Survival of the Fittest
In an interview with China Daily, Simon Lee says that Hong Kong has great potential to become a fitness industry hub as there is a big demand for health and physical education from the middle class, many of whom are concerned about their health and appearance.
As Hong Kong people crave for a healthier lifestyle and shedding more pounds, fitness centres have mushroomed all over the city. Key industry players see the SAR as a growth hotspot for fitness but warn that smaller ones could get squeezed out in a tough contest.
A recent health survey shows that 18.8 percent of those between 18 and 24 years old in Hong Kong are obese. Fitness companies, both local and from overseas, have cashed in after spotting the huge potential in the fast-growing sector.
“Hong Kong people have the desire to lose weight and keep fit,” says Simon Lee, Senior Lecturer of School of Accountancy and Co-director of International Business and Chinese Enterprise programme at The Chinese University of Hong Kong Business School in an interview with China Daily.
He notes that the fitness industry has undergone a revamp in the past decade. “It used to be a big market among ladies who want to look better and slimmer. But now, it’s also the men who want to look better,” Lee adds.
The quality of a gym, without saying, depends largely on the qualifications and services of personal trainers and its overall environment.
But gym regulars said they felt repelled when trainers tried selling them courses or attempted to extend their contracts.
What drives operators’ sales strategies, undoubtedly, is the urgent need for steady cash flow for the upkeep of their operations.
“Their fixed costs are very high — rentals and depreciation of property. Thus they need to hard sell to cover all these costs and capture a bigger slice of the market. In terms of staff quality, it’s not regulated in the market and the quality varies,” says Lee.
Lee agreed that Hong Kong had great potential as a fitness industry hub due to its status as an international financial and food center and its people not having adequate exercise. “There’s a big demand for health and physical education in such a market full of middle-class workers who are concerned about their health and appearance,” he says.
However, he warns that rising rentals and lack of regulation posed challenges to the industry, while smaller operators will face more difficulties as they lacked sufficient cash and scale.
“Big companies could provide better marketing and advance equipment with their abundant cash, and have a strong bargaining power with landlords over rentals.”
Apart from rentals, Lee says intense competition fueled by the increasing number of small and medium-size operators entering the market will squeeze the smaller ones out… Read More (PDF)
Source: China Daily
Date published: 15 August, 2014
Photo: China Daily