Health is wealth and indeed it is. Thanks to the pandemic, people now realise the importance of staying healthy, including eating healthy foods and exercising. Perhaps this is also a reason behind the rise in the number of fitness brands including training outlets, otherwise known as gymnasiums. “The fitness industry in India has been witnessing a transformation, driven by various factors including rising health consciousness, urbanisation, higher disposable incomes, and an increased focus on personal well-being. Indian gym and fitness market is expected to have double-digit growth in the next five years, with premiumisation being a trend in the organised memberships,” Praveen Govindu, partner, Deloitte India, told BrandWagon Online.
Total revenue in the health and fitness market reached $19.24 million in 2022, as per market research firm Statista. the total revenue is expected to grow at an annual rate (CAGR 2022-2027) of 11.57%, resulting in a projected market volume of $31.97 million by 2027. According to the World Economic Forum, in 2020, fitness app downloads rose by 46% globally and India topped the list. India had the maximum increase in downloads—a whopping 156%. This resulted in 58 million new active users in the country.
Media queries sent to Cult.fit and Gold’s Gym remained unanswered till the time of publishing this article.
Talk of the town!
Currently, there are about 64,148 gyms in India and only 0.2% of the population has a gym membership. Compared to this globally, Norway has a gym membership adoption rate of 22%, the US has 21.2%, and the UK has 15.6%, as per a global market research firm Market Brew. Experts believe that. the pandemic accelerated the shift to digital solutions in many aspects of life, including fitness, leading to a surge in online fitness apps and programmes. “There is a notable shift towards healthier lifestyles driven by heightened awareness of lifestyle diseases such as diabetes and obesity. One in every three Indian adults is classified as overweight today. This awareness is further amplified through media and social channels, encouraging individuals to prioritise fitness,” Govindu said.
Even as digital continues to attract eyeballs, it is believed that offline fitness centres continue to grow as users and recognise the value of in-person experiences. Brands including Anytime Fitness, Cult.fit, Blink Fitness, and Orangetheory Fitness among others, seems to have adopted a hybrid approach by offering both offline fitness services and digital options. “At Anytime Fitness, as part of our approach to driving memberships, we emphasise on sustainability. We have been able to a strong renewal rate of over 60% annually and consistently attract 30-35% of new signups year on year. Additionally, each month brings in 30-40% new signups, contributing to an overall annual increase of 20-30% in club membership,” Richa Mishra, vice president – operations, Anytime Fitness India, said. Anytime Fitness claims to have about 125 offline outlets.“The maximum growth potential in our case can be attributed to various parts of North India, and western parts of India including Mumbai, Pune and others,” she noted.
Meanwhile, numbers indicate that despite revenue growth, these fitness brands are yet to turn profitable. Sample this: Cult.fit’s revenue from operations rose 2.8 times to Rs 193.4 crore in FY23 from Rs 67.6 crore in FY22, as per the regulatory filings accessed by the business intelligence firm Tofler. Its net losses narrowed 28.13% to Rs 162.62 crore in FY23 from Rs 226.26 crore in FY22. According to several media reports, Cult.fit acquired a majority stake in the global gym chain Gold’s Gym, marking a significant expansion in its portfolio. Reportedly, this acquisition includes Gold’s Gym’s operations across more than 140 centres in over 90 cities throughout India.
In the meantime, Gold Gym’s revenue from operations rose 54.47% to Rs 30.94 crore in FY23 from Rs 20.01 crore in FY22. It posted a net loss of Rs 5.15 crore in FY23 from a net profit of Rs 1.15 crore in FY22. As for other gym brands, they claim to have seen an increase in user base. “In FY 23-24, we saw a 100% increase in our member base across all studios. Our revenue growth is driven by a steady new member join rate and a strong renewal rate. New member growth accounts for 35% of our revenue, renewals 50%, and the remaining 15% comes from upgrades, merchandise, and other sources. Our renewal rate exceeds 60%, compared to the industry standard of 35-40%, ensuring a steady member base,” Drishti Chhabria, founder and CEO, Orangetheory Fitness India, said. While Orangetheory Fitness India which is already present in Mumbai and Hyderabad is looking to open more studios. The company claims to be in multiple discussions to open centres in cities including Pune, and Delhi NCR, among others. “Our goal is to open over 40 studios in the next couple of years,” Chhabria said.
