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VIETNAM SPORT 2018

15 – 18/11/2018

Hanoi International Exhibition Center (ICE)

91 Tran Hung Dao Str., Hoan Kiem., Hanoi, Vietnam

VIETNAM'S GROWING MIDDLE CLASS PUMP UP FITNESS INDUSTRY
19/03/2018 14:03
Vietnam's growing middle class pump up fitness industry
People work out at a fitness center. Over the past decade, an increasing number of people have joined gyms, gradually transforming regular workouts from a niche interest to a mainstream pursuit. File photo

Gyms have been popping up like Popeye's muscles in major cities across the country.

Commercial gyms used to be a rarity in Vietnam, where 70 percent of the population live in rural areas with labor-intensive agricultural production as the main source of livelihood.

This has all changed now, and the booming fitness industry has the country’s average 5 percent economic growth since 1999 to thank for that.

The World Bank forecasts that Vietnam’s $200 billion economy is likely to grow to a trillion dollars by 2035 with more than half of its population, compared with only 11 percent today. The country has joined the ranks of the global middle class with annual average income of $2,100 last year, according to the World Bank.

The rapidly growing middle class, mainly living in urban areas, are traveling farther, eating healthier and becoming fitter.

Over the past 10 years, an increasing number of people have joined gyms, gradually transforming regular workouts from a niche interest to a mainstream pursuit.

For many people, going to the gym has become a daily habit, and they are becoming increasingly willing to spend big bucks on gym membership.

“There are gyms that charge members just VND400,000 ($18) per month,” said Ngo Manh Duy, an office worker in Ho Chi Minh City, who has recently become a member of high-end health club chain after a few years working out at low-cost and poorly-equipped gyms.

“Some gyms even offer a monthly membership fee as low as VND200,000,” he said, referring to small, dingy gyms that are badly equipped.

High-end fitness centers offer a wider variety of classes, including yoga, cardiovascular and muscular exercises, said Le Viet Quy, who has been a member of a luxury fitness club for three years, adding that trainers at high-quality and expensive fitness centers are internationally certified and members can get a personal trainer to help them with their workouts.

Quy added that it is more economical to join  a gym where most of the equipment is imported with reputable brands.

Revenue in Vietnam's fitness industry will hit $54.5 million in 2016 and is expected to grow annually at 19.9 percent to $112.7 million by 2020, according to Statistics Portal.

The penetration rate of fitness facility members in Vietnam stands at 5.97 percent this year and is forecast to reach 10.66 in the next four years. To put the figure into perspective, the gym user penetration rate in the United States is 16 percent, 15 percent in the Netherlands and 13 percent in the United Kingdom, according to a fitness company in the Netherlands.

The fitness industry has become attractive to foreign investors as an emerging market with great potential.

Industry experts predict that the high-end fitness segment in Vietnam will continue to grow at a rate of 50 percent in the years to come.

California Fitness and Yoga Center (CFYC), one of the top players in the market, set up its first fitness facility in Ho Chi Minh City in 2007, and has rapidly expanded to 24 centers in seven cities throughout the country.

A 250 square meter gym could cost an estimated $1.5 million.

Japanese financial group Mizuho Asia Partners in 2014 acquired a 10 percent stake in the fitness firm for $15 million.

CFYC, managed by California Management Group, has diversified its services targeting urbanites from various age categories. For example, the gym has built separate luxury fitness centers that go under the name Centuryon where members pay as much as $25,000 a year.

Top players include the Hanoi-based Elite Fitness, which has opened six facilities in Hanoi and two in Ho Chi Minh City.

Getfit Gym & Yoga, which has been in Vietnam for seven years, has laid out its expansion plans for the country towards 2020, with an average growth rate of 20-30 percent per year, said CEO Nguyen Huu Phuc.

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