, seers and gurus have developed the system of Ayurveda based on their experiments, various observations, meditations and other studies of nature. Unlike the western medicines, the focus of Ayurveda is not just to cure one particular ailment, but to treat your body, soul and spirit as a whole. Apart from ayurvedic medicines, various massages, metals and stones can also be used to cleanse your body and mind from all the toxins feasting on you.
Ayurveda recognizes that, the god almighty is all that matters. The laws of mother nature take precedence over everything else. By the use of various ayurvedic products, we are not only curing our ailments, but also promoting a better balance of nature. More than the tablets and capsules available over the counter, majority of people today are opting for ayurvedic methods of treatment. In many cases, ayurvedic medicines are becoming the first choice of patients. Patanjali has been a total game changer in the trade of ayurvedic products. Once it set foot in the Indian market, Patanjali rocked the world of all its competitors. Run by the famous yoga guru Baba Ramdev, Patanjali has long since crossed the 20 billion revenue mark.
What started as a small pharmacy of herbal products in the small town of haridwar, has now become a worldwide sensation. It was just a few naturally made medicines in the beginning, but now, Patanjali is the manufacturer of more than a couple dozens of FMCG products. All the successful companies had to bow down to the force that Patanjali had become. As of 2014, Patanjali products were sold in over 5,000 stores across the country.
Many of the items under Patanjali’s umbrella are not exactly herbal-like. But, the creative Baba Ramdev has managed to put a touch of spirituality in things as mundane as a toothbrush. Patanjali products are all set to go online as well. The scope of business in this particular area is simply huge.
Demand for herbal products worldwide has increased at an annual rate of 8% during the period of 1994–2001, and according to WHO forecast, the global herbal market would be worth $5 trillion by the year 2050. As of today, Europe and the United States are two major herbal product markets in the world, with a market share of 41% and 20%, respectively
According to one research published in International Journal of Business and Management Invention,”While reliable information on industrial activity in this sector is not readily available, it is estimated that the annual total market for the products of Indian systems of medicine is of the order of Rs. 5000 Crores in the domestic market and around Rs. 500 Crores in exports. Both in turn-over and in the number of units, Ayurveda constitutes over 85 % of the total, which is followed by Homeopathy, Unani and Siddha. In the case of the number of Hospitals, Educational Institutes and Practitioners, the same order prevails. Of the 7000 Units, only around 35 have sales of over Rs. 5 Crores per annum, the majority of the balance are in the range of Rs. 50 lakhs to Rs. 1 Crore.
In another report by Ken Research, “The wide spread use of herbal medicine is not restricted to developing countries, as it has been estimated by various that 70% of all medical doctors in France and German regularly prescribe herbal medicine. The number of patients seeking herbal approaches for therapy is also growing exponentially. With the US Food & Drug Administration (FDA) relaxing guidelines for the sale of herbal supplement. The market is booming with herbal products. As per the available records, the herbal medicine market in 1991 in the countries of the European Union was about $ 6 billion (may be over $20 billion now), with Germany account for $3 billion, France $ 1.6 billion and Italy $ 0.6 billion.”
Traditional medicines especially Ayurveda gained a lot of popularity in the 20th century among developed as well as developing countries. However with discovery of antibiotics like sulfa drugs and penicillin they lost their demand. But once again due to lack of cure for chronic diseases and side effects of conventional medicines, India and other developed countries started looking towards Ayurveda for treatments to restore the wellness scenario in the country.
Globally, the demand for Ayurvedic products is on a continuous rise, which has led to the emergence of Ayurvedic centers in the U.S. and Europe. Within the Asia-Pacific region, India has attained global prominence for its wide Ayurvedic product range, thereby becoming a preferred destination for medical tourism. It holds a negligible share in the overall Ayurvedic products market, as quality standards are not maintained according to international specifications. However, the Government of India is taking initiatives to increase this share, for instance, it has setup Ministry of AYUSH to ensure the optimal development and propagation of Ayurveda. China also has history of this ancient science, and is a major market for Ayurvedic products.
