China’s fitness industry underwent a boom during the pandemic. It also sought to innovate and find new models that work better in a new and more confined lifestyle.
Investors favor food technology and health technology in the next ten years. It corresponds with China’s national policy to focus on the improvement of people’s health.
In 2017, China’s fitness population has reached 550 million, accounting for 41.3% of the country’s total population. The total output value of the fitness industry has reached about 150 billion yuan, with an average annual compound growth rate of 7.7% in the past six years. It is estimated that by 2020, the total scale of national fitness consumption is expected to exceed 1.5 trillion yuan.
The pandemic has given fitness brands a break from the traditional fitness business model and online fitness became the choice for users. The domestic fitness market is developing from leisure activity to greater emphasis of professionalism. Fitness service providers are also changing their business models to not force annual membership to users and instead launching new service products suitable for evolving user habits.
Deloitte’s "2019-2020 China Gym Market Development White Paper" pointed out that from January to May 2020, the number of active users of fitness apps has stabilized at more than 77 million.
Compared with the same period last year, the number of active users increased by up to 24% in a single month.
McKinsey’s "China Consumer Report 2021″ pointed out that after the pandemic, China’s online fitness users increased by 23%.
Keep is the biggest fitness app in China. Its online users currently have reached 200 million. After 6 years of development, Keep is no longer a pure sports social app, but has evolved to integrate smart hardware, sportswear, light food, and training equipment sales. It is a sports technology platform.
Keep launched an online live broadcast service after the pandemic and cooperated with a number of fitness brands and fitness KOLs to create live courses. It drove up user downloads.
New gyms such as Super Gorilla and Leke used celebrity coaches to create a series of paid online live broadcasts, short videos and other products to attract consumers to their platform.
The pandemic has made new fitness brands emerge in China at faster speed. As of March 31, 2020, the group class live broadcast jointly launched by Leke has reached 30 million people. Its co-founder once said in an interview that online is an inevitable trend.
The online live broadcast of Super Monkeys has been watched by more than 70 million people in 25 days. The pandemic was considered to have brought Keep back to new heights when its businesses were showing signs of stagnation before the pandemic as downloads and activity were sluggish for months.
Investors are making more bets in the sports tech sector. According to statistics from the Santi Cloud Data Center, the number of private financing for the fitness sector from 2017 to 2020 was 48, 41, 29 and 42 respectively, a steady stream of investments. According to data from Lanxiong Sports, there were 180, 148, 87 and 53 financing in the broader sports field in the past four years.
Li Hongwei, managing partner of GGV Capital, said in an interview that in the current GGV investment portfolio, the number of fitness technology brands including Keep is increasing.
"I think that in the next 10 years, food technology and health technology will become the focus of venture capital, and we will also invest more in these two major tracks.," Li Hongwei said.
GGV executive director Li Haojun also said that among hundreds of millions of sports practitioners in China, more new sports brand companies driven by data and technology that meet the needs of a new generation of young fitness users will be born.
"Compared with Europe and the United States, China has a supply chain advantage. In 2020, in the U.S. fitness equipment hardware import market, products from mainland China account for 64.5%, and products from Taiwan, China account for 28.1%. But in the future, when the supply chain develops to the mature stage, there is not much difference in cost advantages. Therefore, fitness equipment brands still need to improve product performance and brand premiums. In the future, fitness equipment intelligence is a key development direction," another investor Zhang Zhuoyu said.
Traditional gym operators are changing how they operate too. The prevalent annual membership prepaid model is generally the biggest complaints from users. The card refund mechanism is unfriendly and usually requires another expensive handling fee.
Gyms are issuing monthly card, timed cards and more flexible options. Leke and Super Gori