2019-2020 China Health and Fitness Market White Paper
Deloitte release jointly with CHINAFIT
Now is the best time for enterprises to invest in digital field and improve their digital capabilities. How to create interaction and improve stickiness with your customers and ecosystem partners through which platform and interaction mode are the key issues that enterprises need to think about.
Taylor Lam, Deloitte China Technology, Media & Telecommunications Industry Leader
China's fitness market is becoming more and more attractive to investors both home and abroad. In order to deep dive into the Chinese fitness industry and understand the market dynamics and future trends, we are honored to be commissioned by CHINAFIT and the International Health, Racquet and Sports Club Association (IHRSA) to conduct research and analysis on the Chinese fitness industry and to author the White Paper. We hope to share our thoughts with both local and international industry insiders and investors.
Alan MacCharles, Deloitte China Commercial Strategy and Research Partner
As the philosophical founder of Taoism, Loazi, once said: He who knows others is intelligent, he who knows himself is wise, he who conquers others possesses might, he who conquers himself is invincible. He who knows contentment is rich, he who perseveres is a man of will. He who does not lose his root can endure, he whose Tao survives him is long-lived.
As a business operator, it is important for us to understand the normal status and average level of the industry. But it is even more important to understand the state of our own business. We believe this report can help you better understand China's gym market. It allows operators to use the average development level of the industry to measure the state of their own business, so that you can make a more accurate judgment in your future business operations.
Yan Sihai, the Founder of CHINAFIT
The fitness market in China has been developing rapidly for more than 20 years, going through various phases of development in the past two decades. In the past few years, the fitness industry has once again witnessed accelerated growth. In 2019, the top 18 cities we analyzed, had an estimated total market size of RMB 34 billion, 27,600 stores and 8.79 million members. The industry is becoming more diversified, with personal training studios, boutique studios and new-model gyms contributing to its rapid growth.
As a whole, China's gym market is still in a growth stage with intense competition and lack of unified industry standards. The main factors currently hampering the development and standardization of the industry are market homogeneity, lack of professional management and trainers and opaque market information.
We hope this "2019-2020 China Health and Fitness Market White Paper" helps provide a comprehensive, authentic and authoritative analysis of the health and fitness industry in China. This report is based on hundreds of store visits and interviews across 18 cities in China, as well as big data analysis of current market information. It estimates the market size of China's fitness industry in the 18 cities visited and analyzes the competitive landscape, operating status, consumer behavior and industry trends in a variety of cities. This report will enable key stakeholders to better understand of the industry in order to anticipate and formulate future operational and development strategies.
Overview of China Health and Fitness Industry
Trend of China Health and Fitness Industry
It is a good time for the domestic fitness industry to accelerate development. Compared with the penetration rate of 6.5% in the leading market, the national fitness penetration rate has gradually increased to nearly 4% but still relatively low. There is currently a gap compared with the international market and significant space for demand in the domestic industry to grow. The development stage of the industry is an optimal time to expand the number of offline gyms.
- Market drivers: driven by fitness-related policies, increased consumption, enhancing fitness awareness and popularization of the "Internet +", China's fitness industry is undergoing industry transformation and improvements, while growing in market size.
- Competitive landscape: the domestic market is fragmented into regions, with distinctive regional brands. However, new capital coming into the market is expected to generate nation-wide brands. Over time the market will develop more niches and brands will become more stratified.
- Business model: as the industry faces disruption, fitness brands are actively optimizing their business models, adding personal training, group exercise and other value-added services. They are also exploring new types of charging models. The industry trend is towards more transparent, professional and standardized services, driving the development of fitness-related industries.
The Impact of COVID-19 Pandemic
- With the domestic pandemic being brought under control, over 90% of gyms and fitness studios have been gradually reopened, while traffic remains at 70-80% of prepandemic level. The full recovery of the industry remains uncertain, depending on the control of further outbreaks.
- From a long-term perspective, the pandemic has increased people's awareness of health and fitness on a national scale. The fitness industry, as a core sector of health industry, will continue to grow and diversify the long-term outlook is positive.
- The pandemic has accelerated the digitization of the fitness industry. As gym operators roll out online content and services to maintain and expand customer relationships, consumers are becoming more familiar with home fitness and online fitness.
- In recent years, the industry standardization level has continuously improved as the market adjusts itself. The Matthew effect has gradually emerged, and the decentralized market is transforming to a relatively concentrated market. Covid-19 has accelerated industry reshuffling.
- After the epidemic, fitness brands will focus on improving in these five areas: business model, store expansion, product and service offerings, maintaining members, and online operation.
Operation of Leading Gyms
- Traditional gyms have operated using an asset-heavy model. They have mainly developed around the city where they are headquartered, using the headquarter as the center, while expanding to surrounding cities. In terms of traditional gyms, LuckyBird has the largest number of stores. After acquiring DAY DAY FITNESS in Zhejiang in 2018, the number of stores increased rapidly. Both Will's and Tera Wellness use Shanghai as their base; they have nearly 100 stores in Shanghai and are expanding to East China.
- New-model gyms have adapted an asset-light model through standardization and digitization, and have rapidly expanded by opening in new cities and store franchising. LeFit has rapidly penetrated into eight cities in four years since its establishment. It now has over 450 stores, making it the gym with the largest number of stores nationwide. Other new-model gyms, represented by LikingFit, SunPig, Kuaikuai and Super Monkey, have developed innovations in group class content and charge models. These gyms work hard to standardize their products and services to attract consumers.
The free version of 2019-2020 China Health and Fitness Market White Paper can be read and downloaded through Deloitte platform. The full version report contains detailed data (about 100 pages) of the health and fitness market in 18 first-tier cities and new first-tier cities. Please contact Deloitte industry research team (Adrian Xu, Deloitte China Commercial Strategy and Research Director: email@example.com) to get the full report, if needed.