Hong Kong fitness industry moves further towards pay-as-you-go pass model
In October, gym-goers in Hong Kong will have more choice when it comes to fitness passes as ClassPass launches in the city
With the rise of subscription-based services like Netflix and Spotify, it was only a matter of time before the online craze hit the fitness world.
In North America and Europe, open fitness subscriptions offered on a monthly basis are a fast-growing industry, allowing gym goers to pick specific classes, gyms, studios and types of workout that meet their needs. It also allows customers to forgo signing a years-long contract at one gym or gym chain, a common feature of memberships at Hong Kong’s top workouts spots, including Pure Fitness, Fitness First, RAW Personal Training, TopFit and Anytime Fitness.
The latest iteration trying to break into the Hong Kong market is ClassPass, which will launch in October. Fritz Lanman, the chief executive of ClassPass, wouldn’t disclose specific pricing, or the names of the gyms with which the company have formed partnerships; however, he did say ClassPass in Singapore, which launched recently, now has 120 gyms signed up.
Lanman compares his product to mobile apps that are disrupting multiple industries with entirely new business models.“The reason people use food delivery services like Deliveroo,” he says, “is [because] they want variety. Nobody wants to do the same workout over and over and we’re really seeing this become prevalent in the fitness world.”
In 2017, the Post reported that Hong Kong had seen a 36.5 per cent rise in the number of gyms opening in the past eight years, even amid the closure of some high-profile gyms such as JV Fitness and Epic MMA Club.
The integration of open fitness passes into the workout world has not been a smooth one; the North American market is flooded with options including FitReserve, Fitocracy and 8fit.
The New York Times Magazine recently called this the era of the “digital middleman economy” in which mobile, tech-based apps are forcing brick-and-mortar stores to operate under new rules that may hurt their bottom lines. Forbes calls it the “subscription economy”, and notes 60 per cent of the consumers are female.
A recent study from management consulting firm McKinsey & Company estimates the “subscription e-commerce” industry was valued at around US$2.6 billion in 2016 in the US alone. It also found that the industry had grown by more than 100 per cent a year over the past five years. The report noted the industry was being driven by a high number of venture capital investments in start-ups. The average consumer is somewhere between 22 and 44 years old, and more women are attending classes than men.
Lanman says millennials are driving the trend, and that ClassPass is much like Spotify in that its technology will pick up on what you like and start to tailor options based on your user history. “This is the way the market is moving,” he says.
GuavaPass, which launched in Hong Kong in 2015, follows the same model. Currently, in Hong Kong, you can get a four-class pass for HK$588, which works out at HK$147 a session. The company also offers unlimited classes for six months at HK$1,488 and lists 110 studios as potential places to work out, including CrossFit Cavaliers, HIT45 and Ozone Fitness.
Jeffrey Liu, the co-founder and chief executive of GuavaPass, says attitudes towards fitness have changed over the past few years. This is mainly driven by the habits of youthful consumers, who want flexibility, fewer contractual obligations, and the ability to cancel at short notice.
“Having grown up in Hong Kong, I’ve really seen the change in people’s mentalities here,” says Liu.