Sector Report

Taiwan fitness – Let’s do it

by Ken Shih / Sep 23, 2019


Global fitness overview
Gym membership in the USA and Europe is considerably higher than in Asian countries, and the numbers remain stable. But the emergence of budget operators like Planet Fitness is starting to lift these figures. While the fitness market is becoming more polarised, people are increasingly willing to pay more for a better experience. Peloton’s successful promotions have reignited a stagnant market, and the overall gym ecosystem is benefitting as a result. Indeed, active sports apparel is one of the fastest-growing categories in fashion today.

Taiwan fitness trends
Fitness is taking off in Taiwan, as consumers place more value on health and wellness and higher disposable incomes mean more people can afford high-cost, all-inclusive gym memberships. But while participation rates are increasing, they remain low compared to other Asian nations, so there is a lot of potential upside. World Gym and Fitness Factory (operated by Power Wind Health) are the big guns in the Taiwan market. The government is also on board, with plans to promote physical activity and build more civic sports centres over the next few years.

Recurring earnings of chain gyms
The industry has enjoyed double-digit growth in recent years, with gym membership spending on the rise and personal trainers increasingly in demand. The big chains enjoy strong recurring earnings thanks to economies of scale, which benefits cost efficiency and retention rates, and maturing fleets which drive margins. We also see upside from one-on-one coaching. Even under the worst-case scenario of oversupply and price cuts, gym chains should be able to leverage their scale and diversified services to shore up earnings.