McDonald’s of China provided additional information to explain its decision to place trainer-like bikes at two of its locations throughout the country.
TikTok’s viral video showed that thousands of calories had been burned. Participants ate burgers and drank soft drinks while sitting at a table that looked like an exercise bike.
What was the Response to This Video?
As a result of the widespread distribution of the TikTok video, McDonald’s China installed exercise bikes in some of its locations. This video has received much attention on the internet.
The new Chinese middle class is trying to be or being sporty.
This is a revolution for a healthy and aspirational lifestyle, explained the ChineseBusinessclub conference. Running has become a popular trend in China, whether it’s a 2km jog to get the morning started, a 5km Color Run together with the running community, or a training program to run a marathon. The desire to be healthier is increasing among young Chinese with higher disposable income. This is driving the growth of fitness clubs and sports events. According to the 2016-2017 China Fitness Industry White Paper (CAA), there were more than 37,000 new fitness clubs in China. In 2016, nearly 3 million people participated in 328 marathons across China, which is 14 times higher than 5 years ago.
Fashion and beauty are motivating factors for this young generation. Sportswear brands are embracing this trend. Adapting their products to Chinese fashion tastes is what they do. They are fashion brands and not sportswear brands. Adidas’s China sales rose 28 per cent in 2016, while Nike holds 22.1 per cent.
Another example is under Armour, which has promoted basketball gear and training in China via Steph Curry as a brand ambassador. Although the company is not a major player in the sportswear market, it has been positioned as an elite and high-quality brand for sportswear.
According to IBISWorld, the industry’s annualized growth rate was 12 per cent from 2012 to 2017, generating $6.31 billion in revenue last year. You can find many types of fitness clubs in China. The first is high-end luxury clubs like WIDETERA Wellness and Will’s Fitness, which offer annual memberships ranging from RMB 6,000 to 10,000. Next, mid-level chain gyms such as Anytime Fitness and Hosa Fitness cost RMB 2,000 or more. Online-to-offline companies such as SunPig and LEOAO offer monthly subscriptions starting at RMB 99.
The founder of Will’s Fitness Club stated that making money from the poor can be very difficult and suggested that he should target the wealthy at the 2017 Chinese Sports Industry Carnival. Over 80% of the market is expected to be in the high end in the future.” These fitness clubs are designed for “gold collar” workers with limited time, so they need efficiency and convenience. Gym clubs need to consider their location. Customers will not use a gym that is too far from their homes or work.
O2O Gym is one example of a platform that connects customers to local gyms via mobile apps. Users can view courses, book personal trainers, and pay monthly subscriptions. Fitness apps are another popular trend in China. They have a larger user base than physical gym clubs. This includes everyone from students to seniors. Keep, which has 100 million users, is the top-rated fitness app in China. Keep now offers an e-commerce option to allow users to purchase sports gear. These apps can be used as a supplement to traditional gyms. They also allow those who cannot regularly go to physical fitness centres to practice their sport still.
The Covid-19 pandemic saw a fitness start-up based on the at-home exercise trend.
Active Arcade is an app that allows users to exercise regularly and was developed by the maker of a basketball app.
The coronavirus pandemic has demanded toys and consoles that allow users to burn calories at home in fun ways.
Investors from China and the rest of the world are increasingly interested in China’s fitness market. We were honoured to be asked by CHINA FIT and IHRSA to research and analyze the Chinese fitness market in China and write the White Paper. We are eager to share our insights with investors and industry insiders locally and internationally.
Fitness Solution in China
Over 90% of fitness studios and gyms have been reopened since the domestic pandemic was under control. Traffic is still at 70% to 80% of pre-pandemic levels. It is uncertain if the industry will fully recover, as it depends on how other outbreaks are managed.
The pandemic has raised awareness on a national level about fitness and health. As a key health industry sector, the fitness industry will continue to grow.
The pandemic has accelerated the digitization of the fitness sector. Gyms are offering online content and services to keep and grow customer relationships. Consumers are more comfortable with online and home fitness.
As the market adapts, the industry standardization level continues to improve over the years. The Matthew effect is slowly emerging, and the market has become more concentrated. Covid-19 has helped accelerate industry reshuffling.
Fitness brands will focus on five areas after the epidemic: business model, store expansions, product and service offerings, maintaining members and online operation.
China’s middle class is more concerned about their health and wants to live a happy, healthy lifestyle. The fitness industry in China is growing rapidly. The number of physical fitness studios is rising, particularly in first-tier cities, where annual membership fees can reach as high as 6 000 yuan. The other side is that large numbers of fitness apps have been downloaded, and the COVID-19 pandemic has fueled their use. The changing lifestyles of consumers and technological advancements have forced the fitness industry to develop innovative solutions to meet the suitable needs of the Chinese white-collar workforce.
The dominant narrative regarding China’s growth (the only major growing economy) is false.
China’s GDP grew 6.5% in the fourth quarter of 2020, only because authorities said so. China’s government moved in areas previously ruled out by the authorities to rebalance economic growth. These were industrial production, real property, and net exports. The authorities want to increase consumption, but it is still slowing down. This isn’t sustainable and excessive lending (especially local government debt) should be curtailed.
Legal problems in the Fitness industry in China
A group of workers at Mango Fitness, north-eastern Harbin, were forced to leave. Local media told a worker that while some of their colleagues and customers were still inside the building, a man came in and locked it with an iron chain. The back door was opened, and the people who were inside were able to get out.
Later, it was discovered that the landlord had locked down the venue due to long-standing rent arrears. Customers rushed to get their money back, and employees demanded that wages be paid in arrears. Local officials claimed that the company’s owner had disappeared after she had previously assured them that she did not intend to close the business.
The Harbin case is a good example of the increasing number of business failures within the fitness industry, which began last year with all Hosa Fitness Centres in Nanjing, explained by a lawyer, Jing Wang. The following year, more Hosa Fitness Centres were closed in Beijing and Tianjin. This sparked heated protests from both employees and customers. Others followed.
Analysts have suggested that Hosa Fitness’s failure and those of other traditional gyms were simply the results of an obsolete business model being replaced by a more profitable and innovative one. According to some, traditional fitness centres relied on new members to grow their business. New members received large discounts if a year of membership was paid in advance. These payments were used to open new centres, hire new staff, and recruit more members. This rapid growth model put a strain on the company’s finances. Businesses often had trouble paying rent for their employees.
A new model has emerged in the past few years, focusing on small fitness studios in major cities. These gyms offer high-quality equipment and personalized fitness plans for middle-class customers. High-pressure jobs and higher-income women are good examples of why fitness studios are so popular. There were 9,411 fitness centers in major cities such as Beijing and Shanghai by 2018, compared to only 4,225 traditional gyms and fitness centers.