There is no better time to do a marketing research and look on the opportunities in Australian sport than now in the midst of the Rio Olympic Games. With big pleasure we can watch our medal tally rising every day, but are we a nation of great Olympians indeed,or coach potatoes only enjoying watching the sport on TV? Being gym junkie myself, I always wondered where I stand relative to the rest of Australians and more I think and dig about this topic, more I discover how many business opportunities are out there.
Great deal of research and statistics was done and published by ABS (Australian Bureau of Statistics), and the good news are that we have relatively high participation rate in sport activity of around 65% where persons aged 15 years and over participated at least once annually in sport and physical recreation
And what are our most preferable sporting activities? Interestingly I found myself belonging to the second largest group – Fitness/Gym with 17.1% sport activities participants.
Another interesting study organised by ASC (Australian Sport Commission) , identifies ten consumer segments among the Australian adult population:
- Current club member segments — Loyalists, Socially Engaged, Sport Driven and Apathetic Clubbers
- Non-club member segments — Sidelined Sportsters, Club Wary, Ponderers, Self Focused, Sport Indifferent and Sport Atheists.
According to ASC, “The purpose of the Study was to explore, identify and articulate the different motivations, attitudes, needs and barriers that influence people’s decisions and behaviours in relation to sport in general and participation in club-based sport in particular. The study is designed to help clubs understand the market and more effectively target their approaches to particular segments”.
Existing and new businesses need this key marketing segmentation information in order to have better understanding in targeting and positioning their products to their customers.
I personally see plenty of business opportunities in Fitness/Gym segment of the sport active population. This opinion was recently strongly supported by The Suncorp Bank Cost of Being Fit report, released in 2015, showed that Australians spend at least $8.5 billion a year on gym memberships, sports equipment and the latest fitness fads — this equates to about $2340 per household, and almost one million Aussies are spending at least $25 a week in gym membership fees. Wow! Looks like Aussies are obsessed with their health and fitness. And who is benefiting from all this money spend on gym memberships, sporting apparel, personal trainers and other sport related products and services?
IBISWorld report last year, revealed fitness-related businesses had a collective revenue total of $1.31 billion, with over 2800 businesses nationwide and $16 billion with 8389 businesses for the greater sport industry.
Fitness industry is highly competitive, with competition based on price, location and quality of facilities and services. Gyms also target particular niche markets in order to gain a competitive advantage. The industry also faces external competition from organised sport and independent fitness instructors.
Types of gyms include full-service gyms, such as Fitness First and Goodlife Health Clubs; 24-hour gyms, such as Anytime Fitness and Jetts; and women-only gyms, such as Fernwood and Curves.
- Full-service gyms provide quality and range of facilities and services;
- 24-hour gyms excel in accessibility and low prices;
- Women-only gyms provide the overall gym environment, as females often feel uncomfortable working out in unisex environments.
Each gym segment, compete against each other on the basis of price and location, as consumers tend to favour gyms that are within a convenient commute from home or work
Major players in Fitness industry are shown in the exhibit below
Another interesting fact is that majority of all fitness clubs are in NSW, Victoria and Queensland with NSW leading the nation with 33.2% of sport enterprises.
Fitness Industry growth has been largely stimulated by the advent of budget 24-hour gym chains, which have grown exponentially over the past few years as consumers have been attracted to their affordability and accessibility.
Rising health awareness and obesity levels have triggered further uptake in gym memberships. These factors have contributed to the industry boom.
Health awareness has grown over the recent years, with TV shows like The Biggest Loser promoting the benefits and effectiveness of physical activity through demonstrating the achievement of weight loss goals. With Australia’s obesity levels continuing to rise, this and other TV shows have provided added incentive for overweight or obese people to attend gyms.
Further growth has occurred through the expansion of more affordable gyms, which offset the discretionary spending decline during the economic downturn. Budget 24-hour gyms such as Anytime Fitness and Jetts Fitness have driven industry growth over the past years. These gyms generally operate unstaffed, with the wage savings flowing down to consumers in the form of cheaper membership prices.
Yet the IBISWorld report pointed to an estimated slowdown in the trend, forecasting only an estimated 3.3% growth rate over the next five years, due to market saturation.
According to IBISWorld report, “Market saturation is expected to contribute to an industry slowdown over the next five years, with revenue forecast to be worth $1.27 billion in 2018-19 following a 0.7% annualised decline. Consumers have abundant choices, including full-service gyms, women-only gyms and budget 24-hour gyms. Membership uptake is expected to fall as most consumer markets have already been tapped due to niche gyms catering to all pockets of the population”.
So, in summary, sport in Australia is great from business point of view, but some areas are becoming less financially attractive due to high competition and business saturation and will require “out of box” thinking for marketing and business opportunities.
4156.0.55.001-Perspectives on Sport, Australian Bureau of Statistics, June 2013, http://www.abs.gov.au/ausstats/abs@.nsf/Products/4156.0.55.001~June+2013~Main+Features~Square+eyes+and+couch+potatoes:+Children’s+participation+in+physical+activity+and+screen-based+activities?OpenDocument
Participation in Sport and Physical Recreation, Australia, Australian Sport Commission, 2012
Australian Sports Commission, Market Segmentation for sport participation, march 2013
Australian Sports Commission, http://www.ausport.gov.au/information/nsr/market_segmentation/exploring_the_segments/segment_listings/segments_search?search_page_522881_submit_button=Submit¤t_result_page=1&results_per_page=16&submitted_search_category=&mode=
IBISWorld report, http://www.ibisworld.com.au/industry/default.aspx?indid=1975
Australians Spend Big On Fitness, Suncorp Bank report,