fi tness
franchises
WORLD WORLD
FOCUS THE EXPORT MARKET I
ndia’s wellness services market – encompassing beauty and rejuvenation, slimming and fitness, and alternative treatments – is
growing at 33 per cent annually, according to an April 2010 report by global knowledge services firm Netscribes. The country also has enviable growth
predictions: in July of last year, the Economic Advisory Council to the Indian prime minister forecast a growth of 9 per cent in the economy for the current fi nancial year (2011/12). Even the more pessimistic predictions – taking into account India’s infl ation levels, interest rates and current account defi cit – suggest that growth of around 8 per cent is achievable. And this trend is set to continue:
Economist Intelligence Unit analysts predict that India’s real GDP will continue to grow by an average of 8.7 per cent a year until 2014/15. This is a market not only of burgeoning business potential but also rising consumer spending: some experts predict this will quadruple between 2005 and 2025.
In the first of a two-part series, Kate Cracknell investigates the lure of India for the international fitness franchise
Yet, in spite of this – not to mention
the reported growth of the wellness services market – the local fi tness industry is still relatively undeveloped, even when compared with those of other emerging markets. The IHRSA Global Report 2011 is now out and indicates that, with a population of 1.3 billion, China has 2,427 health clubs, 3.2 million members and annual revenues of US$1.26m; in India, only 0.41 million of its 1.2 billion population are members of 1,175 clubs – a penetration level of 0.05 per cent – with annual revenues of just US$0.5m. Compare this with established
markets such as the US – revenues of US$20.3m from 29,890 clubs and 50.2 million members, all from a population of just over 300 million – and it’s easy to see why India and China are both seen as high potential markets. But India in particular seems to be grabbing operators’ attention. It’s set to
More than 65 per cent of the Indian population are below the age of 35
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healthclubmanagement.co.uk/digital
overtake China as the most populous country in the world by 2025-2030, with English relatively widely spoken and a demographic split that favours health clubs: some reports claim more than 50 per cent of the Indian population is aged under 25, with more than 65 per cent below the age of 35. Little wonder, then, that a number of international fi tness brands are lining up to enter this market. According to The IHRSA Global Report
2011, the market is led by local operator Talkwalkars, with 100 clubs, followed by international franchises Gold’s Gym (50 clubs) and Snap Fitness (22 clubs). Franchises are also leading the latest surge of international interest: women- only operations Curves and Vivafi t have recently announced plans to enter India. This focus on franchising is perhaps
not an unexpected situation given the complexity of doing business in India, with its high levels of bureaucracy, and the invaluable local knowledge and existing contacts that a master franchisee can bring to the table. But even then it’s not always easy. We talk to a number of fi tness franchises either already operating in, or looking to enter, the Indian market about the opportunities and challenges it presents.
july 2011 © cybertrek 2011
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