Catch 22 for Chinese Health club Operators - Business enterprise

When the Chinese wellness and fitness sector took off on a grand scale in the early 2000s, the focus was on Beijing and Shanghai. Residents of these cities have greater incomes and are commonly significantly more wellness conscious than those in other parts of the country. Fitness markets in western China have shown robust growth in current years as nicely, as the government encourages financial improvement in its "Go West" policy. With about 86 per cent of the total quantity of fitness centres, commercial gyms dominate the Chinese marketplace. Hotel gyms comprise about ten per cent of the marketplace, when public gyms lag nicely behind in terms of expansion into the marketplace. The Chinese government has prioritised implementing a public fitness policy to increase wellness and fitness among the common population.

In 1995, the Chinese government launched its "Nationwide Physical Fitness Programme". Over a decade later, the Beijing Olympics galvanised people to take up physical activity in the face of a growing obesity challenge caused by rising wealth, adjustments in diet plan, and increasingly sedentary lifestyles. White-collar workers now recognise the significance of exercise and fitness. These factors need to spell success for a nicely-run commercial health club but, in reality, a great many gyms are in difficulty. Short-term money flow is prioritised over member retention. Some health club chains have been expanding quickly in the hope that scale will translate into success. The quantity of gyms operated by the top five fitness chains in China elevated by 35 per cent, year on year, in 2008.

The introduction of key health club brands into the China marketplace began as recently as 1999, when the Hao Shao chain, now known as Hokay, opened its flagship China centre in Beijing. Next came Taiwan's Alexander City Club, followed by the US-chain Bally Total Fitness (in a joint venture with China Sports Business Group) and Tera-Weider, now known as "Tera Wellness". One other of the pioneer international operators in the marketplace, Clark Hatch, has been focusing on the hotel sector given that its 1986 launch. There is a clear distinction between international operators - and a select few nearby ones - who target the premium marketplace, and mid- to low-finish markets on which domestic gyms focus.

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