Market will shift toward organised gym players in a decade: Curefit CEO

Bengaluru: Fitness startup Curefit, which is popular for its gym vertical Cult.fit, boasts a significant market share in India’s fitness industry. Backed by the likes of Zomato and Tata, the startup is valued at $1.47 billion (as of May 2024). The company has also a stream of acquisitions under its belt, including around 11 acquired in just the past five years. Naresh Krishnaswamy, CEO of Curefit spoke of the company’s plans for further growth and a market shift to organised gym players in a conversation with DH’s Anushree Pratap. Edited excerpts:

What gaps do you see from unorganised players in the fitness industry?

There are not enough organised gym chains in India. As a result, the quality of the gym, equipment, trainers, customer experience, hygiene levels - all of this is completely broken in the unorganised segment and understandably so. That is where unorganised teams, which don't have technology to back their operations up, struggle - and that's where we see a big gap.

Will organised players replace unorganised gym players over time?

Yes, I see a shift happening from unorganised gym players over the next 5-10 years. Over time, customers will be more discerning as well. They will demand a certain level of quality from the brands they see, and that is a distinct advantage that organised gym players have. Just economies of scale; when you are running many gyms you are able to get a lot more advantages in terms of running operations.

You been on an acquisition spree the past few years. Do you see the industry consolidating in due course, with only a few players left?

If you just take the US, there are hundreds of organised teams which will have anywhere from 50 gyms to thousands of gyms. Long term, there is room for many brands in the gym space in India. Now whether a lot of those brands are owned by one holding company or not, I don't think that matters to consumers. For example, we have Gold's Gym, Fitness Plus in our portfolio. In the consumer mind, there are different brands and there are different value propositions for each. The fact that we own each of them is just incidental.

Can you speak on your long-term strategy for acquisition?

We've looked to acquire good quality brands or even single gyms. Our biggest acquisition was Gold's Gym in 2022. We felt that as Curefit is growing, we will need multiple different brands having a different positioning in the consumer's mind. That being said, there aren’t infinite acquisition candidates in India because there aren't that many organised chains. I don't think we have made any meaningful acquisitions in the last two to three years (since Gold's Gym) and I don't expect to be doing too many more in the next few years as well.

What is the current break-up between Curefit’s metro and non-metro revenues? What is your expansion strategy?

Almost 85% would be metros and 15% would be non-metros. We are present across 40 cities but the majority of our gyms are in the top 4-5 cities. Gyms are a density business so you are better off entering city by city and going deeper rather than going very wild.

We are expanding our focus beyond the top four cities (Delhi, Mumbai, Bangalore and Hyderabad) over the next 2-3 years, to 5-10 cities like Chennai, Pune, Lucknow, Chandigarh, Nagpur. Once we are well penetrated in those cities, we will expand beyond that.

How has your e-commerce arm Cultsport been performing? What is your target to achieve profitability?

E-commerce is our growth arm - it is where we are seeing fastest growth. It is currently contributing to about one-third of the business. This area has a very large market; if you just take apparel and footwear, they are each individually bigger than the fitness category in itself. But this is not what is going to get us to profitability. It is the core gym business that is already profitable, currently contributing to two-thirds of our revenue. Our target is to achieve full company profitability at some point during this financial year.