For Nikhil Kakkar, COO of fitness chain Gold’s Gym, time seems to be playing on repeat mode. He recalls how gyms and fitness centres were the first ones to shut last year and the last ones to open. This year too, the situation has been no different. At a time of acute uncertainty and hardship amid Covid’s severe second wave that has gripped the nation, it is the fixed costs such as rentals, salaries and electricity which are playing heavily on Kakkar’s mind.
“It is a tough time for the fitness industry. The landlords are not so supportive or cooperating as much as was the case last year. Even if one curtails expenses, it won’t make much of a difference. With revenues not coming in and costs staying fixed, how long can one really survive?” he questions.
The chain had managed 60% of its pre-Covid numbers in January and February before the spike of Covid infections in March in Maharashtra. But it all came to naught when the unprecedented surge was witnessed.
Kakkar is not the only one. Gyms and fitness studios all across the country have been fighting it out to sustain their businesses and adapt to new virtual trends amid the deadly virus outbreak. This year the challenges feel compounded for an industry which was already struggling to find a foothold after dealing with the multiple roadblocks faced in 2020. “This has come as a more severe attack. Gyms are in a terrible state. We sell equipment as well and were surviving primarily because people were buying such equipment for homes. But home equipment is also not selling now as showrooms are shut. We should be counted as essentials too which isn’t the case at present,” laments Harmeet Luthra, Founder and Chairman of fitness equipment brand Fitline India.
Fit India?
Fitness levels in India rank historically low as compared to Western counterparts. As per estimates, fitness penetration in India is below a miniscule 1% and there lies a huge potential to scale this up. The Fit India Movement, which was launched in August 2019 by Prime Minister Narendra Modi, was started with an aim to make India fitter and encourage a more physically active way of life.
Ironically, though Covid-19 made things extremely difficult for the brick-and-mortar fitness industry, it led more people to understand the significance of staying fit. Puneet Nindra, MD, The Wellness Club Gym N Spa recalls how they saw a different set of audience coming in when gyms had started functioning in the later part of 2020. “With effect from December, we saw a fresh surge of people visiting who had never included a fitness regimen in their schedules previously. Over 30-40% were new entrants and a lot of them non-exercisers and middle aged. The whole concept of immunity and preventive health had kicked off so much in the minds of people that such a change was inevitable,” he highlights reflectively.
Similar trends were seen in other gym centres where a new customer base was added during the course of last year. “More people understood what fitness can do for overall health levels and immunity building. If you look at India, not even 1% of the population goes to the gym while it is 12-15% in the case of the US and UK. With more consumers who had started engaging in a gym routine, I see this penetration to eventually multiply. This will help both the digital and brick and mortar industry in the future,” Kakkar adds.
And while personal trainers and coaches have tried to keep engagement levels up via virtual training and group sessions during the pandemic, they are of the firm belief that online won’t ever stack up to an offline model as far as the industry is concerned.
Screen fatigue setting in
Neha Motwani, Founder and CEO of fitness wellness platform Fitternity feels it is very clear that a screen fatigue has now set in among consumers. “Last year, because there was a lockdown and it was happening for the first time, people were very open to working on screen. While that sentiment is back, it is early to say if users are fine with that or waiting for gyms to reopen. It is more likely that as gyms reopen, the sentiment will be to access them and create a safer environment,” she avers.
And with more free content available online and a crunch of existing resources, many don’t want to invest in paid virtual fitness sessions anymore. Nindra vividly remembers how they took to online training in a major way last year. But it all fell through soon enough. “We were doing 3-4 sessions a day. It all lost steam in less than one month. Offline to online was initially exciting, but later factors such as people’s schedules, lack of energy, music, aura and space within homes made it go bust. The sentiment around online this year is not very positive. It is very gloomy,” he rues.
It also becomes a question of skill set as not everyone is equipped to deal with the nuance of digital training modules. So not everyone will emerge successful from such a pivot. “We have to see who can offer online and who cannot. For instance, a gym owner who has invested money in gym equipment, space, rentals etc does not have the skill set to offer online classes. That lies more with a yoga trainer, zumba coach or a fitness instructor who is presentable enough and has the facilities at home to go online and teach people,” asserts Prateek Sood, Director of Grand Slam Fitness, a manufacturer and distributor of gym equipment.
