KFit, a new fitness-sharing platform, sees huge potential in the Asia Pacific region compared with North America where subscriptions are lagging.
“Asia Pacific is the fastest-growing region in the world in terms of fitness center subscriptions,” founder Joel Neoh told EJ Insight in an interview.
The low penetration rate of fitness center services in Asia Pacific reflects huge potential for future growth, he said.
The region’s health club industry has 17 million members spread across 28,000 clubs in 13 markets, according to the 2015 IHRSA Asia-Pacific Health Report published in February. Annual revenue is about US$14.3 billion.
Australia and New Zealand have the highest penetration rates at 14.8 percent and 11.4 percent, respectively.
The overall average penetration rate in the region is 3.8 percent, signifying room for growth.
Opportunities for the fitness industry abound in China and India which have penetration rates of just 0.4 percent and 0.12 percent, respectively.
KFit offers people more ways to keep fit through an all-access membership that allows them to use hundreds of local fitness facilities.
The service relies on mass subscriptions similar to Groupon but has a different business model, said Neoh, who worked for the group buying site as its Asia Pacific vice president.
“Groupon sells a few thousand vouchers and passes customers to merchants. In KFit, we help individual customers fill empty slots in different fitness centers. It’s more like yield management.”
Since its launch in April, the company has signed up more than 500 partners, offering more than 10,000 classes per week and more than 100,000 fitness and activity slots per month.
About 100 new partners join the network each week.
More than 86,000 users have registered their interest in KFit’s services, 11,000 of whom are in Hong Kong and 50,000 in Kuala Lumpur, Singapore and Taipei. The remainder are in Australia and New Zealand.
Neoh said the first challenge for a start-up is to find the right business model.
“A lot of start-up founders have strong passion but the business lacks potential to grow fast… we call it hobby,” he said.
“In general, if a business idea is good and the founder is passionate, smart people will come and join the team. When the team is ready, the funding will come as well.”
There is enough money to go around but there are only a few companies willing to invest in certain ventures as most start-ups are not well-positioned, he said.
KFit has raised enough funds from angel investors to operate for the next six to eight months.
Also, it will seek strategic investors in the next two months, he said.
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