Asia Pacific fitness club sector now worth $168 billion shows Deloitte report

25 July 2018 3 min. read
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The Asia Pacific fitness industry is now worth a record $16.8 billion according to a report from Deloitte, with the region’s still immature markets ripe for massive ongoing growth.

In a recent report from Deloitte on the Asia Pacific fitness market, conducted in collaboration with the International Health, Racquet and Sportsclub Association (IHRSA), the Big Four accounting and consulting firm has calculated revenues generated by 25,000 clubs across 14 regional markets to have reached a combined worth of $16.8 billion – the highest figure ever achieved.

And with Australia and New Zealand considered the only mature fitness club markets (the former estimated to be worth about A$2.5 billion), the authors of the report believe there’s still considerable room for further regional growth. Alan MacCharles, partner at Deloitte China, brackets the market development into three tiers; the first including the aforementioned Australasian states; tier two consisting of Hong Kong, Singapore, Japan and Taiwan, and; the final tier, encompassing the remaining Asian Pacific countries of the report.

Hong Kong and Singapore for example, as city-states with large expat and high income populations, have increased their market penetration rates to 5.9 and 5.8 respectively, from an average rate of 3.8 since 2015 – with the rapidly maturing market offering some room for growth as compared to say Australia, which with a penetration rate of over 15% and rising labour and real estate costs is bordering on saturation with little scope for growth.Asia Pacific fitness club sector now worth $168 billion shows Deloitte reportThe third tier, however – including Malaysia, China, the Philippines, Thailand, Vietnam and Indonesia, with penetration rates ranging from 1.04 percent down to as little 0.18 – represents a significant growth opportunity. With the Asian population (inc. India) pushing beyond 4.5 billion residents, and a swelling middle class in emerging locals economies increasingly health conscious, the just 22 million counted club members of the report could indeed be set to explode.

“Driven by the momentum of economic prosperity, the fitness market in the Asia Pacific region has shown steady growth, with a positive outlook going forward,” said MacCharles of Deloitte. “Overall market penetration is on an upward trajectory, reflecting an increasing awareness of the importance of good health and the role a club membership can play in this.”

Yet, as Kristen Walsh of the IHRSA notes in an article with Health Club Management magazine, the opportunities come with challenges; “Real estate costs, limited rental availability, infrastructure underdevelopment, lack of professionalised services and increasing competition are just some of the realities that club operators face when working in the Asia Pacific market.”

As a breakdown, the report data shows that China, Japan and South Korea lead the region with the overall number of fitness club members, with the three nations accounting together for more than half of the 22 million members across the countries of the study, while South Korea and Japan also have the highest number of clubs; including nearly 7,000 in South Korea, compared to the just 370 clubs in Indonesia serving the world’s fourth largest population.