Mini- gyms get set for market marathon
The new addition to China’s sharing economy attracts a niche market, but doubts about its sustainability begin to linger
In a four- square- meter cubic box located in a neighborhood in Beijing’s Chaoyang district, a local woman surnamed Yang runs by herself on a treadmill, the only piece of exercise equipment inside.
“I’ve come almost every day for an hour’s run ever since the mini- gym was placed here about two weeks ago,” the 28- year- old white- collar told the Global Times on Friday.
Traditional gyms, with their vast spaces for layouts of various exercise equipments and other facilities such as a shower and changing room, are starkly different from the new minigyms. Mini- gyms take the form of a small cubic box with a mirror, an air purifier, air conditioning and one treadmill. The facility also embraces technology such as a TV screen through which users can listen to music or watch movies.
With shared bikes, umbrellas, mobile phone chargers and miniKTVs already marking big footprints in China’s growing sharing economy, start- up enterprises are eager to follow the business model – which essentially leases operation – by exploring the fitness market with shared mini- gyms.
Debuting in Beijing early this month, the mini- gym’s operation, similar to the use of the shared bike, starts with the user scanning a QR code with their smartphone. Then, the box is unlocked and the user’s smartphone will start recording the amount of time spent using the treadmill by charging 0.2 yuan per minute.
“Just next to my apartment, the mini- gym is very convenient and the treadmill is enough for me,” Yang said, noting she sometimes wants to work up a quick sweat and that the minigym means she no longer needs to be troubled by signing up to a traditional gym with wider equipment options.
Before speaking to Yang, the Global Times noticed that maintenance staff and cleaners from the mini- gym company were regularly checking on the facility to ensure it was still running efficiently.
“Since the product is quite new in the neighborhood, most people are curiously watching the box instead of using it. But young people tend to be the ones more accepting of it,” the maintainer said, noting that the peak usage hours come in the evening from 5pm to 10pm.
Taking the lead
At present, two private technology companies – Misspao and Doubar – are the pioneers in operating minigym projects. Both chose Beijing as the trial location for its initial phase.
Founded in July, Misspao has secured two rounds of fundraising worth over 100 million yuan ($ 15 million), said a report by domestic business publication Yicai Global on Thursday.
The company has also launched its own app with the function of locating a mini- gym and booking it in advance. To use this function, users are required to pay a refundable deposit of 99 yuan.
Doubar, the other mini- gym provider, however, adopted a deposit- free model, with the usage charge being controlled by its official WeChat account.
“Residents can reach the gym within a few steps and can enjoy running indoors without worrying about the air quality,” Jiang Duze, founder of Doubar, told the Global Times.
In terms of distribution spots, “We set a standard when choosing suitable locations for the mini- gyms. We only place our gyms in residential communities where apartments were built after the year 2000 and where there are over 1,000 households,” Jiang said.
Pros and cons
But at the moment, mini- gyms can be found only in Chaoyang’s neighborhoods, a stark contrast to the ubiquity of shared bikes, phone charges and mini- KTVs, which also thrive due to circulating in the bustling business cycle.
Furthermore, the smell of sweat left by other runners in the confined box has been frequently discussed and posed as a disadvantage on social networks.
Nonetheless, some experts say that the mini shared gym is targeted at those who do not particularly identify as fitness fanatics, who could help fill a gap in the broader fitness market.
“The shared gym can meet the needs of users at the rudimentary level of sports knowledge, those who do not require a strict daily fitness regime via more advanced equipment or a personal trainer,” Long Bo, a senior associate for sports investment at Yingchuang Investment Co, told the Global Times Thursday.
In addition, as the mini- gym is inexpensive and flexible to use, elementary sports lovers may be attracted to it as it means they no longer have to purchase a yearly membership card with medium- or large- sized gyms, which locks them to a contract and usually costs thousands of yuan upfront in a one- off deal, Long noted.
However, on the flip side, this could be seen as a problem because the facility is less likely to attract dedicated, more hardcore gym- goers as they require more advanced equipment and a wider range of facilities usually found in traditional gyms to aid their exercising habits. So its simplicity currently only appeals to a niche market, said Zhang Jiayuan, a partner specialized in sports investment at Beijingbased Ransenhuizhi Investment Fund Management Co.
China’s fitness industry is currently worth an estimated 70 billion yuan, yet the penetration ratio of which has only stayed at 0.5 percent so far, domestic news site sohu. com reported in June.
Jiang stressed that the original idea of the mini- gym was to satisfy the growing demand of “anytime and anywhere sports and fitness” in combination with entertainment and intelligence.
“The sharing model acts as a supplementary to traditional gyms and [ is the rudimentary stage of] the whole fitness sector as opposed to posing direct competition,” Long said.
A brightg future?
In March, the Beijing- based State Information Center published a report which predicted that the total value of China’s sharing economy will grow by 40 percent annually in the coming years. The sector is also expected to contribute around 10 percent to the country’s GDP by 2020.
Taking advantage of China’s booming sharing economy, the newly emerged mini- gym model has in return become favored by entrepreneurs and venture capital.
Nevertheless, concerns over the feasibility of the model as well as its profitability have since sprouted.
“In the long run, its mode of charging for equipment rental will not allow the niche market to prosper, minigyms therefore must introduce other ways to boost profits, such as rolling out customized fitness guidance on the TV screen based on big data,” Long advised.
According to Doubar’s founder Jiang, the company aims to put 1,000 mini- gyms into the market across the nation by the end of 2017. Costs will be recovered within 10 months to a year, Jiang estimated.
“The shared mini- gym has adopted the Internet plus mode, which performs only as an entrance for companies in attracting consumers at the moment,” Long said, noting the technology can help his company to reduce operational costs, but it hasn’t brought any essential changes at the user’s end so far.