Consumers turned to digital platforms for their fitness needs driving remarkable growth in the industry in 2020. According to the research data analyzed and published by Comprar Acciones, worldwide consumer spend on mobile health and fitness apps jumped by 49.7% year-over-year (YoY) in 2020.
Based on a report by the Washington Post, between January and November 2020, a total of 2.5 billion health and fitness apps were downloaded globally.
During the first half of the year, health and fitness app downloads shot up by 46% according to We Forum. In that period, India had the highest growth rate, with the number of downloads surging by 157%.
The digital shift to fitness also spurred a surge in demand for fitness wearables. According to an IDC estimate, wearable shipments reached almost 400 million in 2020. Compared to 2019, that would be an increase of 60 million.
IDC pointed to wearables that provide virtual fitness and health coaches as the ones pushing the sales of multiple products that work together. These included Fitbit Premium, Apple’s New Fitness and Amazon’s Halo.
But while the online segment thrives, its offline counterpart has been on a downtrend. According to the IHRSA, the US gym and health club sector lost a cumulative $13.9 billion between mid-March and August 31, 2020. The report estimated that 25% of gyms in the US would close down by the end of the year. Gold’s Gym, Town Sports International, Cyc Fitness and 24 Hour Fitness were among those that filed for bankruptcy.
European Consumers Spent $544 Million on Health and Fitness Apps in 2020
In Europe, digital fitness growth was particularly remarkable as consumer spending on the industry’s apps shot up by 70.2%. The figure soared from $319.8 million in 2019 to a whopping $544.2 million in 2020. The yearly increase nearly doubled that of 2019, which stood at 37.2% YoY.
The uptrend started in Q1 2020 when gross sales rose from the 2019 average of $80 million to reach $115 million. In Q2 2020, the figure rose higher to $142 million.
Q3 2020 was the peak quarter as gross sales shot up to $148 million. That was 83.3% higher than Q3 2019 when spending totaled $81 million. Though there was a slight decline in Q4 2020, the figure was still considerably higher than the 2019 average, at $140 million.
Most of the spending was concentrated on the Apple App Store. It generated $392.8 million, accounting for 72.2% of the final tally. Google Play, on the other hand, contributed $151.4 million, 27.8% of total revenue.
Europe accounted for 30.3% of total global spending on health and fitness apps during the year. The UK was its top market, generating $160.6 million, 29.5% of the region’s total. Germany came in second with a total of $89.3 million (16.4%) while France was third with $56.4 million (10.4%).
Peloton Stock Grew by 434% in 2020, Digital Subscribers Up by 382%
Growth was also seen in the home fitness business due to the closure of gyms after the pandemic took hold. Based on a report by NPD, in the period between March and October 2020, revenue from health and fitness equipment rose to $2.3 billion. That was more than double the revenue from the prior-year period. During the same period, stationary bike sales almost tripled while treadmill sales rose by 135%.
Peloton was among the top beneficiaries of the trend. Its products sales during the year doubled from $910 million in 2019 to $1.8 billion in 2020.
The company also increased its digital foothold, with the total number of members reaching 3.3 million by the end of the year.
The company’s digital subscribers shot up by 382% to reach 510,000, while paid digital subscriptions rose by 210% YoY, reaching over 316,800. The number of Connected Fitness (CF) subscribers grew from 563,000 to 1.334 million over the year, a 137% uptick YoY.
As a result of the stellar performance, Peloton’s stock grew by 434% in 2020. During fiscal Q1 2021, Peloton’s revenue was $757.9 million. From that amount, 79.4% came from Connected Fitness products. Revenue during the quarter grew by 232.4% YoY and by 24.8% compared to the previous quarter. The upsurge resulted from a 132.9% increase in subscription revenue and a 274% uptick in product revenue. For Q2 FY21, seasonal holiday strength is expected to drive sales up to almost $1.1 billion.
Other CF companies also gained from the industry’s growth. After its acquisition by Lululemon, Mirror is estimated to have generated $150 million in revenue in 2020. Its company’s previous revenue projection stood at $100 million. For Tonal, sales soared by 700% during the year.
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Nica is a BA Political Science graduate, startup founder and financial expert. She has an entrepreneurial spirit and started several startups from a young age, eventually becoming fascinated with stocks, cryptocurrencies and the blockchain economy. She specializes in financial tech and her expertise is in writing detailed tutorials and guides on how to invest in stocks and cryptocurrencies.