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Covid Outbreak Throttles India’s Fitness Industry

Avishek Banerjee Aug 27, 2021

Even as the nation is steadily wriggling out of the harrowing second coronavirus wave, the ominous third wave is perceived to be the next lurking predator to ready to attack by around end September or early October. To exacerbate the grim scenario, children are expected to be the most ‘vulnerable lot’ this time around with no vaccine workaround for them until next year. To top it all, Experts are also claiming that the writing is already on the wall as Kerala reported over 30,000 fresh cases for the second consecutive day on and even Delhi and Mumbai saw a slight jump in daily cases.

Amidst the commotion, there is deep-rooted pessimism that has gripped lakhs of fitness enthusiasts who are shying away from doing ‘out-of-home’ workouts at their spiffy neighbourhood gymnasiums. For instance, Abhishek Mukherjee used to shell out Rs. 25,000 per annum to work out at ‘Anytime Fitness’, Dwarka for 5 days a week before the pandemic had struck. But when the Covid-induced lockdown was imposed last year, he decided to discontinue his membership and instead opted for morning walks and ‘at home workouts’ as a safer alternative.

With the reduced turnout of gym members (and even patrons), the domestic fitness industry is in the doldrums and is barely able to keep itself afloat with the third wave looming large. The number of walk-ins declined periodically despite all outlets following the government-mandated Covid protocols, such as availability of sanitisers and oximeters, spaced out equipment and thermal screening of both staff and members.

Rayansh Thakur, Athlete, Fitness expert & Nutritionist is of the view that the pandemic had a twofold impact on the fitness industry. In his words, “The pandemic did affect me professionally. Although people realized the importance of maintaining their body and exercise, not everyone is willing to actually indulge. The realization has come in theory but hardly in practice. People are still sceptical about returning back to the gym and not everyone can opt for a virtual work out. Although we do offer free consultations, still the growth has been bleak. But as the situation improves and settles, hopefully we will be back to normal very soon.”

Gym entrepreneurs burning fingers
While smaller gyms are on the verge of shutting down, larger chains are saddled with mammoth losses and disguised unemployment becoming commonplace for many thousands of trainers and support staff. Furthermore, a lot of prominent gym owners and franchisees are either downscaling their outlets or are resorting to large-scale layoffs or even going to the extent of asking their employees to opt for furloughs (leave without pay).

Gold's Gym, the largest international gym chain in the world, which oversees nearly 150 centres and also employs 2,000 trainers across 95 cities in India, has kept its expansion plans on hold. “Rent forms a major chunk of our revenue at 25 percent, and we are seeking waivers but many landlords have not obliged yet. While payroll comprises 30 percent of our cost, electricity and water takes up 10 percent. Payments are also to be made for housekeeping, vaults, security and maintenance of equipment. So, our franchisees are running on wafer-thin margins,” reveals Nikhil Kakkar, COO of Gold’s Gym India, adding, “As per government guidelines, we had to shutter our gyms for atleast 6 months in Mumbai last year and for many months on an intermittent basis in Delhi. Ultimately, we had to close down 10 gyms permanently across various cities and now our count is 140.”

Pravesh Gaur, who owns the Fast Fit chain of gyms in Delhi and Faridabad, has already sent some of his staff on unpaid leave last year. Having incurred an approximate loss of Rs 20-30 lakh per branch, he is actively looking at other cutback measures. “Lockdowns (during first and second wave) were really tough for our industry and still is. Even though I did not close any of my gym, I was compelled to send some of my staff on unpaid leave. We are now planning to go hybrid, online as well as offline concept. Under process to develop my own online platform,” reveals Gaur, who also runs Srauta wellness.

Likewise, Kamal Sharma, owner of Fit & Fab Fitness, is shutting down his standalone centre in Bangalore. “I am shutting down my gym and opening a new one in Mysore. Even though the shutters were downed (during lockdown), the landlords are not ready to forgo the monthly rent of Rs. 50k per month.”

Most of the people quoted above were unanimous in their views that the government can provide some succour to them by facilitating interest free loan for fitness centers and should increase the time window to pay their GST

Market dynamics
Although estimating the current size of the fitness industry is a debatable exercise, a report by Redseer Consulting had pegged the country’s fitness industry, which includes equipment, sportswear, fitness services, and recreational sports, at US$12 billion in 2018. As per industry reports from FICCI, E&Y, Redseer Consulting, Global Wellness Institute, and IHRSA & Fitternity on the fitness services segment estimate that there are six million active users spending on an average US$350 to US$400 annually towards fitness services, amounting to a US$2.6 billion market size.

The number of up-and-running gyms are also not accurate. According to an estimate by Fitternity, a web aggregator for fitness outlets, there are around 24,000 gyms and studios in the country. Gympik, a health and fitness aggregator, claims that there are approximately 20,000 gyms across the country, including neighbourhood workout centres as well as nationwide chains. A study conducted by Gympik reveals that 58 percent of men join a gym for body weight training to build muscles while women were more inclined towards dance exercises – 85 percent for aerobics and 81 percent for Zumba – to achieve weight loss goals. Reducing stress and health related risks were some of the top reasons of respondents to join fitness centers.

As Amaresh Ojha, Business Head, RoundGlass Gympik puts it, “Post-Covid world fitness world is very different from the pre covid one. People are accepting the virtual training along with the regular classes. We have enabled fitness centers to conduct their classes virtually and keep the members engaged.”

Future Outlook
Market research firms predict that despite the covid onslaught, the overall fitness industry is expected to grow at an annual rate of 27 percent and touch the US$32 billion mark by 2022, of which fitness services (like gyms, slimming services, and formats like Zumba, aerobics, crossfit, etc.) will contribute around US$6.6 billion.

Many analysts are predicting the industry will now function on the ‘hybrid business model", which essentially is a combination of limited on-premise and online classes. As Sonal Singh, Co-Founder, Fittr puts it, “Anyone who wanted to continue to stay fit or begin their fitness journey amid a sedentary lifestyle, moved to virtual fitness. This further accelerated adoption of a hybrid model of online/in-person workouts that more brick-and-mortar gyms are likely to retain when the pandemic recedes.”

As per industry estimates, at-home fitness market in India is Rs. 1,400 crore growing at 40% CAGR. India when compared to other large markets like China and the US, has an at-home fitness penetration at 0.5% while it is 5% and 20% in China and the US respectively.

Mohit Mathur - Founder & CEO of OneFitPlus, India's largest FitTech & connected fitness company, avers, “Given the WFH model and our inherent need to stay fit (even more so post the pandemic), many people are opting for at-home fitness. The unorganized private fitness training market is seeing the impact of it in certain metro pockets. But at a macro level, we are seeing a huge spike in the on-demand at-home fitness segment.”