The organised fitness market is concentrated in top eight cities of India (NCR, Mumbai, Bangalore, Chennai, Kolkata, Pune, Hyderabad, Ahmedabad) with more than 60 per cent of outlets of top dozen chains located in these cities. However, going forward, while the market will continue to grow in these cities (which are still under penetrated), given the high real estate costs in these cities players will increasingly be looking at tier 2 and 3 cities for growth. Hence, a higher growth in the premium and mid-end of the market is anticipated.
The under penetration of fitness centers and high growth presents itself a good opportunity for both domestic and international players. Current scenario has a few pan-India/ regional chains and numerous local neighbourhood centers. Organised fitness centers market still small and estimated to be less than a third of the market.
The key challenges are:
* Real estate is the biggest challenge — Location of fitness centers is critical. They need to be close to neighbourhoods or near offices. Most consumers are unwilling to travel more than 15-20 mins for fitness center, hence catchment for a center is limited. Increasing rentals in key locations in large cities is one of the biggest challenges in expansion of centers.
* Manpower — Well-trained instructors and trainers in this industry is critical (and a big differentiator) and at the same time they are scarce given the nascent nature of the sector.
* Service standardisation —In the service industry, achieving standardisation across different outlets is challenging and even more so where human intervention is high as in case of fitness centers.
* Adapt proposition to smaller cities — Organised chains will have to tailor their services and pricing for markets in smaller cities of the country.