Ex. MD, Gold Gym Releaved 5 Trends in Saudi Arabia Fitness Industry in 2022: Ken Research

KSA Fitness Services Market Outlook

In conversation with Raouf Hegazy, Ex Managing Director at Gold's Gym, Saudi Arabia, we attempt to identify the key trends in the Saudi Arabia Fitness Market and how the industry was impacted by COVID 19.

"I believe that marketing campaigns which connect to the public on the ground and involve them in activities works better than broad and general marketing. The human interaction creates a personal connection with the public and social media provides the mass visibility. "-Raouf Hegazy

How has your journey with Gold's Gym been?

I worked with Gold's Gym KSA for more than 6 Years. I left the organization last year. My team and I started our journey with a very strong challenge to double the number of branches in KSA. We started the project from scratch, which means we purchased the land, designed the gyms, pre-sales, and the opening the branch. Our efforts were appreciated by Gold's Gym international. We won 4 awards and in 2018 were awarded the prize of the best new gym in the world, the best marketing campaign, and Visionary of fitness in Saudi Arabia.

What was the impact of Covid 19 on the fitness industry in KSA?

The industry was tremendously impacted by Covid. The fitness industry involves the presence of the clients in the gym with the trainers and it involves them touching and using various equipment. But, these were the activities that were spreading the virus.

When the lockdown was imposed on the country a few smart and proactive leaders shifted to an online mode of training. This helped reduce the bleeding of the revenue. Few of the larger brands with multiple centres were amongst the first to start online training. Gold's gym followed by developing videos that were provided to the clients. About 60% of the gyms remained closed during the lockdown. The rest shifted to an online mode. The gym which did not shift online froze the memberships of the clients. This means that during the lockdown they did not lose any cash flow but at the same time they did not generate any cash flow as well. Many clubs asked the trainers to take unpaid leaves.

The government had supported the industry by exempting some bills and charges. On an industry level, we saw a decline in revenue of about 20-25%. The market size was around 702 million in 2020 and an 8% growth is expected in 2021. In the last 4 years, the government has been constantly creating awareness about physical fitness. In 2018, around 25% of the country was involved in physical fitness activity for 1-2 hours a week.

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What is the new technological advancement in terms of fitness equipment in the country?

The leading players in the county such as Technogym, Life fitness, and Matrix try to bring new equipment in the market every year. For example state of art, technology is being used in the cycling rooms of the gyms. Pulse and pace monitors are being used to conduct the live competition in the gyms and the clients can save their progress and continue with the progress even when they move to other centers using the login credentials. The system has all the information about the workout such as calories burned, average pace, top speed, heart rate, etc.

The equipment market of the country is import-driven. About 85-90% of the equipment is imported from countries such as the USA, Italy, Taiwan, etc.

What were the marketing techniques while you were working with Gold's Gym?

While with Gold's gym I used two major techniques. The first was social media presence and the other was activated on the ground to develop a connection with the public. Social media was to develop a presence and the ground activities were to develop a relationship. I did not go for magazine ads or published ads in the newspaper. Awareness campaigns were created which created a personal touch with the public and the customers.

Brand recognition is extremely important in the fitness industry, even more now as the customers have to trust the sanitization and cleanliness within the gyms. I believe that marketing campaigns that connect to the public on the ground and involve them in activities work better than broad and general marketing. Human interaction creates a personal connection with the public and social media provides mass visibility.

During Covid, the gym provided discounts of up to 50% of recharge the sales.

Does any real-estate premiumization occur due to the opening of a gym? Which are the ideal locations for the opening of gyms in the country?

No, there are a few reasons for that. Firstly, gyms are usually opened in areas that have already gone through the process of premiumization. Rarely do we open gyms in anticipation of the development of the area. This is because we have a checklist while deciding on a location of a gym. One of the criteria is traffic and easy accessibility. This means that the prices have already increased to a stable level.

The country is divided into regions such as north, west, south, etc. I would suggest opening gyms in the capitals of each region. This is because the major population lies in these cities.

For any queries or feedback, reach out to the author at Namit@kenresearch.com

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