Why the Wellness Market Performs So Well, So Consistently, Despite Slow Economic Growth
By Thierry Malleret, economist
The IMF expects global economic growth of an underwhelming 3.2% this year and next, provided no shocks occur. A bold, if not unrealistic, assumption. As the IMF managing director recently observed: “the unforgiving combination of low growth and high debt makes for a difficult future.”
WELLNESS STANDS OUT AS AN EXCEPTION. The just released Global Wellness Economy Monitor puts a value on the global wellness economy at $6.3 trillion in 2023, equivalent to roughly 6% of global GDP. In a world where global growth is destined to be lower for longer, the Global Wellness Institute predicts that the wellness economy will grow at a compounded annual growth rate (CAGR) of 7.3% between now and 2028, even faster than the 5.9% CAGR registered between 2019 and 2023. How come? How can the wellness economy perform (1) so well, (2) so consistently and (3) so counter-cyclically to the overall economy? Because…
WELLNESS IS NOT ONLY ON THE ASCENDENCY, BUT IT IS EVERYWHERE. It’s…
1) GOING UP. As we argued in Covid-19: The Great Reset (2020), wellness would be one of the main “beneficiaries” of the pandemic. The simple reason being that the successive lockdowns and the perspective of possibly dying from Covid made us acutely aware of the absolute necessity to be well, in our bodies (physical wellness), but also in our minds (mental wellness).
In rich countries, this trend predated the pandemic, but Covid exacerbated it. In middle-income countries, wellness accelerated its progression among the middle class (as shown by their rapid growth in specific wellness sectors such as wellness tourism and physical activity). And today, rising concerns about aging, lifespans (chronic diseases) and healthspans (aging well) are further boosting the wellness trend.
2) GOING WIDE. Six percent of global GDP seems a huge figure, but it only corresponds to the economic transactions (i.e., spending on goods and services) registered across the 11 sectors that the GWI defines as the wellness economy. Considering the GWI’s broad definition of wellness as “the active pursuit of activities, choices and lifestyles that lead to a state of holistic health,” it’s legitimate to argue that the wellness economy is even broader and bigger than currently accounted for.
The reasons are twofold. (1) Some activities that permeate our lives are not measured because they are not marketable (and thus can’t be priced), yet they are life enhancers and thus contribute to our wellbeing. Walking, swimming, running, and doing yoga at home are such examples. In addition, we all engage in activities that give rise to an economic transaction and are also wellbeing-enhancing, but do not belong to the 11 GWI categories, and so accounting for them would be a conceptual and methodological near-impossibility. Going to the theatre, the cinema, a concert, a museum, or a restaurant with friends are such examples.
WELLNESS PERVASIVENESS. The point is this: wellness and the aspiration for greater wellbeing now pervade our lives. New wellness “categories” that were not even on the agenda of the Global Wellness Summit 18 years ago are emerging all the time: digital wellness, sexual wellness, sleep wellness, and so on.
