The pandemic has brought to light the importance of keeping fit and healthy. Despite what COVID-19 has put Malaysian gyms through, there may be a bright future for the fitness industry. That’s according to Babel Fit’s General Manager, Billy Waters.
Malaysian gyms have taken a huge hit after shutting physical outlets during lockdowns. However, they’ve now learnt that fitness doesn’t solely exist within the four walls of the brick and mortar.
So, we spoke to 4 local gyms to find out what lessons they’ve learnt to survive a pandemic since hustling through 2020’s MCO.
Fitness Is A Social Activity Motivated By Community
YouTube is an endless library where anyone can learn anything. Hence, these gyms needed to design courses that could convince members and the public to choose them over social media’s content.
It certainly helps when your brand is constructed on a community-based mindset. This worked in the favour of KL gyms TRIBE and FLYPROJECT.
TRIBE’s brand is built on the relationship between its instructors and members. Leveraging on this community spirit, livestream classes were their opportunity to recreate the in-person experience online.
The experience from FLYPROJECT’s livestreams can’t be found following YouTube videos either. Its CEO, Kenny Choong illustrated, “Ever heard your name being cheered on by your favourite instructors during a class? It’s the best feeling in the world to motivate you further.”
As the MCO dragged on, the gyms invested in production equipment to match the quality of workout videos already in the virtual sphere.
Babel began focusing more heavily on turning its marketing team into an in-house production crew. By offering HD virtual classes for free via Zoom, they saw an average of 150 participants joining per day.
But Members Needed Equipment To Recreate The Experience
All 4 gyms we interviewed also began coupling their online classes with equipment rentals.
“Following feedback from our members throughout the previous closures, one of the major concerns about not being able to partake in worthwhile training at home was due to the lack of equipment,” said Billy.
But renting out heavy items like Spin Cycles and Standing Boxing Bags came with logistics issues when transporting them to renters’ homes.
Thus, specific partners offering low delivery fees were selected for this duty. For example, FLYPROJECT partnered with Grab and Lalamove to help fulfill their deliveries on demand.
TRIBE went the extra mile by borrowing pick-up trucks from friends and staff to complete multiple deliveries themselves. This helped save the company’s cost for logistics.
Level Up Fitness (LUF) chose to rent only easy-to-transport equipment like Body Pump Bars to accompany free livestreams.
On Babel’s end, to ensure that equipment setups were hassle-free for members, staff would follow up to advise them on installation and care.
But even with these virtual classes and equipment rentals, the amount of revenue generated did little to impact all 4 gyms’ current financial shortfalls.
Speaking Of Cash Flow…
Each of these gyms was quick to negotiate their rent with landlords and freeze membership fees the moment MCO started.
While none of them had to lay off full-time staff, the others took different drastic measures.
FLYPROJECT continued paying full-time staff, albeit with pay cuts during the first MCO. Come MCO 2.0, the company’s cash reserves had mostly dried up and unpaid leaves had to be employed. It was a regrettable decision to Kenny Choong, but had to be done.
He’s so far applied for the Prihatin loan of RM500k to ease cash flow needs. Their shareholders have also committed to supporting their losses until normalcy has returned.
“The home workout packages and bike rentals do help ease the cash flow with minor income, but it isn’t anywhere close to supporting our losses,” said he said. And the same was felt by the other 3 gyms too.
When the 3rd month of 2020’s MCO approached, LUF was in a dire cash position. CEO Kenny Sia pleaded for members to pay their membership fees, which kept them afloat for 2 extra months.
LUF was probably one of the hardest-hit gym chains as the majority of their 13 outlets are based in East Malaysia. Their gyms in Kota Kinabalu had been ordered to shut 3 times now.
As Sarawak outlets contribute to 70% of the gym’s revenue, its 9 operational ones there have been able to support the others throughout MCO 2.0.
Reflecting on his struggles during 2020’s MCO that we previously covered in detail, Kenny Sia shared, “I’m happy to say that compared to our previous two shutdowns, we are a bit better prepared now in terms of supporting our staff, and thus are able to sustain the burn rate for another month.”
Virtual Classes Should Be Complementary To Physical Ones
In a post-pandemic fitness life, consumer behaviour will clearly change. TRIBE is not counting on returning to business as usual, but starting a new norm.
We envision gyms will be subscribing to what we call a hybrid model (working out in the studio and online). All of the at-home fitness consumers who have already invested in home equipment are going nowhere, and we think it’s because they have gotten used to the experience.
Sarah Chong, Marketing Manager of TRIBE.
This sentiment was shared by Billy too. “Virtual services aren’t a replacement for the real thing, but a complementary enhancement that will allow us to provide a more holistic and personal experience to each of our members.”
More than ever, these gyms will need to dial up their marketing efforts to recruit new consumers and increase community engagement efforts.
Bouncing back will come down to consumer spending. With a big part of the economy hit, it will take some time for consumers to come back in full force.
We will continue doing our best to serve the community and hope there isn’t MCO 3.0 or another pandemic in the future. We hope our colleagues in the industry ride through this pandemic with us, as health and wellness are critical to the well-being of our population.
Kenny Choong, CEO of FLYPROJECT.
- You can read about other MCO related topics here.
Featured Image Credit: TRIBE Boxing Studio
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