Contents

1.0 State of Fitness APP Industry ...................................................................................................................2

2.0 Interest in fitness apps is growing .........................................................................................................4
3.0 Combat Sports are the Rising Niche of Fitness industry .............................................................5
4.0 Customer Segmentation..............................................................................................................................7
1.0 State of Fitness APP Industry
Fitness industry has benefited from recent trends & marketing campaigns aimed at
fighting obesity, as well as consumer trends toward improved health. The desire of
consumers to lead healthier, more active lifestyles is fuelling fitness industry growth,
with fitness niches such as fitness apps & online fitness exhibiting robust growth.

The growth of online fitness industry is also driven by the popularity of smart phones
and technological advancements. The digital technology especially fitness apps allows
for easy, time-effective coverage of fitness resources at low cost, offering significant
opportunities to improve access to fitness services and contain costs. According to a
report from CBS News fitness app downloads have increased 87% faster than all other
apps and video streaming increased by 60% in year 2015.

Global - Mobile Health Apps Industry 2016

3.2 Billion Downloads for Mobile - Health Apps

(2016)

Health & Fitness Medical category

App - 56% of total –44% of the total

Fitness App

Fitness App or Personal Trainer app captures all the basic data like distance,
average speed, speed between mile markers, elevation, pace, pace between mile
markers, exercise, duration, calories burned, and route as plotted on a map using
GPS, which you can optionally disable to conserve battery power.

Consumers are increasingly turning to technology to track their fitness and

increase motivation. And research shows that millennials, especially women, are
driving the demand for fitness apps.

According to statista research, Revenue for fitness apps in the US in 2015 was $357
million, with the average revenue per user being $19.51. This is projected to increase to
$754 million in 2021, with the average revenue per use increasing to $21.47
 US – Fitness App Industry Revenue (in Million US$), 2015 & 2021

754

357

2015 2021

Source: Statista Research

Broadly fitness apps revenue is generated through different revenue sources

A) Service revenue: Revenue which derives from additional Fitness or health related
services. These services typically involve backend structures of servers, teams of trainer
or medical staff that monitor and consult with individuals interested in personalized
training services. Services also include simple digital content that can be unlocked by
the app user, such as training plans. Training plans are typically subscription-based, but
can also be structured as pay-per-use.

B) Device revenue: Revenue generated through hardware sales linked to an

application. These may include sensors for a specific wearable device designed to be
used compatibly with the application. E.g. Fitbit wearable devices

C) Paid downloads revenue: Revenue from the initial app download.

D) Advertising revenue: Revenue which derives from selling ad space within the app
to advertisers

Global – Mobile health App download (in Billion), 2013- 2015

Fitness App market size – 1.68 Billion

Down loads
3

2.3
1.7

2013 2014 2015

Source: research2guidance 2015

2.0 Interest in fitness apps is growing
Fitness Apps are transforming the way millions of people around the world achieve
their health and fitness goals. Fitness apps offer personalized insights, and virtual
coaching through customized fitness plans and interactive workouts which appeals to a
large, mainstream health and fitness market by addressing these key needs with
advanced technology embedded in simple-to-use products and services.

The increasing number of smart phone users in the global market has led to a
tremendous increase in use of fitness apps. According to Furry Analytics, in year 2016,
overall app usage grew by 11% and time spent in apps grew by 69%. Fitness app uses
grow by more than 18% which is above overall app uses growth

Source: Flurry Jan 12, 2017 - Report (To generate its analysis, Flurry looks at the
apps on its analytics platform. Flurry’s footprint now includes the ability to track
more than 940,000 apps across 2.1 billion devices in 3.2 billion sessions, offering
deep insight to the state of the app ecosystem today.)

Health & Fitness App Usage growth rate

3.0 Combat Sports are the Rising Niche of Fitness industry
According to IBIS research, the interest for combat sports as fitness is growing in US.
Most of the combat fitness training is offered by the martial arts studio and demand for
such type of fitness program is growing steadily. Widely popular Ultimate Fighting
Championships have increased awareness of martial arts programs; the growth in the
martial arts category is really driven by its recreational and fitness value. Martial art
industry serves a diverse customer base, According to the National Sporting Goods
Association, 73.0% of those who practice martial arts do it so solely for physical fitness.

