Forbes India 15th Anniversary Special

We always envisioned that health would go digital: exec, a health and fitness startup that had swiftly expanded the number of physical gyms it ran, had to go online overnight due to Covid-19. Forbes India speaks to Naresh Krishnaswamy, the company's growth and marketing head, about the impact of the pivot

Naini Thaker
Published: Dec 9, 2020 07:30:46 PM IST
Updated: Dec 9, 2020 09:40:13 PM IST

We always envisioned that health would go digital: execNaresh Krishnaswamy, growth and marketing head,

The pandemic has been a true test for every company's agility. While the four-year-old always had long-term plans to go digital, the team was forced to roll these out much sooner than expected, during Covid-19.

The fitness company, which runs gyms as well as nutrition, activewear and medicine verticals, took their operations online overnight. During the pandemic, claims to have conducted 3,500 to 4,000 sessions personal training online sessions daily—and also launched online free classes in the US markets.

Forbes India speaks to Naresh Krishnaswamy, the company’s growth and marketing head, about the impact of the pivot, its plans for the international market and how long it would take for the company to hit pre-Covid levels. Edited excerpts:

Q. It has almost been a month, since gyms have been open. What is the kind of response that you have seen so far?

We are seeing that members are sort of coming back to work out offline, along with interest from new members. With the social distancing regulations, centres are currently running at about 50 percent capacity, and within this, we have 55-60 percent utilisation. Pre-pandemic—when we were running at 100 percent capacity—we would operate at 70 percent utilisation.

We continue growing every week as word of mouth spreads. If pre-pandemic, a centre was acquiring about 500 new members every month, it is now acquiring 200 new members.

Q. Due to the impact of the pandemic, are there any locations that had to be shut?

We have not had to shut down any centres in metros like Mumbai and Pune, but in Tier II and Tier III cities, about 5 percent of our centres have closed. However, in these cities, we've had interest from franchisee owners, so we have 14-15 centres that they are now running. But once the situation improves, we will consider reclaiming some of those locations.

Q. How long will it take to hit pre-Covid levels?

We are anticipating to get there sometime in the middle of next year, around June to September. But again, a lot depends on Covid-19 cases and the availability of a vaccine. We may be able to come back to 70-75 percent of pre-Covid levels in terms of revenue, even with a reduced capacity. But anything beyond that will have to happen on the back of the social distancing regulations going away.

Q. What are the safety regulations at gyms?

There are temperature checks at the entrance, sanitising of shoes followed by a touchless attendance system. Earlier, members could occupy any position in the class, but now, they are assigned into numbered boxes on the floor. For each member, there’s a physical box with sanitised equipment kept near you, so you don’t need to go and pick up your equipment. These boxes are about six-seven feet away from one another. It is not advisable to wear masks during the workout. Classes are now scheduled to accommodate a 30-minute gap between each class—10 minutes for members to exit and the next 20 minutes for deep sanitisation.

Q. What was the pivot like—the sudden shift from offline to online classes?

We did envision that at some point, health would go digital. So we've been investing in digital health for a while...when the pandemic hit, we had to massively pick up the pace. We started building online classes since 2019, and we always had content for meditation and yoga on the app. We launched a spectrum of health products—personal training, nutrition consulting, therapy and telemedicine. Fortunately, all of them sort of picked up simultaneously because of the lockdown. Now we've realised that a large part of our strategy is going to be digital.

Going forward, I think we see ourselves in two businesses: One is the offline physical centres, and a gym product that we are launching soon, wherein we are aggregating a bunch of traditional gyms into one membership. Second is digital, across the spectrum from nutrition to medicine. Even though offline centres are now opening up, we have no plans to roll back the paid online classes. We are also seeing a lot of customers adopting a hybrid model, working out from home for a few days and going to the gym for the others.

Q. What sort of response have you got from the US market?

The response has been pretty great, but we are still in the pilot stages right now. In the past few months, close to 70,000 users in the US have downloaded the application. Right now, we are building our understanding of the market and its needs. For the US, we plan to stick to the digital-only model. Our focus is to build a team there and launch a paid version soon. In 2021, we will scale it up.

Q. Right before the pandemic, was betting big on How badly was that hit and what are the company's plans for the same now?

We had a large food business pre-pandemic, with about 70 kitchens and doing sizeable amounts of revenue. Right now, we've shrunk that business down to two citiesBengaluru and Coimbatore—and spun that off as a separate entity. While it remains in the same group and is backed by the same investment, will be a predominantly offline fitness and digital company and will chart its own path in the cloud kitchen segment.

Q. How is the sports gear business faring? has been around since early 2019 and it saw a great response due to the pandemic. In May, once e-commerce resumed, we started doing the highest revenue we've ever done for that segment. And now, we've also diversified into other equipment including dumbbells and kettlebells. We're very bullish on this segment. We want to tap into the gap in the space of sports gear for quality Indian players. For the entire segment, including gear, footwear, sports wear, we were clocking $1.5 million annual revenue run-rate pre-pandemic and now it is about $3 million.

Q. What is the revenue breakup like pre-pandemic, and what does it look like currently?

Pre-pandemic, about 65 percent of our business was the offline; 25 percent was the food business and 10 percent was others, which includes [includes online health consultation] and [includes workout wear and equipment].

So in all, 95 percent of our business came from offline models. Post-pandemic, (offline) shut down entirely, so that went to zero, and dropped dramatically. So through the months of April-August, we were 90 percent digital and 10 percent offline.

Currently, we are 60 percent digital and 40 percent offline, and as the centres keep opening, the ratio will keep getting better. will go back to being the dominant one in the revenue portfolio, but the balance revenue instead of offline channels like will come from everything digital. With digital, we have managed to recover 20-25 percent of the pre-pandemic revenue, and now with Cult centres opening, we are hoping to exit the year at 45 percent of the pre-pandemic revenue.

Q. What are the brand's expansion plans?

We will go big in digital in international markets. We’re also actively working on creating a lifestyle solution for people suffering from diabetes. Hopefully, we'll have a product to launch sometime next year. We're looking at launching own brand of wellness products, starting with supplements including proteins and vitamins.