The Rise of The Fitness Industry in India

As working out becomes increasingly popular, it creates new opportunities for entrepreneurs in the country. HE tracks the development and growth of fitness industry that gentrified exercise and made pursuit of fitness an integral part of middle class lifestyle.

From Milind Soman to Alia Bhatt, the fitness movement has been a driving force in the Indian culture for more than a decade. What started as a means of preventive healthcare routine now see Indians spend more than ever on gym memberships, fitness accessories and other related products and services.

The fitness industry too has evolved rapidly from its nascent unstructured beginning in the early 90s to a comprehensive ecosystem today including consumers, providers, adjacent industries, facilitators and government. While fitness — or rather, wellness — has always been part of the Indian culture, as is apparent with the existence of village akhadas, yoga and Ayurveda practices in the country, changing lifestyles and new demands by people have outpaced traditional wisdom to a certain extent. Against, just one akhada in small towns, today there are dozens of fitness centres.

The wellness market in India registered a growth rate of 18–20 percent during 2012, to touch a market size of USD700bn. According to a Deloitte India report, fitness industry in India is worth USD1.1 billion and is expected to cross $1.1 billion by 2017. In fact, government by recognising “Wellness” as one of the priority sectors in its Make in India campaign has given impetus to the sector.

Global Wellness Economy (Source : Global Wellness Institute)

Mom and Pop Centers vs Big Chains?

Is the entry on new chains threatening the existence of smaller centres? The answer is no, says Darshini Amit Shah and Nehal Shah, co-founders of The Square, a stand-alone fitness and dance studio in Mumbai. “It is true that managing rental costs in developed suburbs is a key concern for several small players and many are adopting a number of strategies to control rentals,” she adds. In fact, many opt for a revenue sharing model with independent instructors to reduce their risk . “Growing middle class is fueling the growth of the sector. Today, there are many takers for aspirational products and services that are offered at the Square studio. However, most of our customers are extremely cost-conscious and prefer stand-alone studios like ours wherein they get a wider variety of courses as we cater to the entire family segment A lot of our clients call the Square their second home.”

Urmi Kothari, who has her own fitness label Kinetic Living, seconds her views. Kothari, who is a certified trainer in pilates and kettlebell, points out that many consumers come to her studio because of personalised care. She notes that the growing industry has attracted lot of domestic and international players. “The rise of fitness culture is an inevitable process and result of people trying to compensate decreased physical activity in daily life . They prefer small studios due to the relationships with their trainers as well as other gym buddies.”

Interestingly, established players are pursuing revenue maximisation through product and service diversification and are exploring new global and domestic markets. Franchising is emerging as a popular option for scaling up . Companies are also actively seeking public and private equity investments to fuel their growth. While there is strong optimism about future growth prospects, recovery of investments may spread over a longer horizon than anticipated.

According to a report by PriceWaterCoopers, even slimming services segment has grown at a rate of 20–25 percent in 2012. However, the market is fragmented and most players have a limited number of centres focusing only on one or two cities within India.

Devi Prasad Biswal, CEO of Book Your Game (BYG), believes that fitness is a very community driven activity, and there is an emerging culture of more people starting passive and active form of becoming fitter. He notes that wellness comprises three main verticals — beauty and anti-aging, active fitness (exercise and weight loss) and nutrition (healthy food). “The spend on all three verticals are increasing consistently by about 30 percent year over year. Specifically — active fitness has the lowest base and is seeing the highest rate of growth, followed by nutrition .”

Biswal points out that while startups are trying to control costs and arrive at optimal cost structures, managing input costs continue to be a challenge due to the limited capability of players to pass the cost to the customers.

Further, talent crunch is also one of the major concerns of several players of the industry. The paucity of skilled talent has resulted in high manpower costs and attrition levels. This often results in “war for talent,” unless active measures are taken to create credible and accessible training infrastructure.

So, are Startups Betting Big on the Sector?

Despite the challenges, many fitness entrepreneurs have given complete makeover for dark smelly gyms with modern luxurious health clubs and personal trainers.

“About 117 fitness startups, which are marketplaces for discovery and booking of fitness centres, coaches and membership pass for various gyms and fitness classes, have been founded since 2015 in India, according to November data from startup tracker Tracxn,” states a LiveMint report. It also highlights that funds raised by some of these startups amount to USD16 million in 2015, and USD21.2 million in 2016. One of the high profile acquisitions was the acquisition of Cult Fitness by CureFit, a fitness health startup cofounded by former Flipkart senior executive Mukesh Bansal.

Emerging Business Models

“While the sector has been largely unorganized until now, it is on the brink of being consolidated into an organized entity with more global players stepping in. Homegrown startups as well as online and mobile marketplace models of business, structured around the ‘gyming’ and fitness domains are also coming up in a big way. Now gyms and fitness studios, even coaches and nutritionists, are easily accessible on people’s smartphones, forcing people to include fitness in their daily routine,” says Ritu Srivastava, founder of Obino, a weight loss coaching apps.

Srivastava points out that multinational fitness chains and gyms are taking the franchisee route to enter the Indian subcontinent, and as a result, Tier 2 & Tier 3 cities have become home to a dozen of gyms and fitness centres. “The hospitality sector is complementing this growth as domestic and international hotel chains offer health club memberships to people. Established fitness chains and gyms are already diversifying their product and service portfolios to tap into the market in each and every way possible, and reach out to every type of customer,” she concludes.

The Sport Medicine Industry

Adjacent industries such as healthcare, hospitality, education, media, retail and gaming are capitalizing on the growth of the wellness sector to generate additional revenue streams, leverage existing competencies and offer a wider array of services/products to customers.

Sports Medicine is also an interesting offshoot of fitness revolution. According to Data Bridge Market Research report, Indian Sports Medicine Market, is expected to reach USD 554.2 million by 2022, from USD 201.7 million in 2015 growing at a CAGR of 15.5 percent from 2016 to 2022.

“Sports Medicine is a multi-disciplinary specialty of medicine which primarily deals with prevention and treatment of sports injuries, rehabilitation for sports specific injuries, the biomechanical corrections and exercise physiology to enhance sports performance, sports nutrition and sports psychology,” explains Dr. Sumiran Passey, Sports Medicine and Rehabilitation Specialist of AktivOrtho, an orthopaedic rehabilitation centre in Delhi.

Dr. Passey highlights that with the emphasis on sports by the government and self awareness of staying physically fit among all age groups, sports medicine and rehabilitation is coming to light and is experienced by many in India. It has played a major role in preventing serious medical consequences on-field and off-field, and has enhanced performance of sportsmen.

“The corporate sector is the one that avails sports medicine services the most. This includes those who undergo a sedentary lifestyle because of overloading of work and end up with injuries when they try an unsupervised sports or exercise session. It also includes those who despite time crunch perform well on field and want to excel in endurance sports like marathon, ultra-marathon, ironman triathlon, etc.”

Clearly, looking at the fitness culture and industry illustrates how Indians understand their bodies, their health and emotional fitness.

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