Work­ing up a sweat

As the re­gional fit­ness mar­ket con­tin­ues to take strides, we look at some of the play­ers dis­rupt­ing the in­dus­try

Gulf Business - - FEATURES - ROBERT AN­DER­SON

As the re­gional fit­ness mar­ket con­tin­ues to take strides, we look at some of the play­ers dis­rupt­ing the in­dus­try

DE­SPITE A RE­GIONAL rep­u­ta­tion for in­ac­tiv­ity, the Gulf fit­ness mar­ket has en­joyed some­thing of a se­cond wind in re­cent years spurred by for­eign in­vest­ment and gov­ern­ment drives to im­prove the health of cit­i­zens and res­i­dents.

From a state per­spec­tive, sports and fit­ness ac­tiv­i­ties are in­creas­ingly seen as a means to ad­dress key health­care chal­lenges – namely high rates of obe­sity and di­a­betes linked to un­healthy life­styles.

Ac­cord­ing to 2016 data from the World Health Or­gan­i­sa­tion, obe­sity rates in adults range from 37.9 per cent in Kuwait to 35.4 per cent in Saudi Ara­bia, 31.7 per cent in the UAE, 29.8 per cent in Bahrain and 27 per cent in Oman. A 2017 study by US-based Stan­ford Univer­sity placed Saudi Ara­bia as the least ac­tive coun­try glob­ally.

Alarmed by some of these statis­tics, there has been a grow­ing move­ment across the re­gion to en­cour­age peo­ple to get ac­tive.

In Saudi Ara­bia for in­stance, the 20172018 aca­demic year saw school­girls able to take phys­i­cal ed­u­ca­tion classes for the first time, while that same year the first li­cences were also granted to women’s gyms.

A grow­ing re­gional cal­en­dar of sport­ing and fit­ness events also in­di­cates the in­creas­ing im­por­tance be­ing at­tached to the is­sue, with Dubai’s Fit­ness Chal­lenge pro­vid­ing one of the most prom­i­nent ex­am­ples.

The 2018 edi­tion, which took place from Oc­to­ber 26 to No­vem­ber 24, saw more than one mil­lion peo­ple par­tic­i­pate in ac­tiv­i­ties in­clud­ing over 8,000 free classes of­fered in 250 lo­ca­tions across the city. The ex­panded pro­gramme spanned five ded­i­cated fit­ness vil­lages and 30 events in­clud­ing The Color Run, XDubai Spar­tan Race, Da­man City Swim, the X3JR Triathlon and the Emi­rates NBD Unity Run.

This en­thu­si­asm has helped at­tract a grow­ing num­ber of fit­ness-re­lated star­tups to Dubai in­clud­ing Amino App, which went live in Septem­ber. Founder and CEO Anis Nasr says his in­spi­ra­tion for the ser­vice, de­scribed as the Uber for per­sonal train­ing, came from a ca­reer in fi­nance in the city where he no­ticed his col­leagues strug­gled to get ac­tive.

“Un­like me, they were mar­ried and of­ten had chil­dren. They didn’t have the lux­ury of ded­i­cat­ing two hours a day af­ter work to travel to a gym and work­out,” he ex­plains.

“It was the recog­ni­tion of this chal­lenge that so many of my work col­leagues were ex­pe­ri­enc­ing that in­spired the idea for Amino App.”

In­vest­ment op­por­tu­ni­ties

The bur­geon­ing mar­ket for fit­ness ap­parel, with ma­jor sport­ing brands lin­ing the halls of the re­gion’s malls, of­fers some in­sight into the op­por­tu­nity busi­nesses see in ad­dress­ing the re­gion’s health­care chal­lenges. But there are also some sur­pris­ing play­ers get­ting in on the ac­tion.

In May 2017, for­mer box­ing world heavy­weight cham­pion Mike Tyson an­nounced plans for a fran­chise of fit­ness cen­tres span­ning Gulf ci­ties like Dubai and Abu Dhabi, as well as the wider world. This was fol­lowed in July this year by plans from Amer­i­can four-time Olympic gold medal sprinter Michael John­son to open a 38,750sqft Michael John­son Per­for­mance fit­ness cen­tre in Dubai.

The next month, lo­cal sports book­ing firm Du­plays opened a co-work­ing space ded­i­cated to sports, fit­ness and well­ness pro­fes­sion­als in Dubai’s Jumeirah Lake Tow­ers.

“We have been work­ing in the sports and fit­ness in­dus­try in the re­gion for al­most 10 years now, and have seen the grow­ing de­mand for pro­fes­sion­als want­ing to es­tab­lish their own busi­ness,” says Du­plays founder Ravi Bhusari.

Other big an­nounce­ments have taken place in re­cent months.

En­cour­aged by the mar­ket's po­ten­tial, Bahrain-based Ar­capita an­nounced an in­vest­ment in Saudi fe­male-only bou­tique gym chain NuYu in Oc­to­ber.

“The fe­male fit­ness seg­ment in Saudi Ara­bia is vir­tu­ally un­tapped with a pen­e­tra­tion rate of less than 1 per cent,

From a state per­spec­tive , sports and fit­ness ac­tiv­i­ties are in­creas­ingly seen as a means to ad­dress key health­care chal­lenges

while hav­ing one of the high­est rev­enues per mem­ber glob­ally,” says Ar­capita’s chief in­vest­ment of­fi­cer Martin Tan.

“Given Saudi Ara­bia’s young and grow­ing pop­u­la­tion, com­bined with ris­ing health aware­ness in the king­dom, there is sig­nif­i­cant po­ten­tial for out­sized growth within this highly un­der­served seg­ment.” That same month US book­ing app Class­Pass launched in Dubai af­ter se­cur­ing $85m in fund­ing from Sin­ga­pore-based Te­masek in­vest­ment com­pany.

“We’ve been blown away by the re­sponse. We had so many leads in the first two weeks and the num­bers have been fan­tas­tic. We’re very happy with how Dubai is go­ing,” says Class­Pass ex­ec­u­tive chair­man Payal Kadakia.

“It’s such a fit­ness crazy mar­ket es­pe­cially com­pared to a lot of the other Asian Mid­dle East­ern mar­kets.”

Last month also saw the open­ing of US sportswear brand Nike’s largest Mid­dle East and North Africa store at Dubai Mall.

The shift­ing fit­ness model

A UAE fit­ness mar­ket out­look re­leased in June by Ken Re­search pro­vides some in­sight into the gen­eral mar­ket op­por­tu­nity.

Ac­cord­ing to the com­pany, the num­ber of or­gan­ised fit­ness ser­vice cen­tres in the emi­rates is ex­pected to grow rapidly to 1,400 out­lets by 2022 due to grow­ing pen­e­tra­tion by ex­ist­ing play­ers such as Fit­ness First, Gold’s Gym and Life­line Well­ness but also a wealth of new en­trants fo­cus­ing on spe­cial­ist classes.

“De­mand for zumba, pi­lates, cross fit and mar­tial arts is ex­pected to in­crease sig­nif­i­cantly over the com­ing years. Group ex­er­cise classes are more en­er­getic and re­sult ori­ented and at­tract all ages of peo­ple

“The one-siz­e­fits-all ap­proach of tra­di­tional gyms doesn’ t work any­more. To stand out to­day, you need to de­liver a cus­tomised ser­vice with a per­sonal touch.” ANIS NASR FOUNDER AND CEO AMINO APP

ir­re­spec­tive of their gen­der,” ac­cord­ing to the firm.

One trend new en­trants to the mar­ket in par­tic­u­lar are cap­i­tal­is­ing on is a shift away from tra­di­tional gyms.

Class­Pass’ Kadakia, who founded the ser­vice back in 2011 af­ter strug­gling to find dance classes, says it is im­por­tant to “cater to the ex­pe­ri­ence of the cus­tomer”, es­pe­cially when they have a grow­ing choice of fit­ness op­tions.

“Any place that’s built on this idea of ‘we don’t care if you come and give us money for months or years on end’, I just think that men­tal­ity is flawed in terms of what your in­cen­tives are from a busi­ness per­spec­tive and cus­tomer ex­pe­ri­ence stand­point,” she says.

Class­Pass is now eye­ing other Gulf mar­kets for po­ten­tial ex­pan­sion and also plan­ning to move into ar­eas around fit­ness like sa­lons, med­i­ta­tion, well­ness and mas­sages.

“We see that al­ready be­ing a pretty preva­lent way of peo­ple liv­ing like that here, es­pe­cially in Dubai, so we’ll prob­a­bly be adding those ser­vices to the plat­form in those other cat­e­gories and one day po­ten­tially even ex­pand be­yond that.”

Amino App’s Nasr also ar­gues Dubai res­i­dents in par­tic­u­lar have been shift­ing away from of­ten “over­crowded and im­per­sonal” tra­di­tional gyms in re­cent years in favour of more per­son­alised ap­proach.

“To­day, they [res­i­dents] have dozens of op­tions from bou­tique gyms, boot­camp stu­dios, and even ob­sta­cle course train­ing,” he ex­plains.

“The one-size-fits-all ap­proach of tra­di­tional gyms doesn’t work any­more. To stand out to­day, you need to de­liver a cus­tomised ser­vice with a per­sonal touch.”

He be­lieves new fit­ness play­ers like his per­sonal trainer app are ful­fill­ing a key need within the mar­ket as gov­ern­ments en­cour­age the pop­u­la­tion to get ac­tive.

“The right so­lu­tion will fo­cus on two pil­lars: ed­u­ca­tion and ac­ces­si­bil­ity. In terms of ed­u­ca­tion, fit­ness in­dus­try pro­fes­sion­als need to proac­tively ed­u­cate clients about how they can in­cor­po­rate fit­ness into their life­style rather than into their sched­ules.

“Next, as res­i­dents be­come in­creas­ingly aware and will­ing to par­tic­i­pate in ex­er­cise ac­tiv­i­ties, we need to make fit­ness ac­ces­si­ble. That means hav­ing dif­fer­ent forms of ex­er­cise to suit dif­fer­ent pref­er­ences, set­ting prices that are af­ford­able, and of­fer­ing flex­i­bil­ity in terms of when and where to ex­er­cise.”

With the health and fit­ness club in­dus­try worth $619.88m in Saudi Ara­bia, $380.19m in the UAE, $239.94m in Kuwait, $65.06m in Bahrain and $60.5m in Oman in 2017, ac­cord­ing to Statista, there is clearly plenty of op­por­tu­nity to go around.

And for many busi­nesses the work­out may be only just be­gin­ning as they box, cy­cle and dance their way into the con­sumer mind­set.

The 2018 Dubai Fit­ness Chal­lenge saw free ac­tiv­i­ties and classes take place across the city

OP­PO­SITE PAGE: Class­Pass is cater­ing to de­mand for spe­cial­ist classes through its sub­scrip­tion model TOP: Dubai is prov­ing to be an at­trac­tive mar­ket for fit­ness pro­fes­sion­als

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