MUMBAI: Sports, fitness and wellness (SFW) in India, a large market with robust growth drivers, will reach a value of $90 billion by 2022, according to a new report released by Praxis Global Alliance Report.
The report, put together by the global business research and solutions firm, along with its thought partner YourNest, an early stage venture capital fund, sees the SFW sector, sized at $35 billion in 2016, growing at a CAGR of 17% to touch $90 billion in 2022.
The report highlights that demand for SFW products and services globally grows exponentially at per capita income of $4,000, and that the Indian market is at the cusp of a rapid growth with per capita income currently standing at $1,700, offering massive growth headroom.
Opportunity is being created not just in SFW, but more importantly, in peripheral products/services like gear, apparel, food items and several other brand extensions (>2.5 times the opportunity than sports itself), the report notes.
While developed markets like South Korea and Canada have per capita spend on sportswear and functional food at $128 and $45 respectively, India has a huge growth headroom with current per capita spending on sportswear and functional food market standing at $7.70 and $2 respectively.
The key factors driving the Indian SFW story are robust demand growth drivers – affluence, sedentary lifestyle, increasing awareness about health and fitness; backed by supply drivers – development in sports infrastructure, more trainers and greater advertising spend backing sporting events.
According to the report, growth in the SFW segment will be driven by categories like beauty treatments, fortified/ functional packaged food, sports, personal care products, beauty centers and dietary supplements that are likely to grow at a CAGR of 20-30% till 2022. In this regard, it is worth noting that health food variants of several brands are already more than 25% of the staple flagship variants.
This trend is evident as new sports leagues are emerging, more corporates/residential complexes are creating facilities, new health focused TV channels are seeing viewership growth and the mass consumer is diversifying beyond just cricket, the report avers.
Several brands have extended their brands and offerings to SFW and will create bigger plays (e.g. Harley gear > Harley bikes)
SFW is attracting investment not only from VC/PE but several profitable verticals like apparel, personal care and consumer services, which are pumping in money to ride this growth wave, among which are:
*Consumer services businesses (yoga, gym, spas and salons, ayurvedic centers, etc)
*Consumer products (yoga mats, organic foods, sports merchandise, etc)
*Specialized high-performance apparel and personal care goods (functional food, sweat-resistant apparel, marathon shoes, etc)
*Infrastructure (training academies, amateur sports facilities, coaching in schools, etc)
In this space, large brands and retail footprint is already being created (e.g. Decathlon crossed Rs 10 billion in sales).
