When Grass Roots Research, an arm of Cohen Independent Research, recently issued their analyst report on SE Concepts, makers of the SpaCapsule automated massage and sensory stimulation system, it did a thorough job of detailing the company’s strengths, but also laid out major differences between the company and a primary competitor.

The company’s strengths are centered around the doctor-led management team and scalable business model, as well as SpaCapsule’s multi-market appeal. SpaCapsule offers users a relaxing and de-stressing clothes-on water massage, combined with video, audio, and even aroma stimulation. Its recreational appeal is obvious, but SpaCapsule, designed by doctors, has been shown to also offer pain relief, toning, and even weight-loss benefits. As a result, SpaCapsule has managed to penetrate multiple overlapping markets, and this was highlighted by the report.

• Physical Therapy: This represents a $10 billion dollar market in the U.S. alone.
• Weight Loss: Treatment for obesity represents $147 billion dollars in domestic healthcare cost annually, with well over 3,000 facilities dedicated to offering services for weight control.
• Fitness Centers: Fitness centers account for nearly $15 billion dollars in domestic revenues, with nearly 25,000 such centers across the country.
• Massage Therapy: This is an industry estimated at $16–$20 billion in 2009, with franchises like Zen Massage Center and Massage Green rapidly expanding to satisfy demand.
• Franchise Market (massage therapy): Massage therapy centers like Massage Envy have over 600 locations in 42 states, totaling hundreds of millions of dollars in value.

But the report also looks at what some consider to be SpaCapsule’s main competition, at least in the toning and cellulite reduction market. VelaShapeTM is an FDA cleared device that, according to its website, contours, shapes, and slims the body by reducing cellulite and firming problem areas. The system is supposedly used by over 10,000 patients daily on a worldwide basis, helping to give Syneron Medical, makers of VeleShape, a market cap of close to $500 million. It gives a better idea of the size of at least one of the available markets, all the more important when you consider that VeleShape, a handheld device that uses a combination of radio frequency and infrared light and mechanical massage, is seemingly more effective when administered by another person. In addition, VeleShape has less appeal to the other markets that represent a significant part of SpaCapsule’s potential.

SE Concepts concludes that, with expected total sales over the next four years topping $27 million, the longer term potential of generating $20 million in annual sales now appears to be a definite possibility.

For more information, visit www.SpaCapsule.com and the corporate website at www.SECCorporation.com

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