No Pain, No Gain: How Two Asian Start-ups Are Disrupting Gyms
KFit and GuavaPass aim to be the Uber of the fitness industry
Using the Internet to pool unused capacity and offering it all online to a much bigger customer base has torn apart the old business models of taxis and hotels. Just look at Uber and Airbnb. Could the same happen to gyms? Several Southeast Asian start-ups seem to think so.
KFit and GuavaPass both offer a monthly multi-gym subscription that lets members access a network of partner gyms, studios, and other fitness facilities. The pass allows members to choose from an array of fitness activities – from the traditional weights and treadmill machines to yoga, rowing, kickboxing, and CrossFit, among others – and book a class through a mobile app or website.
It’s perfect for those trying to figure out what fitness regimen works for them, those who prefer some variety, and those who, for one reason or another, find it difficult to commit to one gym. Aggregating such resources – in this case, fitness spaces – makes sense in Southeast Asian urban areas, where gyms and studios are typically clustered around a select number of hubs like central business districts or large shopping malls.
GuavaPass, founded in 2015 by Jeffrey Liu and Robert Pachter, is available in Bangkok, Singapore, Manila, Jakarta, Hong Kong, Dubai, Shanghai, Taipei, and Seoul. It charges US$63 a month in Manila, and prides itself in offering a well-curated roster of premium classes, plus access to activities in all nine cities, something frequent travelers may find attractive. Members can take an unlimited number of classes, but there is a limit of three visits a month per studio.
KFit, launched in 2015 by Groupon Malaysia founder Joel Neoh, is the more affordable alternative (at US$21 a month for 10 classes), with the option to book additional classes à la carte. Members are limited to activities within their city, but it may have an edge over GuavaPass in terms of variety, having added spa, massage, and beauty services to its folio in February, 2016, reports Tech In Asia. It secured $12 million in funding early this year, bringing its total equity funding to $15.25 million, according to information on CrunchBase.
Both start-ups take after New York-based ClassPass, which launched in 2013 and is currently available in over 8,000 locations worldwide.
Bigger gyms and studios benefit
By partnering with subscription-based sharing platforms such as KFit, GuavaPass, and ClassPass, gyms and studios should be able to reach new customers and fill available slots in their classes. It’s winning by cooperating, instead of competing, right?
Not always. Many ClassPass partners are reportedly happy with the setup, but some, like Jill Harris, owner of a Pilates studio in San Francisco, are not seeing favorable results. Harris tells Business Insider that she decided to end her partnership with ClassPass because, although she was getting a wide variety of customers, most were not converting into full-time, full-paying studio members. Plus, a wide range of customers isn’t what all fitness businesses are after. According to the same article, “In some cases, studio owners don't have the capacity to take on every new ClassPass member who doesn't have experience and needs assistance from an instructor in ways that full-time studio members don't.”
But for Benedict Bernabe, Head of Operations at Beyond Yoga, a yoga studio with several locations in Metro Manila, partnering with GuavaPass has been a smart decision so far. It has let them earn from off-peak classes and gain brand awareness at zero cost (at a profit, even). Plus, it builds up their brand. “Beyond is very specific with partnerships and we've chosen GuavaPass because of its aspirational direction and its curated list of establishments that are also aspirational,” says Bernabe.
It makes sense for bigger studios and gyms to put their classes up on KFit or GuavaPass since they have more slots to fill and ample resources to accommodate customers that may not become regulars. In short: They have scale. But there’s a chance that smaller boutique studios, in the long run, will struggle to benefit from this way of doing business.
One thing is for sure. Whether these two start-ups shape up to be “the Uber of fitness” or not, with the health-club penetration rate in Asia-Pacific averaging just 3.8% per the 2015 International Health, Racquet & Sportsclub Association report, it’s clear there is plenty of room to grow in the region’s fitness industry.