Consolidation likely

The pressures now being felt in the private-sector fitness industry, suggest industry watchers, mean that rapid consolidation is likely, and that operators will be more willing to offer tailored products, and be looking to diversify into other services as well as straight fitness.

Liu Guoyong, vice-director with the public sports department under the General Administration of Sport of China, said that while no strict industry regulation exists, there are always going to be small-scale centers willing to set up businesses with a few treadmills and part-time coaches.

"The industry threshold is still low, but I do think that consolidation in the industry is likely to be a trend in the coming years, as consumers become more selective when choosing fitness facilities.

"The professional resources and expertise of the larger companies will also help them attract and retain clientele, but there will be some mergers and acquisitions too in the short term, " Liu said.

He also noted that the government is looking at ways of raising and maintaining industry standards, and there are plans to introduce rules and regulations.

As commercial property rentals continue to rise, Wu Shengping, general manager of Hosa Fitness China, said his company is now planning to launch community gyms, in cooperation with various residential organizations.

The government also now requires new residential communities in key cities to have their own fitness facilities, and such a cooperation between public and private sectors could help companies such as Hosa reduce costs.

Wu said Hosa plans to have more than 300 outlets in China by the end of this year, and a large part of them will be in residential areas.

On the other hand, Forward Intelligence's Luo suggested some players are still turning their attention to the high-end market, providing services aimed squarely at attracting wealthy, and corporate clients.