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Analysis

The Growth of Health and Fitness

Wed, 09/09/2015 - 15:36

Generation Y has grown up in an age of digital saturation, more accustomed to social interaction through virtual means than physical activity. Today, many children no longer ride bicycles on the street, but instead play with tablets, laptops, televisions, mobile phones, and countless devices designed to make life easier. The outcome of the growth in technology is an increased sedentary lifestyle and the rise in the levels of obesity currently being observed all over the world.

According to William Strauss, author of “Millennials Rising: The Next Great Generation,” this generation bases all the activities in their life on structure, which is why it is not surprising that now even exercise tends to follow a schedule. In 2013, WHO Member States established a target for increasing physical activity by 10% by 2025 and strategies for doing so are set out in the “Global Action Plan for the Prevention and Control of Noncommunicable Diseases 2013-2020.” As a result, gym chains have seen a surge in membership over the last few years.

In Mexico, there are around 8,000 centers for the practice of physical activity. One of the major gym chains, Sportsworld, has seen increased revenue of 19% between 2013 and 2014 and the number of Sportsworld customers also increased by 13.5%. The club is currently expanding at a rapid rate, with 46 clubs across Mexico, six more than its closest competitor. Gyms opening across Mexico cover a variety of demands. For those who simply want access to exercise equipment, chains like Smartfit offer a no-frills model for low monthly fees starting and no inscription commitments. At the other end of the scale gym chains that incorporate extra features such as classes, swimming, and family memberships, charge more for their memberships. The prevalence of boutique gyms is also increasing in Mexico, with Madonna’s Hard Candy gym entering the market.

According to a report published by the WHO in January 2015, one in four adults and more than 80% of the world’s adolescent population are not sufficiently physically active. In Mexico, the OECD index shows that the average household net adjusted income is US$13,085, meaning that most of the country’s population is priced out of many of these gym memberships. In fact, the poorest 20% of Mexicans survive on an estimated US$2,534 per year. The WHO’s recommendations for tackling the lack of physical activity is the promotion of accessible sports and recreation activities in cooperation with national and local authorities.

In order for Mexico’s fitness and wellness industry to see an increased penetration across all sectors, gyms must be priced affordably for all citizens. With more than six million diabetics and an estimated two million more that remain undiagnosed in Mexico, only 3% of the population exercise regularly. The crippling health problems facing public instituions means that economically, the Mexican government stands to gain in the promotion of affordable gym and wellness centers for the whole country, not just the elite. There is a real opportunity for collaboration with wellness centers for a preventive approach to many obesity-related problems.

By 2040, Mexico is expected to spend 7.7% of its GDP on the Seguro Popular system, an estimated US$97 billion. With this money, the government could buy an annual fitness membership to one of the most expensive fitness centers in Mexico for 32.5 million people. A membership could be purchased to a basic gym like Smartfit for every single person in the country, with US$4.29 billion surplus. For affordable fitness centers, there remains an untapped market in Mexico of 118.6 million customers.