Shaping the fitness industry

Our initiative to reach out to (preferably) young entrepreneurs carving out and building on interesting niches in a struggling market takes us to Avari Hotel’s Japanese persuasion Fujiyama. As I sit down I notice the vague parallel with our publication’s own mission – creating a product that suggests and nurtures an off beat service – and feel it will provide the ideal avenue for our Lunch with Profit endeavour.
Sitting opposite us (business editor and director strategy & planning) are Omer Farooq and Zain Nadeem, Managing Directors, Shapes, for Karachi and Lahore respectively, newest faces behind the country’s leading service provider in health and fitness, another one of our more ignored sectors.

Market entry
The order was placed as they explained that health and fitness had never figured as prominently among the Pakistani youth as even regional counterparts, reasons apparently still a mystery to industry insiders as well. That is probably why the waiter’s attempts at promoting the local sushi specialty failed in favour of chicken and beef across the table. I waited to order till the end, anticipating a lunch-novelty fitness experts might prefer, but found my tastes just as wise.
“In the ‘80s and early ‘90s, we did see the gym culture creeping into the student and young professional groups, though very limited, but it tended to concentrate more on muscle building as opposed to health and fitness,” says Omer, explaining the lay of the land before Shapes.
“One reason why it didn’t solidify was that training was provided minus proper guidance. Often, directionless forays into muscle and fitness, which are very technical fields, are counter productive and therefore short-lived, causing many to abandon such persuits.
So it was when their grandfather, Khwaja Abdul Hakeem, and fathers, Omer Farooq and Nadeem Ahmad, launched the Shapes initiative in ’95, starting with a one-room exercise area in Lahore.

Niche identification
Being an ignored area with increasing following across the world, especially in our immediate neighbourhood in India, fitness had the potential to provide text-book market penetration into a niche ready to grow. But considering meek public response and inadequate service delivery, Shapes’ pioneers tested their business acumen by identifying crucial loopholes preventing the type of takeoff all too visible elsewhere.
“In the first place, we decided to shift focus from unattended body-building to proper health and fitness,” says Zain, quite animatedly, trying to stress the centrality of this breakthrough with regard to Shapes’ prompt takeoff.

Initial investments
In addition to expansion as the health and fitness mantra started gaining currency, their initial investments concentrated on providing value-added qualitative guidance from qualified professionals to coach clients towards proper fitness.
“Our mission is to empower people with renewed energy and an active lifestyle”, adds Omer.
“Now, we have in-house fitness institutes that provide a thorough analysis of clients’ fitness positions before recommending personally suited fitness regimes.” Every trainer must take regular written and practical tests to ensure that the basic niche, catering to clients’ individual performance needs, is not compromised. The fitness regimen is built and broadened by their US trained cousin Adnan Farooq, apparently the best qualified health and fitness professional in the country.

Economics of the
business model
The chicken and rice took its time to be served, a strange positive for the Lunch with Profit segment, allowing both MDs freedom of animation without disturbing too much tableware. There is a reason for Shapes to have grown head and shoulders above the competition, they explain. Similar outlets have mushroomed, and even attracted much of Shapes’ subscriber base, yet practically none have managed to build the large-scale appeal that Shapes has.
The rationale is simple. This is not the kind of business where you would like to build an exclusive clientele. A select, high-paying group, by nature, will stunt growth and provide little return on investment. That is why Shapes has focused on introducing numerous packages, making it affordable, at different levels, and suitable for most segments of society.

Playing with franchise
Sustained growth invariably leads to expansion and subsequently diversification. As Shapes grew from one room to ten proper outlets across the country, employing approximately 500 people, the owners experimented with franchising the model.
“So far, the franchise initiative is the only one that has failed to live up to our expectations,” notices Omer, finishing the last pieces of the chicken, maybe expecting a more satisfying argument to accompany his last bite. “We have some way to go as a country in terms of fulfilling contractual obligations and protecting industry growth.” Apparently, franchising has been successful only when partnered within the family. Outside elements have failed to rub the business the right way.

Vertical integration
Having established their leader-status in the fitness industry, the Shapes family broadened horizons by stepping into equipment distribution, a natural vertical integration if there was any. Now they distribute equipment from 10 American and EU brands across the country. Besides, the pioneers being sportsmen themselves, they remain active in promoting sporting talent in Pakistan, sponsoring squash and cricket tournaments where the country has traditionally held sporting comparative advantage.
Our conversation carries on after having left the pleasant surroundings of Fujiyama, and continues till we leave the managing directors waiting for their ride at the valet counter. There seems an agreed realisation that Shapes has indeed carved out its own space in a market that found little response from the public despite the odd stimulus before these boys fine tuned industry trends. But they seem content on expansion based upon what they call the WOM (word of mouth model), deciding against offering innovative, organisation-specific packages like in regional countries they mentioned, at least with regard to the print media sector. — Shahab Jafry