Global Herbal Medicine Market Overview
Herbal medicine, or phytomedicine is a medicinal system using a plant or animal materials such as seeds, roots, leaves, bark, flowers, oils etc. for medicinal purposes. Herbalism has emerged from a long historical tradition of using nature for curing diseases. According to WHO estimates, almost 80% of population of many Asian and African countries depend on traditional medicine for primary health care. The market drivers for the global herbal medicine market are growing aging population, increasing consumer awareness, little or no side effects, supplier innovations, and the release of Current Good Manufacturing Practices (CGMP) for dietary supplements by the FDA. Another factor is escalating prices, tighter health budgets of modern medicinal system which has driven consumers towards the more economical and safer herbal medicine systems. The market constraints are lack of research and standardization in herbal medicines, poor legal and regulatory frame work which causes patent problems, poor manufactured herbal products etc.
Some of the major drivers for the global herbal medicine market are rising elderly population, growing consumer awareness regarding the use of herbal medicines, slight or no side effects, and the release of Current Good Manufacturing Practices (CGMP) for dietary supplements by the FDA. Moreover, factor such as escalating prices for pharmaceutical drugs, constricted health budgets for the modern medicinal system has helped to drive the consumers towards the more economical and safer herbal medicine. Therefore, this has upsurged the growth of the market.
The Economic Growth Potential
The Indian Ayurveda industry can be broadly categorized into the organized and the unorganized sector. Large manufacturing product companies, hospitals, clinics, pharmacies, authentic Ayurveda wellbeing centres constitute the organized Ayurveda sector. A large number of organized hospitality players also include light Ayurveda therapies in their bouquet of offerings. Small manufacturing product units, raw material cultivators, local Ayurveda vaidyas, small exporters, local Ayurveda pharmacies, extract manufacturers constitute the unorganized sector
The industry can be categorized by its market offerings into two broader categories:
A) Products: Ethical, classical, OTC, personal care and beauty products
B) Services: Medical, well-being, payor and medical tourism services
Ayurveda products segment (valued at approx USD 2.27 billion in 2016) has been flourishing in India for the past many decades. Ethical products, classical Ayurveda products, FMCG and personal care products including cosmetics are the major categories being retailed. Some of the prominent blockbuster products include Chyawanprash, Triphala Churna, Ashwagandha, Alovera etc.
Retail franchising has provided a big push towards the launch of Ayurveda companies. In addition, e-commerce is already playing a larger role in taking Ayurveda products to the masses. Market places such as Amazon, Flipkart and other online pharmacies have collaborated with large corporates to retail their products to the masses.
Ayurveda Services segment (valued at ~USD 0.75 billion in 2016) includes two broader categories:
Medical Services: This segment constitutes clinics, hospitals, and traditional family-run vaidyasalas offering curative services. Ayurveda is also integrated at the public health system across the country, especially at the primary healthcare centers. However, its practice is starkly conspicuous by its absence. Ayurveda by virtues of its philosophies and principles can play a major role in preventative, curative and promotive healthcare. Insurance coverage is increasingly being offered for Ayurveda hospitalisation and medical care services. The Insurance Regulatory Development Authority of India effective February 2013 has enjoined all health insurance companies to extend cashless coverage to NABH accredited Ayurveda hospitals. Further in September 2016 the Ministry of AYUSH in consultation with the Ayurveda hospitals’ industry and major Indian health insurance companies announced a set of standard tariffs for common medical conditions. All said, the insurance sector is progressively increasing the share of Ayurveda coverage across Corporate as well as Retail insurance policies. Further, there is CGHS (Central Government Health Services) coverage for Ayurveda medical care already in place although, unfortunately, the rates have not been revised since 2008.
Insurance coverage is increasingly being offered for Ayurveda treatment and services; however, the coverage base is low. There are practical difficulties in standardizing the treatment protocols across a personalized practice approach.
Well-being Services: Ayurveda originally committed itself to a two fold purpose- disease reversal and health promotion.The latter, health promotion,segment is experiencing a paradigm shift brought on by a shift in consumer mindset – from trying to achieve mere physical wellness to adapting a “wellbeing” approach which takes into account physical,mental/psychological, and spiritual health.With many countries incorporating spa therapies including Ayurveda massages as part of their tourism promotion strategy the unique differentiation potential of authentic Ayurveda wellbeing services has diminished in the last couple of decades.A radical new strategy is required to reposition Indian Ayurveda wellbeing services as a high value, scientific and quality systems driven service. The introduction of NABH accreditation standards for Wellness/Wellbeing centres is a powerful enabler available to Indian wellbeing industry to differentiate itself from regional/global competitors and take a quantum leap from the current mass ‘massage’ (USD 150-250 per day)market to a ‘high volume-high value’ (USD 500-1000 per day) wellbeing market.
