<aside> <img src="/icons/playback-fast-forward_yellow.svg" alt="/icons/playback-fast-forward_yellow.svg" width="40px" /> Navigation

</aside>

Objective

Generate INR 12 crore in revenue within 12 months without discounting products below B2C pricing

Fitness Market Segmentation

Market Segmentation by Product Type

Market Segmentation by Distribution Channel

Competitive Landscape: Porter’s 5 Forces

Threat of New Entrants: Low to Medium

• While fitness is a fast growing industry in India, it requires significant capital investment to achieve scale.
• Cult has built strong brand loyalty and a community of advocates through high-quality services and a network effect, making it challenging for new entrants to compete. The emergence of Orangetheory Fitness, which operates similarly and already has three locations in India, poses a potential threat. They plan to expand to 50 locations by 2028. While they operate at a higher price point and offer fewer services, Cult should remain vigilant. (https://insider.fitt.co/orangetheory-fitness-grows-in-india/)
• The operational know-how required to create a Phygital ecosystem that focusses on overall well-being deters new entrant as well.

Bargaining Power of Suppliers: Low to Medium

• Cult benefits from backward integration with its own line of equipment and digital platform, reducing supplier dependence.
• The primary supplier influence comes from property owners of rental spaces. High footfall locations in Tier 1 cities give property owners leverage in lease negotiations. The property prices in urban centres are rising. Along with inflation, this could be limiting factor for expansion, especially in smaller cities, where the customer base may not justify the overall expenses.

Bargaining Power of Buyers: Medium to High

• Customers have multiple options in the fitness market, increasing their power to choose and negotiate. However through acquisitions (as we see in “Industry Rivalry”), Cult already has a significant market share and owns the biggest gym chains in India. Thus for a consumer, this just creates a choice mirage.
• There are also a plethora of apps available in the gym, mental well-being, and sports space, such as FITPASS, Growfitter, Calm, Headspace, Hudle, etc. But none of them offer an all-in-one experience such as Cult, thus limiting the choice for a user looking for a go-to option for overall wellbeing.

Threat of Substitute Products: Medium

• Alternatives such as home workouts, online fitness apps, yoga, and other wellness solutions can attract Cult's potential customers.
• Despite the lack of a holistic offering from other apps, customers may use a combination of substitutes to meet their fitness needs, posing a moderate threat.

Industry Rivalry: Low

• The fitness industry is generally saturated with numerous competitors ranging from local gyms (unorganised sector) to large chains. However when we see the last available data from 2020, we can deduce that Cult currently has the highest market share since it has since then acquired Gold’s Gym and Fitness First.
• While brands like Ozone, Fitness One, and Anytime Fitness exist, none match Cult's omnipresence or provide a similarly holistic experience. Although Anytime Fitness offers an app, it lacks the comprehensive features of Cult.

Environment Analysis: PESTLE

Political

• Government has recently taken up the issue of health and nutrition in India. Over the past years, there have been several initiatives promoting health and fitness such as Fit India Movement, Poshan Maah, etc. This could be great for increasing awareness about fitness, nutrition, and overall well-being.

Economic

• A steady rise can be seen in disposable income and consumer spending in India over the past years and the trend is expected to continue. This indicates a growth in consumer spending on well-being.

