The Hindu Business Line : ‘Corporates are waking up to fitness needs’

A fit corporate means a healthy corporate. A fit employee force means higher productivity, alertness, improved job attitude and, of course, better health — a better bottomline.

P. VIVEKANAND, MANAGING DIRECTOR, FITNESSONE

Fitness, as an industry, has to grow and the people of our nation can benefit from it, but it can only be done with the help of the government, corporates and increasing awareness through the media, says Mr P. Vivekanand, Managing Director, FitnessOne.

“For instance, more fitness centres can open if Customs duty is reduced to a manageable level, considering there aren’t many R&D (research and development) facilities in India in the area of equipment manufacturing,” he adds during a recent interaction with Business Line. We had met, over lunch, on an otherwise sleepy Sunday afternoon, but Vivek is on high alert when talking about fitness.

In the developed countries where the cost of healthcare is high, stats have proved that the cost of prevention is one-hundredth the cost of the cure, he emphasises.

“For corporates the return on investment in a corporate fitness facility is as high as 6:1. Meaning, say Rs 20 lakh invested in a corporate fitness centre would bring about a return of over Rs one crore for the corporate through increased employee morale, increased productivity, decrease in sickness and thereby a reduction in medical bills and absenteeism. It helps as a tool for employee-retention and new employee recruitment.”

After having worked as a pilot in the US for nearly two decades, Vivek returned to India and opened a chain of gyms here. FitnessOne India was set up with a single gym in Alwarpet, Chennai, in 2004. A few weeks ago, his firm was adjudged the fastest growing startup in the SME category, by TiECon and CII.

Excerpts of the interview:

First, why a focus on fitness?

A fit body facilitates a fit mind. When both these are put together, a person can really blossom, and reach his or her full potential in any area. Extensive research proves our point. When you — or anybody comes out of a workout — there is feeling that the world is waiting to be conquered. It could be a life-changing experience.

My experience in fitness across the world has exposed me to various gym atmospheres and I want to provide that to the Indian gym-goer too without compromises. India is progressing in all areas. Why not in fitness is my question.

How big is the fitness/wellness industry? Globally, and in India.

Globally, in developed countries, it is huge. Fitness has achieved a mature industry status there. Gyms are a bare five- to ten- minute drive from any residence — it is a $50 billion industry worldwide. The gyms themselves are big in size, have quality equipment, and offer a gamut of other services such as childcare, tennis courts, swimming pools, cafeterias serving health foods, stores selling fitness accessories, steams, saunas, dance studios, yoga halls, etc.

In India, though, it is a different story. We are struggling to get fitness an industry status. Fitness itself is in its nascent stages. We do not have the rightly equipped gyms, nor do we have knowledgeable trainers. As per recent estimates, the industry size in India can be valued at Rs 2,500 crore — and we have just scratched the surface. The potential is tremendous.

We do have the little roadside vyam shalas, but they are not professionally run. Why, the other day someone told me that a little area in Chennai — Velachery has dozens of gyms. These ‘gyms’ — with all due respect — are not scientifically run. The ‘trainers’ there do not have the knowledge needed to train people, keep them safe and injury free.

Someone once told me she was made to lift weights every day. No warm-up needed. Naturally, she developed an injury that had her laid up in bed for six months. When you do weight training, your body needs time to recover. Because when you lift weights, your muscles develop miniscule tears and those tears need to heal — which typically takes two days — for the muscles to grow further.

What has been your experience with the awareness levels of Indian corporates towards the wellness of their employees? Can they do more? How?

I would say the Indian corporate world is waking up to the needs of fitness very rapidly. Studies conducted in India (yes, there are a few) say that a fit corporate means a healthy corporate. A fit employee force means higher productivity, alertness, improved job attitude and of course better health — a better bottomline.

Keeping fit actually controls lifestyle-related diseases such as diabetes, blood pressure, high levels of the bad cholesterol, even some types of cancer that occur due to excessive fat accumulation. Of course, caring corporates do things like making exercise mandatory and take up gym memberships for their employees.

We also have a division called the FPO (Fitness Process Outsourcing) which enables the corporate world to set up gyms on their premises. We provide them with the right equipment at the right price along with the entire gamut of required soft skills like trained trainers, nutritionists and physiotherapists.

Can you explain the economics of corporate fitness?

Smaller corporates with less than 50 employees could opt for a corporate rate at the local health club. Good visionary corporates provide an allowance for the gym membership — not only for the employee — but also for their families. This is an established practice in the developed countries. Larger corporates could opt for an in-house fitness centre.

Generally, the economics would depend on the number of employees that need to use the facility. The investment in equipment would range between Rupees ten lakhs to Rupees one crore for the top international brands (e.g. Life Fitness, Precor) and 30 per cent less for Asian brands (e.g. Propel). The ongoing investment in fitness trainers, nutritionists and physiotherapists and maintenance of equipment would range between Rs 20,000 and Rs 2,00,000 per month.

Do you think that fitness can be a good proposition as an SME business model? What are the roadblocks or challenges it currently faces?

It is a wonderful business opportunity and a sound business model if one has the proper fitness management backing. Typical investments in a co-ed or women’s only fitness centre ranges between Rs 40 lakh (for the women’s only) and Rs two crores (for a co-ed).

Due to our negotiated volume purchasing power we have successfully brought down the investment into fitness equipment lower than the relative cost of real estate deposits and improvements (interiors, locker rooms, etc). This is also due to the reduction in Customs duties and the appreciating rupee against the US dollar.

In our first centre that opened in 2004, the investment in equipment was 20 per cent higher than that in interiors and rental deposits. Today, it is the opposite. Another factor is the sky rocketing real-estate cost, which is the single biggest constraint for any industry.

All our centres break even in the first month. The return on investment happens between one-and-a-half and three years. We are further improving our business model to get the entire investment within one year of opening centres.

Are our policies and tax laws in favour of wellness as a priority?

No, they are not. In some developed nations, the fitness centre membership is tax-deductible. Other nations such as the US are lobbying for it, and it comes from a mindset that the investment made in prevention for the individual or corporate is far more productive and cost-effective than the medical expenses involved in the cure phase. Research has proven this beyond doubt.

Is it possible to take fitness to the nooks and corners of a country like India, with more serious problems to be tackled?

Yes, it is possible. Efforts have been initiated but are grossly inadequate. Even the serious problems would be far less if the population was fit and healthy.

The most cost-effective way to take fitness nationwide is to bring about a mandate in the education system to inculcate the nutrition and fitness habit in our young. This can be further enhanced by reserving large playgrounds or park areas for physical activity and recreation with cost-effective community fitness centres, which would be free to the public and sponsored as a CSR activity by aware corporates.

Fitness centres are more successful in urban areas due to the increased awareness and higher disposable income. In the fitness industry, we consider a 15-minute driving distance as an isochrone, typically in metropolitan cities in developed countries there are 20-25 large centres inside an isochrone, competing for business.

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D. MURALI