Government expects Ayurvedic products market to rise to $8 billion by 2022
The AYUSH ministry and ICMR have decided to have molecular-based studies to match the AYUSH research approach with the modern system of medicine
With the need for the Ayurveda industry to transition towards precision root-cause diagnosis and treatment, certain key objectives need to be addressed. These include increasing the overall affordability and accessibility of medicines, attracting private investors, promoting Ayurveda hospitals and medical value travel, leveraging the potential of Ayurveda in preventative and curative healthcare, and creating a well-defined network for insurance and payors.
The government expects the market for Ayurvedic products to rise threefold to $8 billion by 2022 from $2.5 billion now.
The AYUSH ministry was established in 2014 to promote indigenous healing systems and its priorities include education, standardization of drugs, and enhancement of availability of raw materials, research & development, communications and larger involvement in the national system for delivering healthcare.
To promote Ayurveda, the government has held the goods and services tax (GST) rate on related products at 5%.
While the healthcare market in India is estimated to grow at a compound annual growth rate of 23% from 2015 to 2020, and is expected to be a $280 billion market by 2020, only 10% of the Indian population goes to Ayurvedic centres.
Future prospects of ayurvedic and herbal medicine
In the face of the increasing use and fast-growing market of herbal medicines and other herbal healthcare products, in both developing and developed countries of the world, policy-makers, health professionals and the public are increasingly expressing concerns about the safety, efficacy, quality, availability, preservation, and further development problems of these herbal products. Public demand has also grown for evidence on the safety, efficacy and quality of herbal products and TM/CAM practices. In order to allay these concerns and to meet public demands, extensive research on herbal medicines is needed to be undertaken not only for their great healthcare value but also for the commercial benefits. Fortunately, quite extensive phytochemical and pharmacological researches on medicinal plants and herbal medicines are already in place throughout the world and efforts are being made to isolate and identify their active chemical constituents and to substantiate the claims of their efficacy and safety. In most cases, it has been established that herbal medicines are not totally with-out scientific basis as most of them contain the relevant chemical compounds and exert the claimed activity. Scientific evidence from randomized clinical trials is also quite strong for use of many herbal medicines.
In the present situation, it is apparent that whatever important the concerns and demands of the policy makers, health professionals and public may be, they do not, in any way, stop the increasing trend of using herbal medicines. As a result, herbal medicine-based Traditional Medicine (TM) practices remain widespread in developing countries and that of Complementary and Alternative Medicine (CAM) is increasing rapidly in developed countries. This trend of growing and widespread use of herbal medicines is likely to increase even further throughout the world in the coming years with more and more scientific evidence of their quality, efficacy and safety coming from the researchers.
However, in order to ensure quality and safety of herbal medicines, their production, sale and use should be officially and legally controlled, as done with allopathic medicines, by established rules and regulations. But, regulations and registration of herbal medicines are not well developed in most countries, and the quality of herbal products sold is not guaranteed. Therefore, herbal medicines should be brought under legal control in all countries where they are used for medical and therapeutic purposes and efforts should be made to raise public awareness about the risks and benefits of using herbal medicines.
Herbal medicines hold good future prospects
Proper use of herbal medicinal products of ‘assured quality’ is sure to produce beneficial therapeutic effects on the users and reduce the risks associated with them. At the same time, it should be noted that, similarly to allopathic drugs, herbs, and herbal products are not free from side-effects. They are also likely to cause adverse effects. Furthermore, use of adulterated herbal ingredients and inappropriate formulation must be stopped as these may result in the production of low-quality and harmful or even dangerous herbal medicines. Therefore, rules and regulations of GMP should be strictly followed in the production of herbal medicines.
With this cautionary note, it may be concluded safely that herbal medicines hold good future prospects and they may, one day emerge as good substitutes or better alternatives for synthetic chemicals-based allopathic drugs or may even replace them.