And then there is the all-important question of revenue. Experts in the industry say that they cannot offset the bulk investments made in retail establishments via virtual platforms. “Investment of an entire gym is approximately Rs 2.5 crore. Some are just 2-3 years old. And we have not recovered that money so far. Now, even if we create a virtual platform, it would be naïve for us to expect revenue on par with the offline segment,” Vinay Sangwan, Wellness Coach, Anytime Fitness explains.
Barely 3-5% of revenue generation, Sangwan adds, is via digital formats while non-virtual is what makes up most of the pie. “Offline works on a subscription model and atleast 65-70% of the revenue is through subscriptions. 35% is from the Personal Training (PT) sessions which can be taken care of on the apps as well. However, the remaining 70% – which is the mainstay – is nil in the current scenario,” he states.
Fighting fit
Given the high degree of uncertainty which gym owners faced last year, many of them changed their model for better preparedness in the future. Kakkar of Gold’s Gym, for example, says that they intend to keep a mix of 80:20 ratio for physical formats and digital in the times to come. Gym sizes would be reduced from 7000-10,000 sq ft to 5000-6000 sq ft. “The idea is to reduce the CapEx and operating costs so that rentals, expenses and fit out costs would come down. Only then can the model be successful and payback better,” he states.
Currently the chain is trying to engage members more through digital mediums and carrying on offline operations in cities which are not under lockdown.
For The Wellness Club Gym N Spa, changes have ranged from varied concepts of exercise to compactness of gym centres. While earlier they primarily focused on gymming, they have now incorporated group fitness and cross fit training workouts also into the mix. This, in turn, helps to keep newer people more involved and motivated. Besides this, they plan to continue their model of offering sizeable, compact and cost controlled units. “There are two segmentations – the neighbourhood gyms and the other being the multi-storied ones. Ours is in the first category of 3000-4000 sq ft which is a more sustainable model and has been a very business conscious move. The major ones to be hit will be the ones with higher expenditure model and spanning 5000-9000 sq ft as their running costs are quite high,” highlights Nindra.
Health and fitness aggregator Gympik is keeping costs low and has cut down on monthly budgets. “The new wave of Covid has impacted our topline. The number of users being added month-on-month have come down. We are waiting for things to improve so that people can start coming back to gyms for their workouts,” Amaresh Ojha, Founder and CEO, Gympik says.
Need of the hour: Rejuvenation
While gyms have been at the receiving end of the deadly virus, there is one segment that has seen an uptick in demand – yoga centres and natural healing therapies – which constitute a subset of the preventive healthcare market. A report by research and advisory firm RedSeer Consulting pegs this market to be a $100 billion opportunity for India by 2022. Healthy consumption, health monitoring, fitness, rejuvenation and wellbeing assurance make up the five components of this market, as per the report.
Yoga and natural healing therapies, which fall under the rejuvenation category, have seen a steady demand during the pandemic. For Sarvesh Shashi, Founder of digital yoga platform Sarva, the change in plan from offline centres to 100% digital businesses yielded lucrative returns. Pre-pandemic, the platform had roughly over 60 studios in over 10 cities, each accommodating 150-200 members. But in the last 12 months, downloads crossed 600,000 on their app with close to 80,000 people working out with them on a monthly basis. “We fast tracked our digital growth. Instead of June last year, we launched the app in March. Covid has increased the need for mental health and demand for improving lung capacity has gone 15X higher. One of our programmes called ‘Boost Your Immunity’ had 71,000 unique views in the last 30 days,” gushes Shashi.
It is the natural healing programmes which is drawing more people to consult Atmantan Wellness Centre located near Pune. Nikhil Kapur, Founder Director, Atmantan Wellness Centre says a visible shift has been seen with people being more aware of their health requirements now. “Our natural healing programme where we have incorporated protocols of preventive health such as naturopathy, functional medicine and aspects of homeopathy have become quite popular. We had introduced treatment protocols of over 40 conditions and had launched this in 2017. However, we have seen a significantly high number of takers for this programme in the current scenario,” he explains.
The centre, which has many residential programmes for its guests, plans to go much bigger on its digital offerings in the next 12-18 months.
The going may not be easy for the fitness industry, but they are not giving up without a fight. Finding ingenious solutions to challenges will perhaps now be inbuilt in the way they would think and operate as businesses. As Shashi of Sarva puts it, “If the need for survival is as important as the need to breathe, then I don’t think anything is impossible.”
Credit: Economic Times
