By Thomas Kostigen
Last week, Beach Body Fitness went public in an offering that valued the company at just under $3 billion. it was the latest in a string of online wellness companies that have seen strong growth and attention since COVID-19 forced people indoors with few choices for group exercise.
Peleton, of course, soared during the pandemic. And others sought to capitalize on people’s desires to stay fit while under quarantine. But now that COViD’s time is seemingly up, what’s next for these fitness-fitness-craze companies? Gyms and exercise studios are reopening. Competition for home workout time is increasing. Yet, according to industry and media reports, on-demand fitness is here to stay and set for explosive growth.
One market report suggests the online fitness market will grow more than 30 percent per year through at least 2027, hitting nearly $50 billion in revenue, up from more than $5 billion in revenue two years ago.
The growth clip is forecast so robustly because fitness apps and streaming services offer convenience, efficiency and are ripe for both content and product add-ons. Take Peleton. It defines itself as a media and equipment company. The fitness segment it dominates is somewhat incidental to its operations.
Besides convenience, a big advantage fitness apps have over their in-person rivals is cost. Apps are typically far less expensive than gym memberships. For example, Beach Body Fitness offers memberships for less than $20 per month whereas Equinox Fitness memberships start at ten times that amount.
To be sure, people hungry to see faces at the gym are returning in droves. And physical gyms have the opportunity to offer two types of memberships — online and in-person. Equinox and Gold’s Gym, two of the industry’s most well-known names, both offer hybrid models. This could position them nicely for future revenue wins. Equinox is reportedly in talks to go public via a SPAC, or special purpose acquisition company, in much the same way as Beach Body Fitness did. And Gold’s Gym was acquired last year by a European investment firm. It wouldn’t be surprising to see Gold’s headed for a SPAC, as well.
In any event. online fitness growth is attributed to the “access to various workout classes available at the convenience, growing demand for healthy food, increasing demand for fitness based on AR [augmented reality] or VR [virtual reality], and increased need for specialized fitness sessions to achieve physical fitness. Other factors influencing the market demand include the availability of robust internet connectivity,” a Fior Markets report says.
A missing quotient is the fact that health and wellness is not only good for the individual, but are good for society and the economy at large. The healthier people are, the less of a burden they pose to the healthcare system.
Ironically, the biggest drain on the global healthcare system in recent memory, COVID-19, may also have spurred the biggest relief for healthcare costs. The social costs of healthier people may indeed make people wealthier. Check with a good financial advisor to see whether a fitness stock could help your portfolio get into better shape.
Thomas Kostigen is a contributing writer to MyPerfectFinancialAdvisor, the premier matchmaker between investors and advisors. Thomas is a best-selling author and longtime journalist who writes about environmental, social, and governance issues.