The pandemic has shown the importance of staying fit and healthy. Regardless of what COVID-19 has to do with Malaysian gyms, the fitness industry could have a bright future. According to Billy Waters, general manager of Babel Fit.
Malaysian gyms have seen great success after shutting down physical outlets during the lockdown. But now they have learned that fitness is not only present in the four walls of brick and mortar.
So we spoke to 4 local gyms to find out what lessons they have learned to survive a pandemic since going through the MCO 2020.
Fitness is a social activity that is motivated by the community
FLYPROJECT's HIIT classes at the gym / Image credit: FLYPROJECT
YouTube is an endless library for everyone to learn. As a result, these gyms needed to design courses that could convince members and the public to choose them over social media content.
It certainly helps if your brand is built on a community-based mindset. This had a positive effect on the KL fitness studios TRIBE and FLYPROJECT.
The TRIBE brand is based on the relationship between its trainers and members. Livestream courses capitalized on this community spirit and were an opportunity to recreate the personal experience online.
The experiences from the FLYPROJECT live streams cannot be found even after YouTube videos. CEO Kenny Choong said, “Have you ever heard your name being cheered on by your favorite teachers during a class? Keeping you motivated is the best feeling in the world. "
As the MCO dragged on, the gyms invested in production equipment to match the quality of the workout videos that are already in the virtual realm.
Babel focused more on transforming its marketing team into an in-house production team. By offering virtual HD courses free of charge via Zoom, an average of 150 participants per day were added.
But Members needed equipment to restore the experience
All 4 fitness studios we surveyed have also started to combine their online courses with equipment rental.
"Based on feedback from our members during the previous closings, one of the main problems in not being able to attend rewarding home training sessions was the lack of equipment," said Billy.
However, renting out heavy items such as spin cycles and standing boxing bags created logistical problems when they were transported to tenants' homes.
Therefore, specific partners have been selected for this task who offer low delivery fees. For example, FLYPROJECT has partnered with Grab and Lalamove to fulfill their deliveries on demand.
Get a 15% discount on your first trial version when you rent a stand-up bag with the code VULCAN15 / Photo credit: TRIBE
TRIBE went one step further and borrowed pick-ups from friends and employees in order to carry out several deliveries themselves. This helped reduce the company's logistics costs.
Level Up Fitness (LUF) has chosen to only rent equipment that is easy to transport, such as body pump bars, to accompany free live streams.
To ensure that the device settings were trouble-free for the members, the staff advised the employees on the installation and maintenance.
But even with these virtual classes and equipment rentals, the amount of revenue generated has little impact on the current financial bottlenecks of all four gyms.
Speaking of cash flow …
Each of these gyms quickly negotiated their rent with landlords and froze membership fees once MCO started.
While none of them had to lay off full-time workers, the others took drastic measures.
FLYPROJECT continued to pay full-time employees, but with wage cuts during the first MCO. With MCO 2.0, the company's cash reserves had largely dried up and unpaid sheets had to be used. It was an unfortunate decision for Kenny Choong, but one that had to be made.
So far, he has applied for the Prihatin loan of RM 500,000 to reduce cash flow needs. Your shareholders have also pledged to support their losses until normality returns.
"While the home exercise packages and bike rentals help simplify low-income cash flow, it is nowhere near covering our losses," he said. And the other three gyms felt the same way.
Excerpts from the letter from FLYPROJECT to your landlord / Photo credits: FLYPROJECT
As the 3rd month 2020 MCO approached, LUF was in poor liquidity. CEO Kenny Sia asked members to pay their membership dues, which kept them afloat for two more months.
LUF was probably one of the hardest hit fitness chains as the majority of its 13 branches are in east Malaysia. Their gyms in Kota Kinabalu had now closed three times.
Since the Sarawak branches account for 70% of the gym's turnover, the 9 branches there were able to support the others in MCO 2.0.
Kenny Sia reflected on his struggles during the MCO in 2020, which we had previously covered in detail: “I am happy to say that compared to our two previous shutdowns, we are now a little better prepared for the support of our employees and this are also able to maintain the burn rate for another month. "
Virtual classes should be complementary to physical classes
In a post-pandemic fitness life, consumer behavior will change significantly. TRIBE does not expect to return to business as usual, but to start a new norm.
We assume that fitness studios will subscribe to a so-called hybrid model (training in the studio and online). All of the home fitness consumers who have already invested in home equipment are going nowhere, and we believe this is because they got used to the experience.
Sarah Chong, Marketing Manager at TRIBE.
This feeling was shared by Billy too. "Virtual services are not a substitute for the real thing, but a complementary enhancement that enables us to offer each of our members a more holistic and personal experience."
More than ever, these gyms need to step up their marketing efforts to attract new consumers and increase community engagement.
The rebound will be due to consumer spending. With much of the economy being hit, it will be some time before consumers come back into full force.
We will continue to do our best to serve the community and hope there is no MCO 3.0 or any other pandemic in the future. We hope our colleagues in the industry will ride us through this pandemic as health and wellbeing are vital to the wellbeing of our people.
Kenny Choong, CEO of FLYPROJECT.
- Further MCO-related topics can be found here.
Selected image source: TRIBE Boxing Studio