India's OTC market: Combining tradition and tech for growth

India’s over-the-counter (OTC) market has experienced a remarkable transformation in recent years, aligning with global trends of heightened health awareness and a shift towards preventive care. It reflects a broader shift in consumer behaviour and industry dynamics.

Valued at around INR 74,000 crores in 2024 the market is expected to reach INR 1,57,000 crores by 2030, growing at 14% CAGR. This rapid growth is propelled by rising health awareness, changing lifestyles, and a post-pandemic emphasis on wellness and self-care.

The pandemic was a pivotal moment that reshaped consumer priorities. The emphasis on personal hygiene, immunity-boosting supplements, and self-care practices has led to a surge in demand for OTC remedies.

According to a report by Research and Markets, the pandemic has acted as a catalyst for the OTC healthcare market, prompting consumers to seek accessible solutions to manage their health concerns from the comfort of their homes.

Increased awareness of preventive healthcare and immunity-building led to a surge in demand for products like immunity boosters, stress relief solutions, and sleep aids. Simultaneously, the appeal of natural and Ayurvedic remedies, rooted in traditional practices, gained significant momentum.

Our internal assessments show an increase in consumer interest in OTC offerings helpful in the management of stress, respiratory ailments, and immunity. This intersection of wellness and tradition has created fertile ground for niche segments to flourish within India’s OTC landscape.

Future of OTC in India

The emphasis on personalisation through artificial intelligence (AI) reflects a growing consumer desire for tailored health solutions. This trend seamlessly complements India's deep-rooted preference for natural and Ayurvedic remedies.

As brands harness AI to deliver customised products, they are increasingly incorporating holistic solutions that align with traditional wellness practices. This synergy has been instrumental in shaping the future of OTC offerings.

Emerging technologies like augmented reality (AR) and virtual reality (VR) are transforming retail experiences, creating immersive environments where consumers can engage with products, access virtual consultations, and gain a deeper understanding of their benefits.

Together, these innovations are redefining how consumers interact with OTC products, bridging tradition and technology for enhanced accessibility and engagement. Additionally, most Indians look for home remedies or OTC medication before consulting a Doctor for common ailments.

Advertising: Digital and personalised

Advertising continues to play a pivotal role in driving OTC market expansion. In 2024, personalised digital advertising emerged as a key growth driver, with brands leveraging traffic-based campaigns and influencer collaborations to capture online audiences. However, the Indian market still lags behind global trends in digital ad spends, largely due to television’s dominance.

Television advertising remains unparalleled in its ability to reach mass audiences across rural and urban markets. It not only builds brand trust but also educates first-time consumers about OTC products. Striking a balance between the unmatched impact of TV and the growing precision of digital advertising will be crucial as brands seek to optimize their strategies.

The trend of personalised and cohort-based digital advertising has increased multi-fold in India in recent years. Brands must support targeted digital campaigns, which is why our digital marketing spend ratio to traditional media is almost three times that of the OTC industry standards.

Trends in sales channels

The rise of e-commerce has fundamentally altered the distribution of OTC products. Increasing consumer comfort with online shopping has led to a notable uptick in digital sales.

E-commerce platforms now serve as critical channels for both urban and rural customers, offering convenience and access to a wide range of products. Quick commerce, in particular, has led the way in the last 18-24 months and is expected to remain a dominant channel in driving consumption.

The growing competition from e-commerce poses challenges for traditional outlets like pharmacies and supermarkets. However, this shift also creates opportunities. Pharmacies can integrate digital tools to enhance customer experience, while supermarkets can offer in-store promotions tied to online campaigns.

To adapt, OTC companies are collaborating with advertising agencies to establish direct-to-consumer (DTC) channels and forge new reseller partnerships. This approach boosts brand loyalty and allows for precise targeting and consumer engagement.

As competition intensifies, increased ad spends will likely fuel both digital and traditional campaigns. However, recently, this trend has seen some reversal owing to higher operational costs and focus on profitability.

To stay ahead in the evolving OTC market, brands must strike a balance between digital innovation and traditional methods. A lot of new entrants have built and shaped successful categories by operating as only a digital-first brand and later expanding to GT.

While tech-driven personalisation and e-commerce open exciting avenues, the broad reach of TV and physical retail remains crucial. By blending data-driven insights with a multi-channel presence, OTC players can meet India’s diverse consumer needs and drive sustainable growth.

— Vikas Bansi, business director – OTC division, Himalaya Wellness Company.