Fitness has been on the rise and with that the knowledge about different diets, workout routines and programs have increased. Instagram has been a successful proponent of that move, as more celebrities are posting about their workout routines and diets. There are several Instagram models and fitness experts that talk about their journeys thereby inspiring millions in exchange.
The fitness startup space is no different. It is gaining significant attention in the media and in the minds of customers. There is a wide range of offerings in the fitness space, from monthly passes to unique workouts. However, the key metric of profit-margin still needs to be front and centre when talking about them.
One of the leaders in the space, CureFit has been growing rapidly with investments from across the board. Started by Myntra co-founder Mukesh Bansal and former Flipkart executive Ankit Nagori, itâ€™s said to take on the fitness market through three segments: Cult.fit, Eat.fit, and Mind.fit. With this, the company hopes to become a leader in the fitness space, merging with a fitness chain â€śFitness First Indiaâ€ť. The deal is said to create new avenues of growth for the CureFit brand which can now combine offline with online.
Another success story to come out of the fitness space is Healthify.Me. Theyâ€™ve reached about 13 lakh downloads and are clocking in $100 average revenue per user (ARPU) for paid users. This is a positive sign in an industry that has tried multiple avenues of growth and development.
"We've gone from 1 lakh to 13 lakh users in the past 18-20 months. If you look at Google Play stats, we have over 1 million downloads. Our ARPU on Android and iOS combined is $100 (roughly Rs. 6,700) and that is very, very high,â€ť Tushar Vasisht, Co-founder of Healthify.Me was quoted as saying.
Another company that is doing reasonably well is FitPass. Theyâ€™ve taken advantage of trendy workouts and are offering a flat fee to try these classes at any partner gym. This opens up a lot of space for flexibility for busy people and travellers to try a workout at a nearby gym. This also makes things interesting for people that get bored of the same workouts and same gyms.
â€śFitpass has been profitable since the start about one year ago. The funding gives us a bit of a runway to expand to Bengaluru and eventually, Mumbai. We plan to offer fitness videos through the app to reach people in tier-2 and 3 cities,â€ť Akshay Verma, co-founder of Fitpass was quoted as saying in an NDTV Gadgets report.
At this stage, the real issue is about producing customer success stories. Healthify.ME is doing a great job talking about all the success stories coming out. However, it may not be enough when compared to the scale of the platform and the potential in the country. The fact of the matter is â€“ everyone can lose a few kilos. That should be incentive enough for people to try out these new fitness solutions. However, there is a lack of trust building up in these apps, as people try and then donâ€™t stay consistent. In many ways, that may be the challenge that these apps are trying to cover.
â€śThe game is getting tricky for us in how to engage and retain an inherently suspicious customer who comes to the app wondering if he would be able to achieve his health goals or notâ€¦ The key metric for us is if we are able to move a customerâ€™s health parameter or outcomes in the first 15 days, he will stay for the next 3-6 months,â€ť An Economic Times report quotes Ritu Soni Srivastava of fitness app Obino as saying.
However, the problem in the fitness startup space is the loss index. The company CureFit lost 6 times of what it made in the year, leaving little room for profit beyond scale. The fitness startup space still needs that big wave of customers coming in and using the app regularly. Although deals are being done left, right and centre, the scale of these deals is also quite small, and attention is given more to the investing party.
Although India is the second largest market for fitness investment, it fails in comparison to more mature markets like US. The US bagged about $1.5 billion (64%) of the global fitness startup capital invested. India only clocked about $63 Million (7%) for that time-period. Although it is leading the rest of the world after US, it still has a long way to go. At the same time, it also poses a huge opportunity and scope to capture the market. The problem might be cultural as much as it is financial. People may not want to invest in a fitness app or band, or they may not be using it regularly.
Going the B2B way
Many fitness apps are increasing their userbase via B2B methods, partnering with hospitals and companies. Theyâ€™re trying to attract employees and managers to take part in these programs via their corporate-health initiatives. These companies invest into the app, purchase paid seats and then promote wellness and health using their platform.
Scale, in its truest sense, is whatâ€™s missing in the fitness space. Because the results are simpler in groceries (they arrive on time), logistics (the product is delivered), and education (there is an increase in grade), these industries are easier to invest in. If there is uncertainty or lapse in results, then fitness becomes a tough space to crack for all startups in it.
Views expressed are author's own