Sports and Fitness Business in China
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Transcript of Sports and Fitness Business in China
Antonio Graceffo, PhD, China-MBA (安东尼博士 )Shanghai University of Sport (上海体育学院 )
Antonio Graceffo (安东尼 )Contact: [email protected]
Fat is Rich and Muscle is Labor,Hurdles and Opportunities in the Sport and Fitness Business in China
NEW YEAR’S RESOLUTIONS 1. LOSE WEIGHT 2. LEARN A FOREIGN LANGUAGE 3. LEARN A SKILL /DANCING OR MARTIAL ARTS
The world is full of slim, black belts who speak Chinese and French.
Antonio Graceffo (安东尼博士 )
Antonio Graceffo (安东尼博士 )
“My Chinese textbook is lying next to my unused guitar and dumbbells. The guitar is nice, however, because it gives me someplace to hang my karate white belt.” Canadian friend in Taiwan
Flawed business model People are not committed to improvement.
Alcohol, junk food or cigarette shops outnumber
Gyms and foreign language schools
A judo instructor in New York once said, “I had to close my club because it was like having two mortgages.”
Antonio Graceffo (安东尼博士 )
BUSINESS DECISION ONE
Foreign Market or Chinese Market
Here in China, in addition to fighting against the same lazy, human nature you find elsewhere, you are also fighting thousands of years of cultural norms.
Antonio Graceffo (安东尼博士 )
Foreign Market Too small Too concentrated Too much competition Too transient It ignores the other 1.3 billion people in the
country
Antonio Graceffo (安东尼博士 )
Chinese Market Not as large as you might think Not as rich as you might think Wrestling with cultural norms Tremendous growth potential
Antonio Graceffo (安东尼博士 )
Population of 1.3 BillionOnly 51% in citiesLess than 50 million in tier-one citiesUS poverty line $24,000 USD, several times the average wage in China.
Today’s presentation is about the Chinese market because it has the most potential. Even a small fraction of the Chinese market is a multiple of the foreign market.
Antonio Graceffo (安东尼博士 )
Antonio Graceffo (安东尼博士 )
Chinese People want different thingsOne or two generations away from toiling in the fields, the last thing people want to do is diet and exercise.
Fat is rich, muscle is labor
Home Depot FailedJudo teacher’s English book
Athletes ask for supplements Shifu dietary supplements
Good news Interest is growing Urban obesity rates approaching 20%
Antonio Graceffo (安东尼博士 )
Problem Supplements, including cheap copies
and substitutes are sold on Taobao
Takeaway Supplements may represent a good business
opportunity because they are similar to Chinese herbs, medicines, and snake oils which have been part of the culture for eons.
Antonio Graceffo (安东尼 )
For about the last ten years, Chinese people who never exercised have been wearing name brand running shoes.
Now, they are wearing grappling shirts.
Opportunities exist in Sport shoes Sports apparel Possibly home sports equipment
Antonio Graceffo (安东尼博士 )
My 180 RMB eighty-RMB boxing gloves
Made in China, sold in US
The growth of mid-range, mid-priced products
Antonio Graceffo (安东尼博士 )
Takeaway: Mid-range products and services seem to be the next area of opportunity in China.
Antonio Graceffo (安东尼博士 )
Parkour and Gymnastics Gym Problems with China market information Recency bias Information availability bias
Sports lessons and martial arts
Antonio Graceffo (安东尼博士 )
X-sports, hip hop, skate parks, indoor rock climbing
Growing fast, but the market is small
Sports lessons and martial arts
Different kinds of SportsTargets teenagers and college studentsNo moneyLittle mobility No parental support
Antonio Graceffo (安东尼博士 )
It’s more expensive to find a new customer than keep an existing one. The gym business is a business of CONSTANTLY having to find new
customers.
Adult Sport and Martial Arts Lessons
Adults are busyCheapTiredThey start with best of intentions and quit
Antonio Graceffo (安东尼博士 )
Adult Sport and Martial Arts Lessons
You must offer MMA, Muay Thai and grappling but Muay Thai fitness is the money maker
Adults think they want to fight, but actuallyThey just want to lose weight.
Antonio Graceffo (安东尼博士 )
Most MMA gyms and Muay gyms I’ve visited in Shanghai either went out of business, or had low numbers of students.
One Muay Thai gym has survived for about ten years.
Adult Sport and Martial Arts Lessons
Yangpu Jiangwan Sports CenterMMA and Muay Thai for adults, closed downMuay Thai and grappling instructors visa problems/expensiveKarate, taekwondo and san da classes for children.
Antonio Graceffo (安东尼博士 )
Target kids and parents Parents have money Belts, create longevity, belt tests, extra income Performance (parents can see where their
money is going) Competitions (Pride for parents, opportunity
for kids, more money)
Possible Business Opportunity Gymnastics and Taekwondo US Model Tiger Schulman Karate or Y.K. Kim Karate Hasn’t been done yet in China
Antonio Graceffo (安东尼博士 )
Take away: Look into large scale taekwondo chain, for kids, on the model of YK Kim and Tiger Schulman in US
Antonio Graceffo (安东尼博士 )
Supplemental education is big money Juku (Japan) Hagwan (Korea) Bushiban (Taiwan) China, still developing
Supplemental English and Sports Combo
Antonio Graceffo (安东尼博士 )
Growing in China Football Basketball Baseball Some companied hiring foreign
teachers, even standardizing English lessons
Combined sports and English business
Antonio Graceffo (安东尼博士 )
Organize a structured circuit of English competitions and events during the course of the year, like dance recitals, public events, invite other schools and other kids to compete for prizes. This will serve as a showcase and marketing for your school.
Antonio Graceffo (安东尼博士 )
Take away: Well organized program which combines Taekwondo with structured English lessons
Take away: The same, but with soccer or basketball, whereby the
Taekwondo one, because it is in doors and needs less space, would lend itself more to splitting the
time between English and sport
By far, the best market potent is children’s sports. But there are opportunities in the adult market as well.
Antonio Graceffo (安东尼博士 )
Chinese parents spend 30% of their income on children’s education. Combing education with sport would fit an existing cultural norm.
Antonio Graceffo (安东尼博士 )
Global Urbanites (Global Middle Class) Middle class – defined as having 30% of their income available for
consumption Global urban middle class is becoming a homogenous market
segment
Three models Open a gym Send trainers to people’s homes and offices Operate out of an existing gym
Personal training: Pilates, fitness, boxing, body building, yoga…
Popular status symbol among well-off urban market Foreign trainers are very much sought after.
Antonio Graceffo (安东尼博士 )
Takeaway: Operate a personal training business through someone else’s existing or failing gym.
Takeaway: DON’T OPEN A GYM!!!!! Jackie Chan lost his shirt on one and you
will too
Antonio Graceffo (安东尼博士 )
Takeaway: Children’s Taekwondo can be your core money maker, but you can combine it with any or all of the above options.
Takeaway: Explore the concept of selling the supplements, sports apparel, shoes, home exercise equipment, and personal training in someone else’s gym, BUT it must be at ground level.
Antonio Graceffo (安东尼博士 )
Takeaway: Grandparents take children to Taekwondo. Provide highly-social traditional exercise classes for senior citizens
at the same time as Taekwondo classes (obviously in separate rooms).
Senior sports Seniors are the only people with money in this
new generation.
Antonio Graceffo (安东尼博士 )
Contact: [email protected] Antonio Graceffo, PhD, China-MBA (安东尼博士 )
谢谢大家听我的报告
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