How Hong Kong Responds to Fitness Clubs Essay

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Fitness Industry in Hong Kong

Hong Kong is a densely populated, coastal city in Asia, where both Eastern and Western cultures meet. In this city-state of 7 million persons, the potential for the fitness industry (fitness clubs) to find consumer demand is evident in the government's recent emphasis on health and fitness as well as the entertainment industry's usage of body image to convey an impulse among consumers to mimic what they see. At the same time, Hong Kong has a distinctly Asian desire for fitness workouts that are more dance-oriented than in the West. Choreography is a big draw for Hong Kong fitness club users and the more complex the choreography, the more likely the draw. Still, fitness clubs also appeal to older consumers who want to belong to a club and who seek to achieve some activity in their lives, as there is limited open space in Hong Kong and fitness clubs offer young and old the option of working out in the city. This study examines the potential of fitness industry in Hong Kong via survey and finds that for the industry to succeed it should study the culture of Hong Kong and provide its people what they demand in terms of an appealing fitness club with quality service.

Chapter 1

1.1 Business Research Topic and Significance

The topic chosen of this research project is the potential of the fitness industry in Hong Kong. The significance of this topic is found in the fact that Hong Kong is a service economy -- the tertiary sector of the three sector economic model. It is one of the most prominent financial centers in the world and one of the most densely populated city-states as well. However, with more than 7 million people residing in its community of coastal skyscrapers, Hong Kong boasts a wide range of activity among both "haves" and "have-nots," with clear evidence of economic disparity in the classes of Hong Kong life. The question this paper poses is whether there is potential for the fitness industry (a distinctly Western industry) to find traction in Hong Kong. Because Hong Kong is multi-cultural, with most inhabitants being multi-lingual, the idea of this Western industry taking root in Hong Kong is not far-fetched. For those who can afford it, fitness clubs offer the opportunity for the Western workout culture to be enjoyed via an Asian emphasis on choreography (Vassallo, 2010).

1.2 Brief Background

A brief history of fitness in Hong Kong shows that since the 1980s, more than 100 research studies have been conducted in Hong Kong to determine the health and fitness level of its residents (Fu, Nie, and Tong, 2004, p. 77). Hong Kong's Sport Community and Department of Health as well as a number of foundations have been instrumental in supporting and assessing health and fitness research over these years (Fu, Nie and Tong, 2004, p. 77), while Hong Kong's government has taken a specific interest in promoting healthy living and activity. Hong Kong's appreciation for Western culture along with the governmental support of fitness has allowed the fitness industry to find traction in the coastal metropolis. Today, expatriates from the West are routinely employed in the service industry because of the high wages young ex-pats can earn and the exotic opportunity that Hong Kong provides -- and this is especially true in the fitness industry (Vasallo, 2010). High wages are off-set, however, by the high cost of living: the average cost of blue jeans in Hong Kong is more than 125 USD while a cup of coffee lurks near 8 USD (McCafferty, 2016). Thus, Hong Kong is a city where fortunes are made and lost and where dreams are put to the test. This reality is especially clear in the rising (and sometimes falling) fitness industry in Hong Kong (Yeung, 2016). Taking into account the recent California Fitness scandal in which the fitness chain closed its doors just months after opening, this business research paper will discuss the potential of the fitness industry in Hong Kong.

In understanding the potential of the fitness industry in Hong Kong, it is vital to understand the culture of Hong Kong. As Mattel proved with its entry into China in the past decade, it pays to research the background and culture of the country that a firm is seeking to penetrate (Marquis, Yang, 2014). The fitness industry in Hong Kong has found a better reception, however, than Mattel did upon entering China -- that is because in Hong Kong the ground was already prepared for the fitness culture by way of Hong Kong's own cultural emphasis on perceptions of fat, beauty and fitness (Lee, 1999).

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Having cultural roots in both Western and Eastern systems (Hong Kong was a British colony throughout most of the 20th century), Hong Kong has been situated in a manner that is accepting of both East and West ideas.

Still, Hong Kong's health and fitness culture is nowhere near as intensive as it has been in the West, which saw the rise of the "fitness craze" in the 20th century -- touched by everything from fashion to food to politics to lifestyle to body image (Tavel, 2013). As Adab and Macfarlane (1998) showed in their late 20th century study on exercise and health in Hong Kong, "in Hong Kong, 59% of all adults lead a fairly sedentary lifestyle and only one in three exercise at levels that are thought to offer significant health benefits" (p. 389). In other words, heading into the 21st century, Hong Kong was well behind the West in terms of orientation towards fitness as a substantial industry (reflected in actual physical activity). Nonetheless, Hong Kong began to promote in conjunction with research studies a fitness culture in which sports, activity and fitness culture figured predominantly (Fu, Hao, 20002). Thus, the relevant literature shows that by the end of the 20th and beginning of the 21st century, Hong Kong was making a conscientious effort to address health and fitness levels in its society -- and thus situating itself to be embracive of the fitness industry. To some extent, the fitness industry has responded (HKTDC, 2015) -- but at the same time firms like J.V. Fitness, owner of California Fitness, mYoga and LEAP (all of which suspended operations in 2016), have failed to meet expectations and through what appears to be severe mismanagement of funds and a lack of quality service brought negative attention to the sector in spectacular fashion (Yuen, 2016).

The questions this paper will pose are: 1) Is there potential for the fitness industry to find traction in Hong Kong? and 2) What does the experience of individuals "on the ground" (i.e., engaged in the fitness industry in Hong Kong) reveal about the likelihood of the fitness industry in Hong Kong having considerable duration? In other words, is the fitness industry one that meshes well with Hong Kong culture? Considering that part of Hong Kong's Eastern culture is responsible for the popularity of its martial arts and dance in culture, there is reason to believe that the fitness industry -- given the right orientation -- can find traction and considerable duration in Hong Kong. As Mattel learned in China, when carving out a niche it is essential that firms understand the culture of the market they are penetrating and adapt in order to meet the needs of the consumer in that market. If firms within the fitness industry in Hong Kong successfully adapt to Hong Kong culture and meet the needs of the Hong Kong consumer, the industry should fare well.

1.3 Research Methodology

This study will use the survey methodology. The sample will consist of individuals who live in Hong Kong. Not only will the sample include those who either work in or are consumers of the fitness industry in Hong Kong, but also it will include individuals who are not members of fitness clubs. Those who are part of the fitness industry will likely range from fitness instructors to managers to personal trainers to fitness membership subscription sales agents to members of fitness clubs. The targeted sample size will consist of 100 individuals. The survey will be conducted online using social media -- Facebook and Twitter -- to attract individuals to the survey. Participants will be selected by targeting fitness clubs and asking stakeholders to participate in the survey online. Likewise, online "hangouts" where residents of Hong Kong engage will be used to target non-stakeholders for their impressions of the fitness industry. The survey data will be analyzed by using the Likert scale of measurement as well as through qualitative assessment for the open-ended question at the end of the survey. The questions asked in the survey will consist of queries designed to approximate the stability and acceptance of fitness clubs in Hong Kong as well as individuals' appreciation for the fitness industry there. These answers will help to identify in quantifiable terms the extent to which the fitness industry in Hong Kong. Questions will include:….....

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