Chinese citizens are becoming health conscious day by day and are investing quite a lot of money in the fitness industry. Today the industry in China makes for USD6 billion.
A mini gym in Shenzhen. PHOTO: Eyeshenzhen
Chinese citizens are becoming health conscious day by day and are investing quite a lot of money in the fitness industry. Today the industry in China makes for USD6 billion. It has contributed in the sportswear industry which is expected to reach USD43 billion by the by 2020 according to Euromonitor.
In the past years, foreign franchises have entered China to expand their business after witnessing the potential of the industry. The US-based, anytime fitness being one of them, came to China two years ago in 2017 and announced to open 500 fitness centers over the next several years. Currently 5% of the population in tier 1 and tier 2 cities workout actively in the gyms.
In August 2017, Keep, China’s top fitness app reported that they had reached 100 million users in China compared to 23 million in the whole of the USA according to Statista. The same company predicts that the number of users will reach 317.3 million by 2023 in China. With a market volume of USD5 billion, China is first in the world, the USA is second with a market volume of USD3.7 billion and India on third with USD1.6 million. With an annual growth of 10.3%, the above numbers and the push from the Chinese government for a more active nation, I do not see any signs of the industry slowing down.
Supermonkey is another fitness startup which came into the industry back in June 2014. Since then it has raised a total amount of CNY410 million in 4 rounds of funding. As reported by EqualOcean the latest round of funding worth USD54.4 million came in February 2019. The funding was co-led by Starquest capital and Yao capital.
Unlike traditional gyms, Supermonkey is open 24 hours and its users pay as they go. This is very convenient for people whose work schedule isn’t set. Users' can book the mini gym via Wechat which costs CNY50 per hour and the team classes cost CNY100 per class. Supermonkey plans to open 200 stores in China by 2020.
Growing interest in fitness in China has led to the rise of mini gyms that are affordable and are open around the clock. The emergence of these mini gyms comes at a time when traditional gyms are struggling to stay afloat. According to a report from Shanghai-based consulting firm Meritco Services, Internet-based innovative gyms will command a 38% market share by 2021, with traditional facilities narrowing their share to 34%.
A report on sports consumption jointly published in September by Nielsen and JD forecast that China's sports industry will hit CNY5 trillion by 2025, accounting for 2% of the nation's gross domestic product. The report also showed that Chinese spent CNY194.9 billion on sports-related goods online in 2016, double the amount in 2014, and expenditure is expected to grow even further.
In addition, despite the central government's push to promote sports in the country, only 34% of Chinese exercise regularly, compared to the 70% in the United States, indicating that there is still much room for growth for businesses dealing in fitness-related products and services.
In China, commercial fitness clubs came into existence in the ’80s. Since then the economy and living standards have shown great development which has helped the industry to grow. Since then the economy and living standard have shown great development which has helped the industry to grow.
Fitness centers can benefit from allowing their gym-goers to seamlessly share their workouts on their social media accounts, satisfying the Chinese consumers’ need to share, while also growing the brand awareness of the gym.
Investors can bank on the fitness craze to accelerate in China as its young and active population continue to seek healthier and self-fulfilling lives.
For China's fitness industry, although there is a lot of room for imagination in the future, there is still a need to continue to do market education. Whether it is intentional or unintentional, in the past four years, companies like Supermonkey and Keep have continuously provided and optimized online fitness courses and has made considerable contributions to the education market, completing the process from 0 to 1.
China has the right combination of factors – 415 million millennials, a growing middle class that is willing to spend money on fitness and health-related products, and government investment in sports – for fitness centers, fitness accessories, and activewear brands to grow for years to come.