China Paradigm interviewed Tom Xiong, CEO, and founder of Move Shanghai, a fitness app in China, to dive into the market of gyms in China and Shanghai and to understand the developments, risks, and particularities of the fitness industry in China.
Tom Xiong, tech expert, speaker and reputed entrepreneur in China
Born in China, Tom Xiong grew up in Sweden. From a very young age, he was very interested in new technologies and the evolution of the Internet. He founded 3 internet-based start-ups in Sweden.
He first founded Buggy.nu in 2004 which was one of the largest price comparison websites in Sweden within the IT segment; then he launched Tom’s Hardware Guide, the 3rd largest online IT magazine in the world and the 2nd largest in Sweden. Finally, he worked for more than 3 years as the founder of KX Media, a digital marketing advisory in the Nordics region.
After selling his last start-up, he left for the United States where he wanted to continue his entrepreneurship adventure before returning to China, a country where he had wanted to work for a long time. It was, therefore, in Shanghai in 2015 that he decided to launch Move Shanghai.
Besides his fitness company in China, Tom Xiong is also the creator of the well-known Swedish podcast Den Digitala Draken on China’s tech industry and also writes excellent articles for the best Swedish tech websites on entrepreneurship in China and the tech industry in China.
Move Shanghai, a tech solution which will disrupt the Gym market in China
Move Shanghai is a digital platform, a fitness app in China, that allows people to access thousands of different fitness activities around Shanghai.
It works as a marketplace like Airbnb or Uber, where the consumer can access everything through this fitness app in China instead of going to one gym and get one annual card or pay per time. This tech solution offers premium health fitness membership to enjoy all types of fitness and sports in Shanghai from 5-star hotel swimming to MBA style basketball classes to cross fit and yoga, etc.
The idea is to help urban Chinese consumer to stay active over time:
‘‘We saw a huge part of the Chinese market of people who want to have fitness because it makes them more healthy, but the main problem is that they are not super into fitness. It’s very fast because they get bored by only going to one place. So, we hope to be able to allow more people to work out and make the pie bigger.’’
Move Shanghai aims at delivering the best experience and avoid the inconvenience of going to the gym in China:
‘‘The reason why I started Move Shanghai is that I really hated going to the gym and then I got frustrated because whenever I went to the gym, someone was telling me how bad a person I am and how unfocused I am and how I just need to shape up my life.’’
Today, Move Shanghai has about 20,000 members in Shanghai, 150 different studios, and 10 people in the team.
The after-pay business model in China: how does it work?
Move Shanghai works on the after-pay business model which means that they pay the studios and gyms in China for the number of visits they receive based on the number of times their own members have been to a particular gym. This is called an after-pay business model in China.
Tom Xiong justified this strategy in our China podcast:
‘‘The fitness market in China is very immature, and you have very varied pricing between different studios, different locations of the city, etc. And to have a profit-sharing model, you need to have a slightly more mature market where the pricing levels have matured, where people are charging after what their demand is, and you have more clear layers of different qualities.’’
How to attract new consumers in the fitness industry in China?
According to Tom Xiong, the important thing is to make Chinese people understand the value of sport and for those who have already understood it, to help them keep pace through their fitness app in China. To meet these consumers and convince them, here are two ways:
‘’Number one is creating an opportunity for people to learn about fitness, experiencing it without it been very hard.’’
For that, Move Shanghai do a lot of at-work educational workouts with their strategic partner We Work. They run about 10 to 30 different classes every week for WeWork, and this is an opportunity for people at their workplace to experience what this whole thing about fitness is.
‘‘The second biggest driver in this is to make you feel you are not risking anything, you don’t need to be afraid, you will be able to get something perfect for you.’’
Tom Xiong explains that the main reason why people do not want to often go to the same gym in China is that before going to that yoga class for the first time, they feel that everyone is more beautiful than them, better at yoga and are afraid to be discomforted. That is why Move Shanghai’s primary work is to help the consumer forget all these bad feelings and want to try a new experience within the gym market in China.
Listen to this episode here: