Will online fitness be the next edtech in a post-pandemic world? Perhaps, it is a question on which millions of dollars will be bet over the next few months. While the overwhelming answer might be a ‘Yes’, ask Cure.Fit. Their top executives feel fitness will continue to be a mix of physical and online.
The company estimates while online business might have jumped to 90 percent in recent times, it will eventually settle at 30 percent of the overall revenues in the coming year. This number was a meagre 5 percent in the pre-COVID world. The physical gym business, from 10 percent of the overall revenue currently, will reach 70 percent of the overall business.
“The average revenue per user for offline is much higher, compared to online, but the good thing for online is that it opens a much larger pool of users,” said Naresh Krishnaswamy, head of growth at Cure.Fit.
For instance, the gym brand Cult.Fit will go global, but not through physical expansion. It will only be digital. Within the country, the target is to reopen all 200 centres by January, and, may be, after the second quarter of next year, the leadership will evaluate opportunities around opening new centres again.
“We had opened our first international centre in Dubai just before the pandemic struck. It was bad timing. Going forward, our digital offerings will be taking us international,” he said.
Cure.Fit had to realign internal teams and management to adapt to the new scenario. The switch from 95 percent offline to almost 90 percent online has meant that many of their teams had to be shuffled with technology assuming the centrepiece. From live group classes to energy trackers to group workouts, all features were aggressively rolled out by the company through the pandemic.
Shamik Sharma, who heads the digital initiatives at Cure.Fit, pointed out that the company has not hired aggressively, rather restructured employees to work on technical projects.
“Over the last six months, we might have grown our tech team by a modest 10 percent, but yes, our internal focus has shifted online drastically,” he said.
Cure.Fit was in the news recently for letting go of trainers and cutting salaries of staff across verticals. Now that the centres have started reopening, it is looking to bring back the trainers from furlough.
Not only through gyms, the allied e-commerce vertical is also helping Cure.Fit through these times. The company has achieved a gross merchandise value of $5-$6 million, doubling this line of business through the last few months. Products like gym mats, dumbbells, kettlebells have supported this growth.
New business push
Cure.Fit is working on a specific strategy to join hands with partner gyms and create an ecosystem, where consumers can buy a common membership for multiple centres. These centres will be affiliated with Cure.Fit, and consumers will be able to choose which centre they intend to visit for which activity.The startup has just begun this endeavour and intends to double down on these partnerships. This will help local professional gyms to attract footfalls, and, at the same time, increase convenience for users.
“If someone likes to do weight training at a specific centre and attend Zumba classes in another, that will become possible in future. We are slowly trying to build this network,” said Krishnaswamy.
The manner in which COVID-19 has hit the local small-scale fitness centres, Cure.Fit believes these partnerships will help them get footfalls, and, in turn, help Cure.Fit expand their footprints across new geographies.
While nothing has been planned yet, Krishnaswamy said in the future, it might also give Cure.Fit a chance to acquire centres or help them raise capital. Getting demand back in the market is the key and Cure.Fit intends to play a role when the market gets back to normal or near-normal.
Online opens fresh opportunities
The Accel-backed company, which had raised Rs 832 crore in equity funding in March from Temasek and others, has garnered around 75,000 paid subscribers through the last four months, mainly for its online content business. Fitness enthusiasts who could not go to gyms were looking for classes online and Cure.Fit grabbed the opportunity.
They started with celebrity instructors as an initial hook and have now moved over to professional instructors to grab market share in a highly competitive online fitness market. Overall, the company has over a lakh paid subscribers just consuming their services online and another 2.2 lakh subscribers using offline services.
“We have diversified our product for different target groups like children, older people, people looking for therapy sessions and others,” said Krishnaswamy. Over a lakh sessions are being conducted daily on the platform by trainers from India and abroad.
The online push will continue and Sharma pointed out that, for the next few months, members will prefer to work out from the safety of their homes. But he believes things will eventually change again, and, by next year, members will get back to physical centres.
The big challenge now
Cure.Fit, which was founded in 2016 by top executives of Myntra and Flipkart, Mukesh Bansal and Ankit Nagori, wanted to transform the idea of physical exercise for urban India. With deep-pocketed investors sold on its strategy, it saw a blitzkrieg growth over the last two years, till COVID-19 struck.
Now closed centres, rental payments, the salaries of a large trainer base, coupled with tumbling new memberships, all were looking like a drag on the balance sheet. The company admitted to having lost $10 million in the first three months of the pandemic, in an open letter to its employees earlier this year.
“I think the future is online, it will not be a quick turnaround for the offline-gym industry,” said a founder of an online fitness startup.
Now, with centres slowly opening and even with 40 percent occupancy, Cure.Fit is confident a turnaround is set to happen. Continuing their focus on the omnichannel strategy, they are betting big on users getting back to centres. They believe people are raring to get back to their ‘normal’ lives, even if that means using sanitisers before touching any equipment or wearing a mask all the way to the gym floor or standing few metres apart from everyone else.