According to incomplete statistics, there are currently approximately 40,000 to 60,000 commercial fitness venues in China, among which specialty and small to medium-sized fitness studios account for about 30%, and this segment is growing rapidly. As consumers’ demands for fitness experiences and targeted training continue to rise, the studio model will undoubtedly continue to challenge traditional gyms in 2017. In the future development of the industry, gyms and studios will continue to coexist and progress together.
The history of commercial fitness venues in mainland China spans only about 20 years, and the segmentation and diversification of China’s fitness demographic is far from sufficient. Members of the same gym cannot be considered a homogenous group, and their preferences for types of exercise may be completely different. On the contrary, fitness studios have a much more precise focus. Groups with similar social status, spending power, and shared values are also easier to maintain, and the service experience offered by studios offers a certain degree of social interaction, enhancing consumer belonging. This is one of the reasons why the average attendance rate of studio members is much higher than that of gyms. Fitness enthusiasts enjoy not just the pleasure of exercise, but the magic of the fitness atmosphere.
Zuo Jing, a coach at OneFit Sports Training Center, believes that traditional gyms are “broad and large,” encompassing various forms of workouts such as yoga, gymnastics, and equipment training, whereas fitness studios are more “small and refined.” For example, OneFit is more specialized in functional training and physical conditioning. “In fact, this is a further segmentation of the market,” Zuo Jing said.
On July 6, ISPO, in conjunction with “Fitness & Beauty,” will co-host the ISPO Academy: Fitness Studio Win-Win Summit and the 2nd ISPO China Fitness Industry Forum, which will once again be held alongside ISPO Shanghai 2017. This forum will focus on the future development of fitness studios, deeply analyze consumer big data reports for fitness enthusiasts, explore brand positioning for fitness studios, and discuss the path to mature business models. The forum gathers voices from industry pioneers and establishes a platform for communication and sharing among fitness industry practitioners, brands, investors, and capital from an observer’s perspective.
The fitness industry may seem to have very low barriers to entry — anyone can do it — but doing it well is not simple.
We warmly invite FPM — Founder of China Fitness Professional ManagersTeacher Zhang HongshengWho recently visited “ISPO Talk” and provided a simple comparison of the basic characteristics of traditional gyms and new-style fitness studios from the perspectives of investment and entrepreneurship.
Traditional Gyms (thousands of square meters)
High asset intensity: high rent, large one-time initial investment, full range of equipment, vague positioning, scalable, replicable;
Prepaid: membership system, annual fees paid in advance;
High labor costs: pre-sale sales staff, operation and maintenance personnel, course instructors, many personal trainers.
— Relatively high performance and output, but also high and continuously sustained costs, gradually declining customer base, low customer activity, short operational cycle. (Some projects aimed at “speculation”)
Specialty/Small to Medium/Private Training Gyms (around 100 square meters)
Relatively light assets: reasonable rent, relatively lower initial investment, targeted training equipment, focus on specific niche areas, often founded by trainers, less replicable;
Products: Courses: lower cash flow, stable and gradual growth;
Services: more private, enhanced social attributes, emphasis on service, strong experiential feel.
— Steady and sustainable development, but limited cash flow and lack of replicability make rapid scale expansion difficult.
It is not hard to see that compared to traditional gyms, small to medium-sized fitness studios have significant advantages, with their biggest shortcoming possibly being slower cash recovery. But Teacher Zhang mentioned to ISPO that fitness studios don’t necessarily need to stick to rigid positioning — they can also do pre-sales and sell other products besides courses (including but not limited to membership time) to achieve explosive growth in cash flow. For example, Beijing’s Star Fitness and Shanghai’s CrossFit studios have already bundled courses, time, and memberships for sale. If only courses are sold individually, then compared to traditional gyms,studios may lose over 60% of potential cash income.
Teacher Zhang Hongsheng offers three suggestions for fitness studios:The best design, (cost-effective) best equipment, and the best products.
“Why would customers give up a spacious, bright, thousands-of-square-meter training space to come to your shop?” Zhang Hongsheng said: “Smaller fitness studios need even better design and decoration, making full use of the space to create quality, taste, and refinement. We must achieve ‘small but excellent in every way.’”
Zhang Hongsheng: “For example, leading domestic fitness brand Weider Wu Si, each of its chain clubs invests at least10–20 millionRMB. There are also quite a few small studios or gyms cobbled together with investments of just hundreds of thousands or a few hundred thousand, but where is their irreplaceable value? What is their long-term sustainable advantage? I believe the reasonable startup cost budget for a gym or studio should be3,000–5,000 RMB per square meter. The environment includes the following elements: cost-effective fitness equipment, a modern appearance, inspiring visuals, spacious and clean spaces, atmospheric lighting, dynamic music, and professional staff.
. The core value of commercial fitness venues: coaches + courses + service
. Currently, in China’s commercial fitness clubs, the average proportion of private trainers’ workload and the client base purchasing private training services is around 10% to 20%. In some first-tier city brands, this may reach 40%-60%. This means that at least 60%-80% of consumers do not opt for personal training services. Teacher Zhang mentioned to ISPO: “In traditional gyms, the most criticized issues have undoubtedly been aggressive personal trainer sales pitches and information overload. If you don’t buy private training sessions, no one pays attention to you. Even if you do, it’s not much better — either your trainer changes every three days or you’re constantly pressured to renew. This has basically become a standard routine in gyms.”
. Unlike in Europe and America, over 95% of Chinese people either do not understand their own bodies, are not accustomed to working out in enclosed spaces, or cannot afford long-term personal training courses due to economic constraints. So how can gyms/studios provide them with effective, professional guidance and services to meet their needs?
. 1. Reform the private trainer evaluation mechanism
. Regarding the evaluation of coaches, most gyms in the current market primarily use performance-based assessments, settled monthly. This actually poses many risks. Since the cost of leaving is very low, trainer turnover increases significantly, and even colleagues and clients may leave along with a departing trainer. How can staff stability be improved? — Shift from short-term to long-term evaluations, sustainably plan coaches’ career development, and increase their loyalty.
. 2. Enrich course design and maximize coaching resources
. Currently, the majority of private trainers in domestic gyms have severely insufficient effective working hours, averaging only 3-4 hours per day, which forms an almost laughable contrast with their high one-on-one session fees. Why not lower the unit price? Adopt a “wholesale” approach with small profits but quick returns. Group classes, whether paid or free, can also help break the vicious cycle of continuously high labor costs caused by underutilized human resources. Studios generally handle this better — for example, onefit and RunningCat primarily focus on fee-based group training sessions.
. 3. Strengthen distinctive services
. Explore blue ocean markets in the industry by winning through differentiation and uniqueness. For example, children’s physical training, postpartum rehabilitation, rehabilitation training, etc. Teacher Zhang suggested to ISPO: “I think everyone should think about this. How can the future direction be different from what others are doing? Where is the blue ocean in this industry? Our competitors are definitely not our peers — it must not be our peers, but the times themselves. In this rapidly developing era, how do we seek change, how do we be different, how do we acquire more skills, advance in our careers, and stay ahead?”
. Fitness and exercise have become a highly valued part of urban life. A new fitness lifestyle is thriving. To meet the emerging demands of the industry, the ISPO Shanghai Expo, driven by its “craftsmanship” spirit, will grandly open on July 6–8, 2017, at the Shanghai New International Expo Centre. While further strengthening outdoor sports, the expo will delve deeper into running and fitness, urban light outdoor activities, and sports fashion trends. It will support innovative brands, foster technological innovation, and promote communication and collaboration across the industry.