Analysis | Niche fitness studios step up the game to win Hong Kong's gym goers

Hong Kong's well-heeled technology geeks, fitness fanatics and ultra-competitive business elite are driving a fresh rush to open premium, boutique health studios and wellness firms. The city's estimated 940,000 gym members are prime targets for sellers of new health gadgets, while niche fitness firms are tapping into a desire for exclusivity in the drive for physical perfection. The Hong Kong fitness industry is estimated to be worth US$300 million, according to data from the International Health, Racquet and Sportsclub Association. With more than 110 commercial health clubs in the city, Hong Kong's penetration rate sits at 4.2 per cent, the highest in Asia. For decades, Hong Kong's fitness scene was dominated by big box gyms - chains such as Fitness First, Pure, Physical, and California Fitness - where customers paid set monthly membership fees to use machines, weights and were given unlimited access to group classes. Anytime Fitness, the global chain which opened its first gym in Hong Kong in August, is trying to shake up that cosy group by opening small gyms that run 24 hours a day in suburban areas. It is targeting 100 locations in Hong Kong by the end of this year. Purveyors of boutique workout formats are also moving in on the big box chains. Niche studios such as XYZ, Studio Fitness, Flex and H-Kore that provide specialised attention to a discipline - from cycling to mixed martial arts, pilates or crossfit - are rising in popularity. The city now even has its first dedicated trampoline studio, which sells rebounding cardio workouts at HK$550 a class - about 15 times Hong Kong's minimum hourly wage. "The average is HK$300 for non-gym studio prices," Bounce Limit co-founder Lucia Tam says, likening it to New York City, where fitness fanatics don't blink at paying US$35 to attend a spinning class. Tam says she's able to push the price ceiling with her classes because her studio is the only one of its kind in the city. Pure chief executive Colin Grant estimates that a third of the Hong Kong fitness market now comprises boutique studios. Deloitte partner Alan MacCharles says that while some gym renovations are due to ageing facilities and not necessarily expansion, Hong Kong has two macroeconomic factors at play that boost an interest in health and wellness. "As populations become wealthier, they become more attuned to what they eat," he says. "And when you're young, you don't feel like you have to take care of yourself as much. That changes as you get older. Hong Kong is getting wealthier and older. Those factors play well. "As you add technology ... a phone that asks you how many calories you're eating, that influences behaviour. Gyms are getting better, smarter, and realising they don't have to be an equipment rental service," MacCharles explains. An example of that is Pure's upcoming launch of immersive fitness technology by Les Mills. In March, gym-goers at its soon-to-be-launched California Tower location in Central will be able to take cycling classes in a room with projections of cinema-quality visuals, synchronised with music and graphics. The fitness boom has been evolving for a long time, says Derek Kwik, a venture capitalist and ultra-marathoner who invests in sports-related technology. "That goes back to 1999 when the Standard Chartered Marathon first started; there were just over 1,000 people," he says. Last year the marathon attracted 73,000 runners. The website has been known to crash within a couple of hours of registrations opening due to huge surges in traffic. Kwik, the first Hongkonger to run across the world's highest, driest, hottest and coldest deserts, says market growth has been spurred by technological advances from wearables and has also helped related businesses, like sportswear, grow. Lululemon, the Canadian yoga wear company often credited with creating the fashionable sportswear market, is ramping up its growth in the region. The brand's Asia-Pacific manager Ken Lee says it will open two proper stores in Hong Kong this year, as opposed to showrooms, and expects to expand its team from around 40 to more than 100 people. "Hong Kong is becoming much more of a running scene than it was 10 years ago," Kwik says. "The momentum has really built up and it has benefited stores like Patagonia, North Face, Columbia and any of the running stores like Racing The Planet. "For people to do those events you have your running shoes and equipment and you add in technology, which over the past two years, these wearable devices have more people interested in health," he says. "People are able to link their iPhone or Android to their computers so when they go running they have a GPS route of where they went running and the whole social networking thing that gets tied into Facebook. It's almost like a competitive or sharing thing like 'I ran 5k today' or 'I ran Bowen Road'. It creates this sense of community. It's not just one or two things. It's everything tied in together and you have this critical mass that connects everything together." Fitness First, one of the largest gym chains in the world, is making a push into using technology to attract and engage its members. Starting this year, it will launch its own mobile app. A US$5 million global initiative, it will include basic functions such as finding a club, booking yourself into a class, or inviting a friend to a class. But more importantly, it will also send rewards to the user and provide a treasure trove of data about members. Fitness First Asia chief executive Simon Flint says: "If you have location services enabled when you check into the club, we can ask you to rate a class when you exit. We can measure and monitor how you feel about our performance and feed that back into the business. At a more advanced level, it's what we call the gamification part." Enabled by the growing popularity of wearable technology devices, the gym will send a badge or a reward to members who have passed milestones, such as running a personal best 5km time. "You've got these business executives who want to know how they're doing and want to know how they rank among their colleagues and others at the gym," Flint says.