Understanding the Financial and Behavioural Importance of Ayurveda in Contemporary Markets

Traditional systems of medicine such as Ayurveda are often discussed mainly in terms of health, wellness, and culture. However, in today’s context, they also represent an important part of consumer markets, making them highly relevant for students of business, economics, and behavioural finance. The COVID-19 period provided a unique setting to observe how consumer preferences, perceptions of risk, and social influence can reshape demand patterns, particularly for products linked to health and immunity.

This article is based on a research project conducted by Dr. Girija Shawarikar ( SP Jain School of Global Management, Singapore) and Ms. Surbhi Bafna ( SP Jain School of Global Management, Singapore) as part of her finance research project, which examines consumer buying behaviour toward Ayurvedic products during the COVID period. India represents a large and growing consumer market and consumer behaviour plays a critical role in determining the success of any product category. The study observes the size of the market and changing consumption patterns make buying behaviour financially important, not just socially or medically. When large numbers of consumers shift their preferences, even slightly, the impact on sales, revenues, and business strategies can be substantial.

Ayurveda, though rooted in India, is not limited to a single geography or culture. It represents a broader philosophy of preventive healthcare and natural living, which has become increasingly attractive to consumers seeking long-term wellbeing rather than short-term solutions. During the period of health uncertainty, many consumers especially younger individuals, began to shift their attention toward natural and immunity-boosting products. This shift was not driven purely by technical evaluation, but by a broader change in mindset toward safety, prevention, and long-term health.

From a financial perspective, this change in consumer attitude is extremely important. Markets respond not only to objective information, but also to perceptions, emotions, and collective behaviour. The growing interest in Ayurvedic products shows how consumer demand can increase when a category is associated with trust, fewer side effects, and long-term benefits. For firms operating in this space, such changes directly affect production planning, marketing focus, and investment decisions.

The study also provides a clear illustration of key concepts from behavioural finance. One of the most visible patterns observed is herd behaviour. Instead of making decisions independently, many consumers were influenced by what others around them were doing. Recommendations from family members and friends played a strong role in shaping purchase decisions. In uncertain times, people tend to rely on social signals, especially when the decision involves health and safety.

This influence-based buying behaviour shows that consumer decisions are not always fully rational. Even when products are related to personal health, choices are often shaped by fear, emotions, and social pressure. For students of finance and economics, this is a valuable real-world example of how psychological factors can affect markets. Just as investors sometimes follow crowds in financial markets, consumers also follow crowds in product markets, which can lead to sudden increases in demand for certain categories.

Another important insight from this context is the link between risk perception and spending behaviour. During the COVID period, people were actively searching for ways to protect themselves and their families. This increased their willingness to spend on products perceived as safer and more natural. As a result, consumption patterns shifted toward immunity-related and preventive healthcare products.

Understanding these dynamics is essential for interpreting the financial importance of traditional systems like Ayurveda. Ayurveda is not only a medical or cultural system, it is also part of a commercial ecosystem involving manufacturing, distribution, branding, and consumer trust. When consumer beliefs and preferences change, the financial performance of entire product categories can change with them.

For students, this study provides a strong learning example. It connects concepts such as herd behaviour, influence, and non-rational decision-making with real market outcomes. It also demonstrates that financial results in markets are often driven by human behaviour as much as by product features or prices.

In conclusion, the growing interest in Ayurveda during the Pandemic highlights the importance of understanding both the behavioural and financial dimensions of consumer decision-making. Traditional systems like Ayurveda should be seen not only as cultural or health-related practices, but also as economically important sectors shaped by consumer psychology and market forces.