The competitive landscape of digital weight loss solutions: When will WW International and Noom lose their pole position?

The leading commercial and reimbursement digital weight loss providers have managed to establish strong and recognizable brands. However, they still lack real global span, operating mostly in the United States. Strong positions in the U.S. benefit weight loss companies, since it is currently the biggest country market globally. In the medium term however, the situation is set to change, as new local weight loss companies will establish themselves around the globe. Current market leaders should be better prepared for the increasing international competition. On the other hand, they need to reduce its excessive dependence on the U.S., creating platforms for further growth in new markets.

Since the first weight loss apps appeared on Apple’s App Store in 2008, the mobile weight loss market has developed into a global ecosystem of over 6,000 solutions offered by around 4,200 providers (Mobile Weight Loss Report by Research2Guidance). Encompassing the companies from various backgrounds, the mobile weight loss market is divided into two major business segments: commercial (B2C) and corporate (B2B) solutions. It is mainly consumer oriented: In 2019, direct-to-consumer sales accounted for 84% of the total market revenue. Such big names as WW International, Noom, and Under Armour (owns MyFitnessPal) are the leaders in the B2C segment, making the mobile weight loss market different from other digital health markets due to its end-user nature.

On the other hand, the B2B segment of the mobile weight loss market (16% of the total market revenue) is represented mainly by reimbursement payer services and – to a lesser extent – white label tech licencing solution providers. In the payer weight loss services, the leaders are Omada Health and Livongo, the vertical chronic care management companies that target obesity among other major chronic conditions. Other significant market players include Lark, Oviva, OurPath, Liva Healthcare, to name a few.

Although the mobile weight loss ecosystem is very big and diverse, the market’s concentration is extremely high: The two market leaders – WW International and Noom – account for over 60% of the global revenues, dwarfing any other market player. This dominance results from the fact that both companies are mostly concentrated on the U.S. market, whereas no other country markets have any market players who would be comparable to the big duo in terms of market strength, available resources, and expertise. The same over-concentration on the U.S. market is also observable among the B2B weight loss companies: Two leading players – Livongo and Omada Health – operate only in the U.S. with its big and established reimbursement market. As a result, more than two thirds of the global mobile weight loss revenues are generated in the U.S. market, which also accounts for over 70% of the global user base.

Several factors determined the success of mobile weight loss solutions in the U.S., such as the overwhelming impact of the obesity pandemic, big consumer demand supported by high purchasing power, and the increasing interest of payers – insurers and employers – to the weight loss solutions, On the other hand, it is the U.S. market that has proven that coaching-based digital offerings can be efficient. So far, behavior change via a structured digital coaching program has been a rather American concept, which has not yet been properly standardized outside of the United States. Even in relatively developed markets weight loss is still associated with non-sustainable fad diets and non-systemic fitness activities. This situation is expected to change, as behavior change weight loss solutions have the potential to be popular not only in the U.S. market, regardless of cultural differences. The behavior change weight loss programs have the potential to stimulate the development of digital weight loss services in Western Europe and leading Asian markets.

In the medium term, this will result in significant changes in the structure of the mobile weight loss market. The market concentration is set to decrease, new players, mostly local, will expand in their markets, leveraging their understanding of local specificity. Current U.S.-centric market leaders are at risk of losing their competitive edge, allowing domestic players in new markets copycat their services and business models. The international expansion should be the primary strategic goal of the established players who need to protect their market shares globally. Although the unique importance of the U.S. market will hardly reduce in the future, the global expansion can potentially decrease the over-dependence of weight loss companies on a single market, whilst opening new international opportunities, both among end users and payers.

For more information, see the new report by Research2Guidance.

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