Health & Fitness: India
The market is looking up in India. Thanks to today’s fast paced, hectic modern lifestyles which
seldom allow a person to workout actively or follow a well-crafted fitness regime. Now gyms and
fitness studios are on people’s smartphones. This has forced many people to do whatever they can to
keep themselves fit and active and a healthy diet often tops the set of try-outs. Heart healthy,
probiotic, sugar-free, fat-free, low-cholesterol, baked, boiled are some of the lines we see appearing in
product packaging these days. Furthermore, muscular and toned bodies of celebrities and fashion
icons coupled with healthy lifestyles are making Indian consumers embrace fitness like never before.
People are spending quite a sizeable moolah to
look and feel good. The trend is encouraging
people to take out time from their busy
schedules and visit the gym or follow a strict
workout routine in the comfort of their homes
by taking personal training services. People are
coming to terms with the fact that those who
exercise regularly are happier and healthier
compared to those who don’t. Also, regular
workouts help in reducing stress, anxiety and
depression and keep a host of diseases at bay,
including 13 types of Cancer. Strength, energy
and stamina are the other immediate clear cut benefits that come with working out regularly.
In India, the total retail market for fitness as a category is valued at Rs. 4,579 Cr (US$ 0.76 bn),
growing at 16-18 per cent and is estimated to cross Rs. 7,000 crore (US$ 1.18 bn) by the year 2017.
Modern retail is estimated at 28 per cent of this total market and is expected to grow by 22-27 per
cent. Fitness centers are burgeoning as disposable per capita income rises and sedentary lifestyles
lower immunity amongst today’s youth. Fixation to resistance training increased amongst men and so
did aerobics and strength training amongst women.
The Indian fitness industry is undergoing a revolution of sorts spiked by the increasing incidences of
obesity and diabetes. If we look around, we will find that weight loss advertisements are rampant
everywhere. This is one of the key reasons as to why health clubs and gym memberships are growing.
Spending on fitness was earlier seen as a luxury, but now it is a way of life. Not just in the urban areas
and cities, but also in tier 2, tier 3 cities, towns and even in the villages, where people are increasingly
opting for wellness and fitness choices. A preventive approach to healthcare has led to an increase in
demand for not just services but also products. Today’s health conscious and fitness aware generation
wants to look and feel good at any cost; and this is further fueling the overall growth of the fitness
resources and services.
Big and established fitness chains and gyms are already diversifying their product and services
portfolios to tap into the market in each and every way possible and reach out to potential customers.
Many such companies have acquired public equity to fuel their growth plans. Given the diverse and
unorganized Indian market, franchising have caught on really fast. Many are using the franchising
model to scale up their operations and also to tap into a larger client base. Skyrocketing costs of
healthcare and specialized medical interventions have pushed people to turn to prevention as a viable
option, rather than cure.
Health & Fitness: USA
Fitness is in.
Or perhaps more accurately, the idea of fitness is in. One out of every five Americans are heading to
the gym, or at least paying for a membership. Which puts the fitness industry in a pretty sweet spot: a
largely unhealthy and overweight population is looking for ways to get in shape.
.
The more traditional gyms distinguish themselves at least in part through price point. High-end clubs
offer an almost spa-like atmosphere for topdollar; low-end offerings have just the
essentials.
Consider Equinox on the high-end. The
facilities are spotless and trendy and the
amenities are nice enough that even rich
folks are stealing the shampoo. They appeal
to the ego with exquisite marketing
campaigns of beautiful people doing
incredible things.
Compare that with Crunch, an extremely
low-cost, “everyman” gym. They market as
an anti-gym - acknowledging, perhaps, that
most Americans are far from the physical specimens seen on TV. Many of us need to feel comfortable
enough to start from square one...every couple of months. Crunch sets their price point so low that it
banks on people not bothering to cancel even when they stop going (and it works!).
Industry Facts & Figures
Over 54 million Americans paid gym membership fees in 2014, and for the second year in a row
actual visits to the gyms exceeded 5 billion! The average member visited their club over 100 times, an
all-time high.
Memberships have grown 18.6% between 2008 and 2014, and the trend continued in 2015.
Where are all these people going? In the United States there were 34 thousand fitness centers – an
increase of 6.4% over 2013. 2014 revenue of $24.2 billion was also a sharp 7.4% increase over $22.4
billion in 2013.
According to the CDC, almost 70% of Americans over the age of 20 are overweight, including 35%
that are considered obese. Conversely, awareness and education about the importance of a healthy
lifestyle continues to increase. With that better understanding is the certain knowledge that exercise
improves energy levels, decreases medical expenses and likely increases longevity.
Even consumers that have shied away from the traditional gyms are getting their groove back in
boutique workout studios, outdoor boot camps and even some online do-it-yourself programs.
Considering the social trends and membership prices in both the US and India, using the data
and your own knowledge, make a recommendation on the market you think would be best to
enter as a low cost gym operator looking to expand (20 marks)