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Caught in a Bind - Chinese Gym Operators

Deloitte ImageThe fitness market in China is developing rapidly. All the elements are in place to foster a healthy industry: government policies designed to encourage people to exercise, a growing weight problem, and recognition of the importance of overall wellbeing. However, current business models appear to be holding the industry back. Rather than focusing on stable growth, many operators are chasing short-term cash flow and churning members – a situation that could cause long term revenue damage and erode brand equity and member loyalty.

Based on extensive market research and the results of an in-house survey of Deloitte staff carried out in both 2006 and 2008, the report examines the state of the gym market in China and discusses recurring themes that are preventing gyms from achieving their full potential. It also illustrates how the demands of gyms members are evolving in line with the demands of their counterparts in more mature fitness markets. Finally the report gives advice to gym operators that are seeking investment from private equity firms or other investors.

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