Why this is important to Wisconsin businesses: With a growing consumer appetite for fitness, the sector is growing at 20 to 30 percent per year.
The fitness industry in India, which constitutes more than 20 percent of the country’s overall wellness market, is growing at a rate of 30 percent. This growth is driven by economic growth, rapid urbanization, increasing disposable per capita income, and changing lifestyles. Increasing incidence of diseases like obesity and diabetes, coupled with the rising consciousness of people to feel healthy, good and confident, has fueled the growth of fitness centers in the country. The estimated value of the fitness market in India in 2017 was $14 billion. The retail market for fitness in India was valued at $1.03 billion.
People are increasingly opting for wellness and fitness choices in India not only in the urban areas and cities, but also in tier 2 and tier 3 cities. On an average, around $1.6 million is spent on opening a fitness gym in India.
Multinational fitness chains and gyms are taking the franchisee route to enter the Indian subcontinent. Considering the size of India’s upper- and middle-class populations, there is ample space in the market for more and more such players. As competition increases, the possibility of growth also increases in the fitness industry. Given the diverse and disorganized Indian market, franchising is quickly catching up to other models. Many are using the franchising route to scale up their operations and also to tap into a larger client base. This provides opportunities for Wisconsin companies to enter the fitness market in India through the franchise mode of operation.
Several domestic and global corporations, particularly companies in information and communications technology and business outsourcing, have boosted the industry by installing in-house fitness centers and health clubs within their office premises. The hospitality industry is also following the trend. Domestic and international hotel chains have several existing projects in India, and many others are in the pipeline. Hotels in smaller cities, too, are providing gyms to cater to the demands of the new age health-conscious customers. Small home gyms are also coming up in the houses of business tycoons, industrialists, sport icons, celebrities, socialites and fitness enthusiasts who can afford the price and the space. Big and established fitness chains and gyms are diversifying their product and service portfolios to tap into the fitness market in every way possible and reach out to potential customers. Many such companies have acquired public equity to fuel their growth plans.
However, the fitness industry’s high potential is plagued by its fragmented, unregulated and disorganized nature, as mom-and-pop gyms make up the majority of the market. The organized fitness segment constitutes only 25 percent of the overall fitness industry in India. Key challenges facing the industry include a lack of skilled manpower and rising real estate prices. The real estate cost and capital expenditure eat into the profitability of these businesses, and as a result, fitness centers today face challenges in generating high return on investment in the business. The fitness industry is also lacking private equity investments.
Undoubtedly, India’s fitness industry has great potential. It is a sunrise sector, poised to grow by 20-30 percent year over year. There is a need for accreditation of gyms to organize the industry. There should be a registered body of professionals, and all coaches and trainers should be certified before joining a fitness center. Furthermore, a national council should be formed to make the industry more organized and action-oriented. Moreover, as international brands enter India, they will bring rules and regulations that will help the industry to become more streamlined. There is room for even mom-and-pop gyms to be organized, but they should not compromise on the biomechanics of the equipment and ethics of the industry. Adherence to global standards, with value proposition for customers through innovation and new product offerings by big players, can be hallmarks of the sector as it grows.