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Indian Sexual Wellness (Entertainment) Industry: Secretly Growing?

CASE STUDY, STRATEGY
ET Cases, 28 Pages
AUTHOR(S) : Vandana Jayakumar and Dr. Nagendra V. Chowdary

Case Preview

Indian Sexual Wellness (Entertainment) Industry: Secretly Growing?

“Sexual health is a state of physical, mental and social well-being in relation to sexuality. It requires a positive and respectful approach to sexuality and sexual relationships, as well as the possibility of having pleasurable and safe sexual experiences, free of coercion, discrimination and violence.”

– World Health Organization

India is known to be the land of Kaamasutra, an ancient Indian Hindu text written by Vâtsyâyana and widely regarded as standard work on human sexual behaviour in Sanskrit literature. The book was written between the 4th Century BCE and the 2nd Century. Be it the temples at Konark and Khajuraho or the Ajanta and Ellora caves, the nudity and erotic designs spread across the sculptures and paintings of these historic monuments speak oodles about the liberal sexual norms in historic India. However, in the last few hundred years, India has been a very conservative country, perhaps, influenced by the puritanism of various groups such as the Islamic dynasties, British overlords and the native Brahmin priestly class. Despite being the second most populous country in the world, in India, sex is a tabooed topic. Quite expectedly, there is lack of exposure, awareness and availability of products of sexual pleasure and wellness in India.

The launch of several online stores – including some by women entrepreneurs – for sexual wellness (entertainment) products in India marks a turning point for the Indian sexual wellness (entertainment) industry. However, industry experts are not sure whether sexual wellness products segment can be bestowed with an ‘industry’ status. More intriguingly, while there seems to be tremendous growth potential, the societal and cultural barriers had not been permitting the companies to leverage the potential. Despite several challenges, quite a few enterprising and entrepreneurial ventures have dared to change the status quo, albeit with an abysmal success. What must have been the trigger points for these businesses? What can propel this segment’s growth? Given the nature of this industry, what are the legal, social and financial challenges for the players in this industry? While the industry is agog with potential, it is besieged with challenging contradictions. How can the entrepreneurs overcome these challenges to ensure steady growth of the Indian sexual wellness (entertainment) industry?

INDIAN SEXUAL WELLNESS (ENTERTAINMENT) INDUSTRY: GLOBAL INFLUENCERS

The sexual wellness industry is also called as the adult products industry and it relates to sexuality and intimacy. Divya Chauhan (Divya), Co-founder, itspleaZure (an online sexual wellness store), avers that the sexual wellness products are aimed at satisfying one of the innate human needs i.e., sexual pleasure. They address not just the physical but also the emotional aspect of sexual wellness as they help partners in getting intimate resulting in satisfying sex and healthy and happy relationships.............

Sexual Wellness Products and Categories

Sexual wellness products include vibrators, performance products, erotic lingerie, edible lingerie, massagers, sex games, role-play costumes, virility creams, clothing, condoms, sexual medications, lubricants...............

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Major Geographies and Players

While Western Europe has been a pioneer of this industry from the days of Beate Uhse-Rotermund, the US and European countries can be credited for innovation. Some of the main countries which can boast of a thriving sexual wellness industry are the US, Germany, UK, Western Europe and China. Samir said that, “Adult toys have seen a rising acceptance in other geographies too, especially the US, Canada and Australia where there is greater acceptance at the government level.”...........

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SEXUAL WELLNESS (ENTERTAINMENT) INDUSTRY IN INDIA – TRENDS AND KEY BUSINESS DRIVERS

People anywhere across the world are shy to talk about sex, let alone purchasing sex toys from a store. India is no exception with its conservative culture and measured societal values. Despite being known to be the land of..............

Sexual Habits of Indians

It is argued that the sex rituals in ancient India were well ahead of their time. In the early history of human civilization, there were no social rules and regulations governing the sexual involvement of men and women and it was not a tabooed topic. It is argued that the sex rituals in ancient India were well ahead of their time. In the early history of human civilization, there were no social rules and regulations governing the sexual involvement of men and women and it was not a tabooed topic...........

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E-commerce – The Key Business Driver

The e-commerce revolution gave the biggest fillip to the Indian sexual wellness industry as e-commerce stores addressed one of the most important concerns of prospective buyers – the ability to discretely purchase sexual wellness products. The Indian online retailers brought the sexual wellness category into the growing e-commerce market..............

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Consumption Patterns

The major product categories that are flying off the shelves in Indian sexual wellness industry are lubricants, male performance, sexy lingerie, edible fun, condoms, women’s hygiene and arousal, lotions, delay sprays, men’s inner wear and pleasure rings. There is a general affinity for European and American brands.............

