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Gyms and Fitness Studios Battle for Share of Mainland Exercise Market

With the mainland exercise and fitness market estimated to be worth RMB123 billion by 2020, multi-purpose gyms and the more specifically focused fitness studios are competing to woo the health-minded into signing up for their services.

Photo: A personal-coach-led training session at a Guangzhou fitness centre.
A personal-coach-led training session at a Guangzhou fitness centre.
Photo: A personal-coach-led training session at a Guangzhou fitness centre.
A personal-coach-led training session at a Guangzhou fitness centre.

Some 10,000 large-scale gyms were in operation across the mainland as of the end of 2016, together with more than 10,000 small-scale fitness studios. According to figures from the Qianzhan Industry Research Institute, a Beijing-based market-research company, the combined revenue from these 20,000-plus sites was in excess of RMB20 billion (US$3 billion) for the year.

On top of this, the fitness sector was buoyed by a further RMB30 billion accruing from the fees paid by 15 million fitness-club members. In light of this, it is expected that the value of the mainland's fitness market will maintain a compound annual growth rate of 12% over the next five years, with it estimated to be worth RMB123 billion by 2020. Given these impressive growth forecasts, it should come as no surprise that a number of commercial concerns are now keen to exploit the potential of the sector.

Even a cursory visit to Guangzhou is enough to confirm the truth of these statistics, with an ever-expanding number of gyms and fitness studios now in operation throughout the city. These range from the larger gyms, which offer a comprehensive range of training and fitness equipment, to smaller, more goal-oriented fitness studios and several niche facilities. As well as targeting a core group of young users, many of these fitness centres have also introduced bespoke programmes for children and the elderly.

In the case of the larger gyms, their workout facilities are often extensive and typically include exercise equipment zones, a dancing space, a swimming pool and a tennis court. By comparison, the fitness studios offer only basic equipment, with their main selling point being their coach-led training programmes.

Fitness Studios

Within Guangzhou, fitness centres can be found throughout its commercial districts and residential areas. A 10-minute stroll down the city's Beijing Road, for instance, involves passing at least five gyms. With many of these facilities operating in a slightly different niche, considerable consumer choice is on offer.

Photo: A Tongtai yoga class.
A Tongtai yoga class.
Photo: A Tongtai yoga class.
A Tongtai yoga class.
Photo: Group fitness training.
Group fitness training.
Photo: Group fitness training.
Group fitness training.

The city's gyms operate across a variety of formats, including chain-operated clubs, ultra-modern facilities and smaller studios. One of the most well-known of the chain-operated establishments is Total Fitness, which operates from 20 sites across the city, as well as having facilities in Shenzhen, Dongguan, Foshan, Chongqing and Tianjin. Capitalising on their strong brand awareness, many of these larger facilities have few problems when it comes to establishing a substantial membership base. In addition to regular exercise courses and access to equipment, many such gyms also stage a range of promotional fitness activities as a means of attracting new members.

According to Gao Jun, the Manager of the Guangzhou-based Tongtai fitness club, attracting new members is seldom a problem, with many mainlanders increasingly aware of the importance of keeping fit. Despite this more than adequate supply of willing sign-ups, he does caution that the growing number of gyms has made the sector intensely competitive, a development that has led to increased segmentation and keen pricing.

In line with this, he says the cost of gym membership has tumbled over recent years, falling from a high point of RMB1,000 to somewhere in the RMB200-300 range. On the upside, Gao sees the wide-ranging requirements of mainland fitness enthusiasts – which include such staples as stretching, body shaping, weight loss, yoga and dance, as well as more specialist activities, notably rehabilitation exercise and chirothopedics – as offering considerable scope for continued expansion.

As the sector grows, however, there have been calls from some consumers for many gyms and fitness centres to revise their business models. At present, the majority of such facilities operate on a twin revenue stream model, with patrons obliged to pay both an individual fee for a year's membership and a separate sign-up fee for coaching sessions. With personal training sessions costing up to RMB500 an hour, some disgruntled members have posted complaints online, frequently criticising gym owners for these excessively high charges, the poor quality of trainers and the hard-sell frequently employed to make them sign-up for courses of individual coaching.

Other complaints have stemmed from consumers who have signed up for a gym with a view to pursuing just one activity, such as yoga. Despite having only one specific requirement, they are often unhappy that they have to pay the same fee as those who want to use all of the gym's facilities, while also incurring an additional charge should they require the services of a personal yoga trainer.

Photo: Bei’er Laika’s fitness studio.
Bei'er Laika's fitness studio.
Photo: Bei’er Laika’s fitness studio.
Bei'er Laika's fitness studio.
Photo: Personal training: Necessity or unnecessary up-sell?
Personal training: Necessity or unnecessary up-sell?
Photo: Personal training: Necessity or unnecessary up-sell?
Personal training: Necessity or unnecessary up-sell?

It is just such dissatisfaction with multi-purposes gyms that the fitness studios are looking to capitalise on, with many of them focusing on a particular niche, such as yoga or rehabilitation exercises. This allows consumers to sign-up with whichever studio best matches their requirements. Typically, no membership fee is required, with payments made on a per session basis, with the option of paying a coach directly for individual training sessions.

One such coach is Chen Qiuliang, previously employed at one of Guangzhou's larger gyms, he now works for Bei'er Laika, a newly opened fitness centre. According to Chen, the business model adopted by many traditional gyms is too restrictive and also places trainers under undue pressure to sign up members for additional sessions. This sees many trainers obliged to focus more on getting additional classes than on developing appropriate programmes for existing clients. This, he says, has seen many such trainers migrate to the fitness-studio sector, believing this to be a better fit with their abilities.

Fang Weibin, Special Correspondent, Guangzhou

For more information of the mainland fitness market, see "Niche Operators Come to the Fore in Saturated Mainland Fitness Market", 3 October 2017.

Content provided by Picture: HKTDC Research
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