Younger population remains the target market for martial arts studios due to nature of
services offered by them. Consumers aged 35 and younger are expected to account for
49.0% of total revenue. According to data from Nielsen, this demographic is more likely
than others to participate in numerous fitness class activities, including Kick boxing
group training, yoga, Pilates and dance, as well as free weights and weight machines.

US – Martial Art Studio – Statistics

US Martial Art Studios $4 Billion

(Combat Sports)
Annual Growth Rate (2011- 5.3%
2016
Number of Business 67503
Major Market Players Share There is no dominant market players in US Martial Art
Studio
Source: IBIS

US - Rising Number of participants in Martial Arts

3.9
3.69
3.29 3.23

2.16

2011 2012 2013 2014 2015

Source: Statista Research

 Combat Sports – Market Share in Type in US Fitness Industry

Jiu Jitusu, 6.30%

Judo, 10.20%

Takewondo, Mixed Martial

12.80% Arts, 34.90%

Others, 13.60%

Karate, 22.20%

Source: IBIS

Rising popularity or subscription of combat sports as fitness program indicates there is

potential for app to attract fighters, and non fighters alike. Millennials are the largest
target market for fitness industry especially for the combat Fitness sports such as mix
martial art. Millennials are digital natives, do pretty much everything from mobile
devices — from consuming content, shopping and communicating with their friends on
social media. Moreover, Combat Sport Training is

- Great cardio workout Fitness Industry

For Target Market
For Millennials
-Great strength workout
4.0 Customer Segmentation
As discussed in earlier chapter, the Fitness industry has experienced substantial growth
in demand and, as a result, the breakdown of the industry’s markets has also changed.
For determining the target market for fitness industry let’s look at the consumer
preferences.

Customer Segmentation – Fitness Industry

Consumers aged 35 and Consumers 35 to 54 55+

younger
According to data from
Nielsen, this demographic is
more likely than others to
participate in numerous
fitness class activities,
including group training,
yoga, Pilates and dance, as
well as free weights and
weight machines
According to data from the Although this market
Physical Activity Council, segment is considered to be
this demographic is the the most inactive, but the
most likely to participate in burgeoning elderly
sports such as swimming, population has become
running and weight lifting increasingly health
appeal to this demographic. conscious, contributing to
demand for industry
services.

34 & Younger Age Group Share of Fitness DVD Customer by Age

Less patient, more tech-savvy
exercisers, who often are
younger, now expect to find
55+, 20%
their workout videos instantly
is preferring online fitness 18-34 Age ,
35%
video & App.

35 to 50
35 to 54 Age Group Age, 33%
Online fitness niche is gaining
popularity in this due to low
cost, inflexible work schedule
& some time due accessibility
of gym at their Source: IBIS Research

Both these group are the major customer for the DVD fitness industry which has been be
disrupted by online fitness by attracting major end customers

Moreover, target market for online fitness industry or Apps is not limited to the Fitness
DVD customers. According to Nielson Consumer fitness trend report, 82% of Gym
members & casual gym members also exercise at home and while exercising at home
52% of all gym members are doing either App or online workout program.

From user perspective, Fitness App customer can be segmented in to four categories
 Serious/Every day User

Active User

Performace Users

Mass Consumer

Everyday users are looking to incorporate more activity into their daily routines as the
primary means to improve their overall fitness through everyday activities, such as
exercising walking more or taking the stairs instead of the elevator.

Active users exercise regularly to reach their fitness goals through activities such as
running, using cardio equipment, and playing sports recreationally.

Performance users train regularly to improve their performance and achieve their
personal bests. These users participate in endurance sports and fitness activities with
higher intensity and longer duration, such as interval or distance running and cycling,
and thrive on personal improvement and competition.

Mass Consumer sees fitness either as a healthy habit, an enjoying activity or a fat-loss
method.