Heavy market saturation and heightened competition will stem industry growth
New York, NY (PRWEB) September 15, 2014
In the five years to 2014, revenue for the Online Weight Loss Services industry is expected to grow per year on average, benefiting from rebounding demand following the recession. While many consumers continued to enroll in weight loss programs during the onset of the recession, disposable income dropped in 2009, causing demand to plummet. The five-year period consequently reflects recovering demand following the recession, bolstered by higher disposable income. Furthermore, growing obesity rates and health concerns have spurred consumers to enroll in weight loss programs, supporting demand for industry services.
As the economy has improved, Americans have returned to work and disposable income levels have started to rise. According to IBISWorld Industry Analyst Britanny Carter, “This increase in income has allowed customers to re-enroll in weight loss services or sign up for the first time, boosting industry revenue.” Following a strong, double-digit decline in 2009, industry demand recovered strongly, boasting double-digit growth during 2011. Growth, however, has slowed in recent years as market saturation and growing competition from free online weight loss services has limited demand. Revenue is consequently anticipated to grow modestly during 2014.
Despite heavy market saturation, low barriers to entry have enticed a considerable number of new entrants to the industry. Over the five years to 2014, the number of industry companies is expected to grow per year on average. “Online weight loss services do not require the significant overhead costs associated with a brick and mortar store, allowing businesses to enter the industry with minimal start-up costs,” says Carter. As many new companies enter the industry, larger companies have been consolidating their operations to reduce costs. For example, NutriSystem shut down its subsidiary, NutriSystem Fresh Inc. during the third quarter of 2010. Enterprise growth is therefore anticipated to outpace establishment growth during the five-year period.
In the five years to 2019, industry revenue is estimated to grow, albeit a slower rate. Heavy market saturation and heightened competition from free online weight loss services will stem growth over the next five years. Moreover, many consumers are opting to purchase healthy and unprocessed foods rather than follow a specific diet, reflecting a negative shift in consumer demand. As a result, revenue is expected to rise at an average annual rate.
For more information, visit IBISWorld’s Online Weight Loss Services in the US industry report page.
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IBISWorld industry Report Key Topics
This industry provides internet membership programs to consumers to assist them in losing weight or maintaining a desired weight. Online weight loss services generate revenue through subscription-based accounts and products sales. This industry does not include fitness tracking applications nor companies that generate their primary revenue through external advertisements and promotions.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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