Vol.10 Chinese comedy hit "Yolo" revitalizes the fitness industry
1st issue on sports
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Chart of the month
According to data from Maoyan, a box office data portal, China’s comedy hit “Yolo,” which draws inspiration from boxing for life motivation, has amassed a box office of more than RMB3.45 billion in its 40-day theatrical run since Feb.10. This positions it as the 14th highest-grossing film in China. Beyond cinemas, the movie has sparked a fitness frenzy.
In the Micro Connect Cash Yield index, the fitness and yoga segment — which includes over 60 fitness stores in China’s top-tier cities that have raised capital by listing their Daily Revenue Obligations (DROs) on MCEX — began to exhibit an upward trend following the Chinese New Year. From February 17th to March 17th, the index’s 30-day rolling average more than doubled.
It’s evident that many gyms and studios are leveraging this trend by initiating joint marketing campaigns with cinemas to attract potential customers.
Industry insight (curated charts, data, etc.)
Untapped fitness potential
The extent to which “Yolo” can boost the fitness industry remains to be seen. However, it's undeniable that over the past few years, the fitness industry has become increasingly competitive, with the pandemic accelerating the industry's reshuffling.
The overall fitness industry still has significant growth potential. According to a report by China Insights Consulting, in 2022, the fitness participation rate in China was 26.5%, lower than the US’s 47.8% and Europe’s 42.5%. The gym membership penetration rate in China was only 2.8%, much lower than the 19.9% in the US and 7.9% in Europe. Additionally, the annual expenditure per person on fitness in China was RMB 2,518, substantially less than the RMB 16,425 spent annually in the US.
The rise of exercise among young adults and seniors
According to the 2023 China fitness industry data report released in February, at the end of December in 2023, the total number of fitness consumers in China dropped by 2.38% from the previous year to 69.75 million.
The report also highlights that the most active fitness consumers are between 26 and 35 years old, although their share has slightly decreased. Meanwhile, the share of younger (19 to 25 years old) and older (over 50) fitness enthusiasts has grown, particularly among seniors.
Slower new opening
Last year, the total number of fitness facilities across China fell to 117,000, which included 36,000 fitness clubs and 42,000 studios, indicating a significant shift in the landscape of the country's fitness industry. While few large chain fitness clubs shut down last year, many smaller studios (like yoga and Pilates) gained popularity.
Offline vs online
Although traditional gyms that operate on a prepaid model still dominate the market, they're now under more regulatory scrutiny and face competition from innovative fitness models.
Last year, fitness clubs and studios in major Chinese cities experienced a drop in average monthly revenue. Personal training accounted for 60% of their income, while membership fees saw a significant decline. Meanwhile, revenue from more flexible options like personal training, group classes, and training camps went up.
The move towards smaller, more varied fitness facilities is clear, from boutique studios to 24-hour gyms, personal training studios, and specialized studios. The pandemic has only sped up the shift to online fitness. KEEP, a leading online fitness platform that went public in Hong Kong last year, doubled its revenue from 2020 to 2022, reaching RMB 2.212 billion.
Through the Micro Connect Macao Financial Assets Exchange (MCEX), micro and small businesses can raise capital via a daily revenue-sharing model. This means that a store shares a predetermined percentage of its daily cash flows with investors throughout the investment period.
Thanks to China’s digitized economy, we can automatically capture shared revenues every day. Based on data from more than 12,000 stores funded through MCEX, the Micro Connect Cash Yield Index tracks the amount these stores pay daily per RMB 1,000 financed. For example, if the index is at 1.5 today, it means the stores pay RMB 1.5 in return for every RMB 1,000 of financing. This offers a glimpse into how these small shops are performing on a daily basis. In short, we follow the money.