Sport and fitness: Workout meets growth Is the sports and fitness market a good fit for investors?

Almost half a century has passed since fitness and sport first entered the mainstream: "Let's get physical", sang Olivia Newton-John in 1981, and a year later Jane Fonda released her first aerobics videos. Since then, sport and fitness have steadily built muscle, becoming far more than simply club activities, personal hobbies or a means of controlling weight.

Growing health awareness, from weightlifting teenagers to older adults who enjoy hiking, sociocultural shifts towards a vita activa, and the desire to remain competitive in the workplace and society are all increasing demand for a healthier, fitter self.

In an increasingly older, more health-conscious and affluent society, preventive healthcare, self-optimisation and virtual sport and lifestyle communities have now joined the traditional Olympic aspiration of "Faster, Higher, Stronger - Together". A wide variety of companies are responding to this shift with digitally enhanced business models and innovative strategies.

Global fitness boom: A thriving overall market and dynamic subsectors

It is therefore hardly surprising that the physical activity market as a whole is flexing its muscles. Following a one-off, pandemic-related contraction of 14% in 2020, its three core areas - (a) sport and active recreation, (b) fitness, and (c) mindful movement practices such as yoga and Pilates - have enjoyed strong growth again since 2021.

In 2024, the market reached a value of USD 1143.9 billion. With average annual growth of around 5% expected between 2025 and 2029, the market is projected to expand to USD 1463.6 billion by 2029 - not growth fuelled by anabolic steroids, but healthy, organic growth.

More than 91 % of global spending on physical activity is concentrated in just three regions: North America, Europe and Asia-Pacific.

• North America is the clear frontrunner, with per capita spending of USD 1151 per year in 2024 - significantly higher than in Europe (USD 313) and Asia-Pacific (USD 74).
• Together, the US and China account for around 50 % of global spending, making them by far the most important individual markets. Meanwhile, performance and growth in the sports and fitness sectors of other geographical regions also have room to improve.

From an economic perspective, the performance of three subsectors within the overall physical activity market is particularly interesting:

1. The health and fitness club market
2. The sporting goods market
3. The wearables market

1. Fitness market: Studios and digital offerings

Let us first look at the fitness market. Unlike product-driven sporting goods and wearable hardware, this is primarily a services and infrastructure market dominated by clubs. Services and infrastructure offerings include memberships at fitness and health clubs, fitness classes, personal training and digital training programmes optimised through data analysis and gadgets.

These segments of the fitness market are in good to excellent shape:

1. According to statistics portal Statista, the global health and fitness club market is expected to grow by an average of 7.5 % annually between 2022 and 2030, reaching a value of around USD 125 billion by 2030.
2. At the same time, the market for virtual fitness and health services is gaining noticeable momentum. Although it remains considerably smaller than the traditional fitness club market, demand is growing rapidly. More and more people prefer digital solutions that offer flexible training and wellness sessions, from intensive cardio workouts to gentle yoga, which can easily be integrated into everyday life, at the office, during lunch breaks or at weekends.
3. A key driver of this development is technological integration. Providers are increasingly using virtual reality (VR) and augmented reality (AR) to create immersive digital training environments and interactive fitness experiences in so-called metaverses, blending the virtual and physical worlds.

The metaverse workout market for wellness and fitness is moving at a rapid pace. With a compound annual growth rate (CAGR) of 34.71 %, the global metaverse market for health and fitness is projected to grow from USD 17.1 billion in 2026 to USD 56.1 billion in 2030.

Alongside the metaverse, fitness trackers and wearables are also becoming established as important companion and support devices, enabling users to continuously record and analyse their training progress, health data and individual performance metrics.

2. Sporting goods: Power and endurance

Wearable trackers and digital accessories are typical products within the sporting goods market. More broadly, this market encompasses sales of physical products such as sportswear and leisurewear, footwear, equipment and accessories for training, running, team sports, outdoor activities and cycling, through wholesale, bricks-and-mortar retail and direct-to-consumer channels.

The overall sporting goods market is substantial. In 2024, sports equipment and apparel worth around EUR 376 billion were sold worldwide - far exceeding revenues generated by cinema visits, books or music, for example. Sportswear is the largest segment by revenue, closely followed by sports equipment such as fitness machines, tennis rackets, skis and other products.

Sportswear also owes its strong market position to changing sociocultural habits. Golf trousers and tennis shirts, baseball caps and basketball trainers are no longer worn exclusively on the playing field. They have become expressions of a contemporary lifestyle, with its casual looks, polished styles and fashionable fits.

This industry trend is also known as "athleisure", a term combining the English words "athletic" and "leisure". However, this hybrid combination of sportswear and everyday fashion is not simply about achieving a chic or cool aesthetic. Sporty cuts and comfortable materials are also highly practical for everyday working life, whether in hybrid working arrangements or at an office desk.

3. Wearables market records steady growth

The wearables mentioned above also occupy a distinctive hybrid position. As hardware products, they belong to the sporting goods market. But as stylish, portable gadgets for supporting training and analysing performance, they are also part of digital health and fitness services - while doubling as fashion accessories.

Supported by various product categories, including earwear such as stylish headphones and trendy headsets, elegant smartwatches, colourful fitness bands and smart rings, forecasts for the wearables segment are ambitious: more than 600 million devices are expected to be shipped worldwide by 2029.

Fitness and sport: Workouts and growth for the portfolio

From an investor's perspective, the encouraging news is that rising revenues reflect growing demand and the increasing integration of wearable technologies into everyday life, in line with consumers needs and preferences.

Further innovation, improvements and corresponding growth are likely to follow in both the fitness and sporting goods markets. Fitness and sport therefore represent a sector that may offer interesting investment opportunities, although the associated risks must also be carefully considered.

A further caveat is warranted: fitness providers and sporting goods companies also depend on scalability, attractive locations, capacity utilisation and customer retention, software and service integration, as well as strong brands, product cycles, inventory management, distribution channels and intelligent pricing strategies.

A sound investment analysis should therefore consider not only a company's market position, but also its valuation, revenue and earnings growth, margins, debt levels, return on capital, cash flow, competitive environment and the quality of its business model. This is essential to assess whether a company operating in an attractive growth market can genuinely generate sustainable and profitable value.

Dr Tilman Dumrese

Dr Tilman Dumrese is a Senior Equity Specialist at LGT, focusing on sustainability topics and the healthcare, consumer discretionary, and chemicals sectors. He holds a doctorate in immunology and worked internationally at renowned research institutes during and after his academic training in Germany and the US.