Social

• Current Landscape: Only 0.2% of the Indian population has a gym membership, but the trend is growing among Millennials and Gen Z. A recent study has pointed out that 50% of gym members in India are Millennials, followed by Gen Z at 40%, with overall 63% of all gym members being male (Statista Consumer Insights Report, Sep 2024).
• Rise in Health & Wellness Awareness: The emphasis on health and wellness, particularly after COVID-19, has heightened fitness awareness among Indians. A FICCI survey reveals that 72% of urban Indians acknowledge the advantages of regular exercise, driving participation in fitness programs.
  • With urban areas expected to accommodate 40% of India's population by 2025, there has been a 15% increase in urban households participating in regular physical activities, thanks to improved access to fitness facilities and greater health awareness.
  • Additionally, social media and influencer endorsements have significantly boosted this trend.
• Corporate Well-being: The toxic work culture in India has gained attention, particularly following the death of a Big 4 employee, which spurred public discourse. The WHO has identified chronic inactivity as a key factor contributing to occupational burnout and elevated stress levels in the workplace. The Harvard Business Review reports that investing in employee fitness can lead to an impressive sixfold return on investment across various industries, underscoring the importance of wellness initiatives.
  • Yet, a study by Economic Times and FITPASS reveals that only 24% of current wellness programs are proactive, leading to a 77% dissatisfaction rate among employees. ****Employees seek personalized fitness support, with 53% seeking access to fitness centres and 41% seeking nutritional guidance.
  • A staggering 91% of employees believe that a comprehensive wellness program increases loyalty, while approximately 69% indicated their organization does not provide access to a digital solution for personalizing health and wellness benefits.
• Convenience as a Priority: 66% of gym and fitness club members state they gladly pay for services that enhance convenience (Statista Consumer Insights Report, Sep 2024).

Technological

• Wearable Tech: Technology has enhanced fitness accessibility and efficiency, with wearable tech ****like smartwatches reaching an 18% penetration in urban areas by 2024 (TRAI).
• Recently, the popularity of virtual fitness classes and mobile apps has surged, with a 65% increase in app downloads year-on-year, according to App Annie. In a survey conducted regarding health and fitness service purchased in India, Gym Membership and Online Services came out on top with 27% and 24% respectively. (Statista Consumer Insights Report, Jun 2024)

• Digital Health & Wellness market insights: We can see that the overall revenue of the market is expected to almost double by 2028. A significant rise can be seen in the projected revenue for Nutrition apps, whereas the Fitness and Meditation Apps seem to be growing overall but flatlining towards the end. We can also infer that the Fitness Apps enjoy the highest market penetration rate but the lowest ARPU whereas the Meditation Apps seem to have a very low penetration rate but the highest ARPU. Nutrition Apps seem to be the holy grail, with a high penetration rate and a high ARPU.

Legal

• Compliance with labor laws and health regulations is essential for operations. Though the regulatory compliance varies as per the state, the overarching government regulations about fitness centres, weight-loss programs, and nutriotional advice have been to some extent clarified in The Gymnasium & Fitness Centre (Regulation) Bill of 2015. https://sansad.in/getFile/BillsTexts/RSBillTexts/Asintroduced/gym-237w-E.pdf?source=legislation

Environmental:

• There is a growing emphasis on sustainable practices especially amongst the Gen Z and late Millennials.

Side Note: I think we covered enough, so I will quickly go over swot

Overview of Cult B2B Business

Cult's B2B business encompasses various segments aimed at providing comprehensive fitness solutions. This includes:

1. Franchise: Cult offers franchise partnerships for entrepreneurs looking to establish gyms under the Cult brand, leveraging its operational expertise and brand recognition.
2. Cultpass: A membership program that provides access to a network of gyms and fitness facilities, catering to both individual users and corporate clients.
3. Cultpass Corporate: Focused on employee wellness, this segment provides organizations with fitness programs and resources to enhance employee health and productivity.
4. Cult Sports Equipment: A division that supplies high-quality gym equipment and setup solutions, supporting both new and existing gyms with a wide range of products and services.

Key Insights from Strategic Analysis for B2B Sales Strategy

Brand Loyalty & Community Strength

Cult enjoys a strong brand awareness and has great brand associations to health and well-being, cultivated through high-quality services and a customer-centric approach. Its comprehensive offerings, high market share, and deep penetration offers a competitive edge against new entrants and substitutes. It has successfully formed a community through network effect.

With a history of successful acquisitions, such as Gold’s Gym and Fitness First, Cult has established itself as a leader in the industry, making it challenging for new entrants to compete and reinforcing its position in the market.

Cultural Shift Toward Overall Well-Being

There is a notable cultural shift in India, especially in urban areas, toward prioritizing overall well-being, especially among Millennials and Gen Z. This demographic is increasingly aware of the importance of physical health, mental wellness, and nutrition. The COVID-19 pandemic has further accelerated this trend, with many individuals seeking holistic approaches to fitness that encompass not just exercise but also mental health and lifestyle choices. Cult.fit is strategically positioned to meet this demand.

