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The Rise of Wellness and Gym Chains

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Generation Z has grown up in an age of digital saturation, more accustomed to social interaction through virtual means than real social interaction. As a result, children no longer ride bicycles on the street, but play with tablets, laptops, televisions, mobile phones and countless devices designed to make life easier. The outcome of the growth in technology is the 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 a 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 gym chain, 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.

The gyms opening in Mexico are covering a variety of demands. For those who simply want access to exercise equipment, gyms such as Smartfit offer a no-frills exercise environment for a monthly fee starting at US$22 per month and no inscription fee. There are also gym chains similar to Sportsworld which incorporate extra features such as classes, swimming and family memberships, with inscription fees of around US$500 as well as a monthly cost of around US$230. Moreover, the prevalence of boutique gyms is increasing in Mexico, with Madonna’s Hard Candy gym costing US$160 per month on top of a US$650 inscription fee. To become a member at Sport City the inscription can cost US$1000, as well as a monthly fee of US$165.

However, according to a report published by the WHO in January 2015, one in four of adults are not physically active enough and more than 80% of the world’s adolescent population is 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 of the country 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 nine million diabetics and an estimated two million more that remain undiagnosed in Mexico, only 3% of the population exercise regularly. The crippling health problems faced by the Seguro Popular 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 in collaboration with wellness centers for a preventative 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.

This post is an excerpt of a feature that will appear in Mexico Health Review 2015, to be released in September 2015. To pre-order your copy now visit www.mexicohealthreview.com. Please direct all media enquiries to jc@mexicohealthreview.com.


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