Metrics and dynamics!
Experts believe that while people of all ages show interest in physical activities, those in their late 20s to 40s are the most likely to join gyms and participate in offline classes. “Most of our members base or customer bracket over the last five years has been from the age bracket 25 to 40 years, followed by 40 to 50 years, and 18 to 24 years. Moreover, the maximum growth potential in our case can be attributed to various parts of North India, and Western parts of India including Mumbai, Pune and others — with individuals who want to strike a balance between work, life and fitness alongside fitness enthusiasts being our target group,” Mishra highlighted.
Besides high-intensity interval training, better known as HIIT, and weight training the fitness industry also offers activities such as zumba, dance, pilates, and yoga, which promote physical and mental well-being. In the digital space, various applications and programmes provide at-home classes in addition to selling fitness-related equipment and apparel either through in-house manufacturing or third-party partnerships. ” At Nispand, a wellness app, we combine ancient yogic techniques and behavioural science to provide a holistic approach to mental, physical, and spiritual well-being. Created by The Yoga Institute, which carries 105 years of yogic wisdom, we offer a comprehensive framework for healthy living. It includes ancient chants, curated meditations, yoga asanas, pranayamas, daily live sessions, and unique features for hyper-personalisation such as diet consultations, home sessions, mood checkers, and journaling,” Hrishi J Yogendra, assistant director, The Yoga Institute, said.
It claims to further earn through the subscription model. With the launch of the new Nispand, the app has expanded from a meditation app to a wellness super app, offering options to subscribe to one-on-one asana sessions, master classes, and nutrition consultations.
Another brand is Hyderabad-based Portl, a digital health, fitness and wellness technology company. Founded in 2021, the company designs and develops a suite of products and services that enable hyper-personalisation of fitness and wellness at a scale. The company claims to have maintained over 85% retention rate over the past 18 months amongst its home users. “While we cannot comment on the exact number of such users at this time, we have seen strong growth and engagement across our home user base. On average, we see 2 users per device at a home level and they execute approximately 2-3 sessions per week/ user,” Indraneel Gupta, founder and CEO, Portl, said.
Fee framework!
Experts believe that in a market like India, the fee structure plays a crucial role in the success of fitness businesses. It is believed that Indian customers are willing to forego international facilities for a lower-cost alternative that offers comparable performance. Global gym chains focus on providing high-class facilities and additional perks compared to local fitness centres. In the case of online applications and programmes, competition is understood to be fierce, with prices often being similar, but the popularity of online trainers also plays a significant role here as a differentiator. “While there is sufficient opportunity to scale the services market, physical gyms face challenges in scaling due to high fixed costs and operational constraints. Intense competition among fitness providers could lead to pricing pressures and margin erosion. Large, branded payers scaling and growing the organised category, like most sectors, is imperative to grow fitness behaviour and adoption in the country,” Govindu highlighted.
For instance, Anytime Fitness offers membership ranges from Rs 2500 to Rs 3500 per month which varies by location.“When a flagship AF club reaches a threshold of around 950-1000 members, we provide the opportunity for the franchise owners to open another franchise in the vicinity, and this way franchise owners can ensure continued growth for themselves through the franchise model,” Mishra said.
On the other hand, Orangetheory Fitness India’s membership options vary based on individual fitness goals and commitment levels, typically ranging from Rs 600 to Rs 1200 per class. Similarly, cult.fit offers passes like cult pro for Rs 616 per month and cult elite for Rs 1,071 per month, with discounts and offers.
Meanwhile, in the digital space, Nispand claims to offer a 30-day free trial to all new customers, providing full access to its content. After the trial, customers can choose annual or monthly plans, with the flexibility to switch as desired. Pricing varies by country and is competitive within the holistic wellness category, as per the company. “As awareness grows and incomes rise, both gym memberships and app downloads are expected to increase, catering to different segments of the market,” Govindu concluded.