Special Focus on Nutrition as a Category

Nutrition is no longer just an afterthought; it’s now a vital part of the fitness equation. As people become more informed about how diet impacts their health and fitness goals, the demand for nutritional guidance is skyrocketing. The importance of Nutrition is seen both in general and corporate specific data points shared in the analysis. Business-wise, It seems to be both a popular and a revenue generating avenue for Cult.

Need for Personalization

The demand for personalized fitness experiences is increasing, as consumers seek tailored solutions that cater to their specific needs and goals. Cult.fit understands this trend and currently provides customized wellness programs that empower members to set personal objectives. This focus on personalization enhances member satisfaction and engagement, fostering a deeper commitment to their health journeys.

Increased Need for Corporate Well-Being Programs

Employees are more aware today of the necessity of a holisticwell being program. Gone are the days of health insurance in the name of corporate well-being programs. The rising need for corporate well-being programs highlights the connection between employee health and productivity. Studies indicate that 91% of employees believe comprehensive wellness programs increase loyalty to their organizations. Cult.’s corporate offerings are well positioned to meet this demand, providing holistic solutions that promote both physical fitness and mental well-being, ultimately fostering healthier workplace environments.

Rising Digital Health & Wellness

In today’s fast-paced world, convenience is a top priority for fitness consumers. Many are willing to pay for services that enhance their experience, with 66% of gym members expressing a preference for convenient options. Cult.fit addresses this need by offering a seamless blend of in-person and digital services, making it easier for members to integrate wellness into their busy lives. This commitment to convenience enhances overall member satisfaction and encourages ongoing participation.

Consumer Persona: Meet Rohan

<aside> 👉

Name: Rohan

Age: 27

Occupation: Assistant Marketing Manager

Personality: Social, mindful, outgoing, adaptable, friendly

Location: Gurugram, Haryana, India

****“Healthy living is a holistic approach."

</aside>

<aside> ☎️

</aside>

<aside> 📖

</aside>

<aside> ❓

</aside>

<aside> ✅

</aside>

<aside> 🚫

</aside>

B2B Ideal Customer Profiles (ICPs)

1. Franchise Prospects
2. Corporates - Selected ICP based on strategic analysis
3. Private Colleges and Universities - - Selected ICP based on strategic analysis
4. Health and Wellness Centers

Core pitch for selected ICPs

For Corporates:

Imagine a workplace where employees are energized, motivated, and thriving! Investing in wellness isn’t just smart—it’s transformative. Our innovative programs blend fitness, nutrition, and mental wellness into a seamless experience, empowering your team to reach new heights. With Cult.fit, you can answer the pressing needs of your employees and thus cultivate a vibrant workplace culture that not only enhances productivity but also boosts morale and retention. Let’s turn your organization into a powerhouse of health and engagement!

For Educational Institutions:

In today’s fast-paced world, ensuring student well-being is more crucial than ever. Cult.fit is here to revolutionize campus life! Our engaging wellness initiatives promote physical fitness and mental resilience, helping students excel both in and out of the classroom. By partnering with us, you’ll create a supportive environment that fosters satisfaction and retention, making your institution the go-to choice for health-conscious students.

Sales Strategy Overview

Our sales strategy focuses on offering holistic wellness programs tailored to corporates and educational institutions while leveraging Cult.fit’s strong brand reputation. Depending upon the package, participants will receive full-body check-up, nutritional guidance, and a complimentary starter kit, including gym apparel, gloves, and an eco-friendly water bottle, co-branded with the respective corporate or institution.

(Assumption: discount was prohibited but not complimentary services)

This initiative not only enhances brand loyalty but also establishes a positive association with wellness for the corporate/institutions. Our programs will be personalized to meet the specific needs of employees and students, incorporating nutrition and mental well-being support, along with complimentary basic lab tests to better understand individual health requirements.

Targeting private business and engineering schools, as well as corporates with at least 200 people in the top 10 cities with the highest per capita income, we will create three competitive packages in line with Cult.fit's B2C offerings. This approach addresses the growing demand for personalized wellness solutions while maintaining our commitment to quality and brand integrity.