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Indian Youth

India’s youthful population comprising of the millennials (20-25 years of age) and the Gen Z’ers (2-19 years of age) is also one of the factors that is driving this industry. It is argued that the millennials and the Gen Z’ers being hedonistic and highly experimental, form an important customer segment for the Indian sexual wellness industry.............

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Indian Sexual Wellness (Entertainment) Industry and Women Factor

It is quite evident that women have become more open in discussing about sexual wellness products (both as consumers as well as business owners) and this is also driving industry’s growth. Women in India are now breaking the age-old barriers, most often against the wishes of their families, and asserting their sexuality and writing their own rules..........

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SEXUAL WELLNESS (ENTERTAINMENT) INDUSTRY IN INDIA: VISIBLE CHALLENGES AND INVISIBLE SOLUTIONS

According to Divya, “Sex. Even a mere mention of the word in a casual conversation leads to awkward silences and raised eyebrows. One can only imagine the reaction when a woman decides to work towards creating sexual awareness or in a set-up that is a part of the sexual products industry. Disbelief, outrage, and discouragement are some of the most immediate responses that one gets; which is exactly what I got when I first broached the idea of it’spleaZure – an online store for adult products, within my personal circle.” She further adds that.............

Legal Challenges

The Indian laws are against the sale of erotic and sexual wellness products. Pornography is illegal and the offence attracts imprisonment for 2-5 years. While there is a difference between pornography and products of sexual wellness (entertainment), according to industry experts, there are no specific laws or any other legal provisions that address the use, sale, import, etc., of sexual wellness (entertainment) products...........

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Marketing and Distribution Challenges

Identifying the prospective customers and making them aware that such products exist and are available online is a challenge. Divya shares that, “We are not allowed to market on Facebook or Google because the laws are not clear. So reaching out to the right target audience is also a challenge we face.” Owing to the legal issues relating to the display and promotion of sexual wellness (entertainment) products............

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Poor Investments

Many industry experts wonder when would India have its first unicorn in sexual wellness (entertainment) category. While the Indian e-commerce industry has witnessed quite a few homegrown unicorns (Flipkart, Swiggy, Ola, PayTM, Snapdeal, Hike, Shopclues, etc.), sexual wellness (entertainment) industry seems stuck with personal financing as it hasn’t been able to attract external funding............

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Lack of Social Acceptance

There is still a lack of social acceptance for the sexual wellness industry despite the gradual cultural changes. Companies have to spend money on product education through discreet methods as these products cannot be advertised through mass media making it difficult to convey the message to the prospective customers...........

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The Way Ahead

The Indian sexual wellness industry is quite nascent and experts argue if it should even be referred to as an industry as there are several factors which are impeding it from flourishing to its potential – lack of investments, the players are yet to achieve size and scale, absence of an economic and social ecosystem for the companies to operate in, etc...............

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Assignment Questions

I. What according to you is the nature of sexual wellness (entertainment) products? Should sexual wellness (entertainment) category be bestowed with an ‘industry’ status?
II. What is the business potential for sexual wellness (entertainment) segment in India and what are the business challenges?
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Exhibits

Exhibit I: Sexual Wellness (Entertainment) Products Categories

Exhibit II: Bases for Market Segmentation

Exhibit III: Global Sexual Wellness Industry – Major Players

Exhibit IV: Vendors in the Indian Sexual Wellness Industry

Exhibit V: Average Age at First Sex for Indian Women Lower than that for Men

Exhibit VI: Education Delays Sex

Exhibit VII: North Indians Reported a More Active Sex Life Compared to those in the South

Exhibit VIII: Select Indian Online Sexual Wellness Stores

Exhibit IX: Trends and Usage Pattern of Sex Products in India*

Exhibit X: The Global Best Practices That the Indian Sexual Wellness (Entertainment) Industry May Consider

Exhibit XI: Critical Success Factors that can Catapult Indian Sexual Wellness (Entertainment) Industry’s Growth

Exhibit XII: Medical Fraternity Involvement

Annexures

Annexure I: Central Government Act – Section 292 in The Indian Penal Code

Annexure II: Central Government Act – Section 67 in The Information Technology Act, 2000

Annexure III: Central Government Act – Section 377 in the Indian Penal Code

 

 


Teaching Note Preview

Indian Sexual Wellness (Entertainment) Industry: Secretly Growing?

Synopsis

This case study, a culturally sensitive case, profiles the Indian sexual wellness industry that is besieged with contradictions. The industry has a tremendous potential to grow yet operates discreetly. There is latent and pent-up demand yet the companies cannot market freely. Despite the business potential, investors never have been keen to support the fledgling sexual wellness businesses/startups. The case helps understand the dynamics of this industry with the help of insights from a few bold entrepreneurs who are trying to find a foothold and grow their business in this industry.

The case study enables an analysis of the Indian sexual wellness industry in terms of the nature of the products, their market segmentation, targeting and positioning, the key challenges and the ways to overcome them. It also helps analyze the growth potential for this industry in India, a country where sex is a tabooed topic. The analysis leads to an intriguing question – can the sexual wellness industry be called an industry at all? How can entrepreneurs chart their growth path in a fledgling industry expected to grow at the rate of 81% by 2020, to reach $1.6 billion sales?

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Preamble to the Case Analysis

The aim of this case study is to understand the fledgling Indian sexual wellness industry and assess the potential of this industry and growth prospects of its players. Given the unique nature of this industry – with the inherent contradictions – the case discussion can begin with an analysis of the nature of sexual wellness products. Given the fledgling stage of the industry, it would be a good exercise to debate on appropriate positioning along with segmentation and target market analysis. Markedly, the discussion on whether sexual wellness products market constitutes an industry can be the last segment of analysis. The classroom discussion for the case study is given in Exhibit (TN)-I................

Exhibits

Exhibit (TN)-I: Classroom Discussion Dashboard

Exhibit (TN)-II: Nature of Sexual Wellness Products

Exhibit (TN)-III: TIPS Framework

Exhibit (TN)-IV: The Purchase Decision Process

Exhibit (TN)-V: Assessing the Potential of the Indian Sexual Wellness Industry

Exhibit (TN)-VI: Indian Sexual Wellness Companies’ Business Challenges

Exhibit (TN)-VII: Insights from an Analysis of Sexual Habits of Indians and their Consumer Behavior Patterns

Exhibit (TN)-VIII: Proposed and Perceived Positioning of Sexual Wellness Products

Exhibit (TN)-IX: Segmentation, Targeting and Positioning of Sexual Wellness Products

Exhibit (TN)-X(A): GENESIS-Characteristic Features of an Industry

Exhibit (TN)-X(B): Assessing the Indian Sexual Wellness Industry

Exhibit TN-(XI): Teaching Plan Flow

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Abstract

The purpose of this case study is to let the students discuss and debate on the ways to grow an industry besieged with contradictions. While the industry – Indian Sexual Wellness industry – has a tremendous potential to grow, it operates discreetly given the societal and cultural barriers. There is latent and pent-up demand yet the companies cannot market freely. Despite the business potential, investors never have been keen to support the fledgling sexual wellness businesses/startups in India. Yet, a few bold entrepreneurs, some of them being enterprising female entrepreneurs, took the plunge and had been trying to grow the business. The adult products industry or the sexual wellness industry as it is better known is a multi-billion-dollar industry globally and is expected to grow to $52 billion by 2020.1 With the likes of IMbesharam, itspleaZure, Thatspersonal, Kaamastra, Shykart, etc., taking a plunge into sexual wellness market in India albeit discreetly, is the market poised for rapid expansion? Given the legal restrictions in marketing, distributing and selling sexual wellness products in India, what would this expansion mean for the existing and potential companies? With an expected growth rate of 81% by 2020, to reach $1.6 billion sales2, how should firms take advantage of the growing demand for sexual wellness products while overcoming the impending challenges?

Pedagogical Objectives

  • To have an overview of Sexual Wellness Industry in India – players, products, growth arenas, etc. – and discuss on the state of sexual wellness products’ business potential in India
  • To analyze how a few Indian sexual wellness-based companies have been performing and distill their market reading and consumer behavior insights
  • To discuss and debate on how sexual wellness-based companies can overcome a few potentially game-changing challenges – legal, investment, scaling, talent, marketing, distribution and selling

Case Positioning and Setting

This case study can be used for either of the following courses:

  • MBA Program – Strategy Course – Industry Analysis Module – To understand how cultural factors and societal influencers inhibit a market segment’s potential growth and discuss how should companies explore the business potential to catapult into an industry
  • MBA Program – Marketing Management Course – STP Module – To understand segmentation, targeting and positioning of an evolving industry in an introductory market phase (PLC) and debate on the growth strategies

1 Rajiv Singh, “Passion Play”, The Economic Times Magazine, April 24-30th 2016

2 Divya Chauhan, “Decoding The Online Sexual Wellness Industry in India”, https://inc42.com/resources/indias-online-sexual-wellnessindustry/,March 31st 2016 (Accessed date: July 5th 2018)



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