There are nine million spin bikes in SG
A year and a bit ago I wrote a post saying that the large number of boutique spin studios in Singapore was unsustainable. I argued that demand was artificially high due to pandemic effects (people couldn’t spend money on travel and eating out so they spent it on fitness), and that when things opened up demand would decrease — those studios unable to cover their costs, especially those related to rent, would have to close.
In this article I look at what has happened since then. In short, I wasn’t as right as I thought I would be — there hasn’t been a mass drop in the number of studios, but there have been a lot of changes that are probably provoked by an effort to increase efficiency.
The numbers
When I wrote the article I calculated there were roughly 26 studios across Singapore — as a reminder, and by comparison, Hong Kong, an Asian city with a comparable population size and GDP/capita, had 1. In the year since, the number actually grew to 28 — some new brands like Spyn and Move Fitness came onboard. Currently the number sits at 25. As a general number, this doesn’t provide much support to my predictions, but we need to look a little bit deeper at the movement of these studios.
A few studios ended up closing altogether after August 2022, with some even making headlines as they disappeared overnight. Thus we said goodbye to Studio X, RS Cycle, Move Fitness, and Spyn. Cru opened a new studio but closed it down within a year. Revolution opened in Bugis and Suntec (through a franchise) and closed its OG studio on Cecil Street.
Additionally, Revel Cycle and Popsicle’s flagship studio were acquired by Minmed, a young medical group focusing on tele-health, health screening, and health promotion. These acquisitions are part of Minmed’s larger strategy to merge health screenings with preventative healthcare — they have bought a number of other fitness studios around the island. This consolidation makes sense — it’s a great way to reduce a lot of overhead, and on paper Minmed can funnel a part of its patients to the studios, which, frankly, Popsicle and Revel were in dire need of towards the end. For Minmed it’s a way to increase average revenue per user. For the studios, it’s a new and steady lifeline, though I am not sure we can call them boutique anymore.
But there has also been a consolidation in the industry. Absolute (4), Revolution (4), and Minmed (3) account for nearly half of all the studios in Singapore. This consolidation increases efficiency. For example, you get more bang for your buck from your marketing team, who with similar efforts are doing the work of multiple studios instead of one. This gives these large brands an advantage over the smaller ones, an advantage which may make a difference in the future.
There might be something to the rent thing
Another thing that the numbers don’t show is a large movement of studios within Singapore. Many of the studios still present have changed location. Revolution’s change from Cecil to Bugis is an example of this, but this is also true of Absolute, Ground Zero, and CRNK. Generally the movement has been away from the CBD and towards more residential areas. This HAD to happen. The number of studios concentrated in Tanjong Pagar was simply baffling.
In my previous article I wrote that in the long term all short term fixed costs, such as rent, become variable costs (Econ 101). I thought this would force underperforming studios to shut down, but actually what ended up happening was that studios moved elsewhere, to places where the leases are presumably cheaper.
One more thing on this: I also predicted a higher revenue per square foot in the remaining studios. This is more anecdotal, but the new studios have done away with large waiting areas and are now basically a reception, small changing rooms, and the actual studio — efficiency is the name of the game.
What’s next?
25 studios still feels like a lot of studios for Singapore, especially when you consider that many gyms also provide spin classes — I have not counted these in my analysis, as I simply look at boutique studios. I think this story is not over, and I suspect we will continue to see some important changes. Efficiency will continue to be the driving factor, though we may see it come up in two different ways.
I still think we are going to see fewer studios over time. At the very least, we will see fewer brands as they either shut down or get acquired by the Minmeds out there. Now that the dust in Tanjong Pagar is settling, there is an interesting battle happening out in Katong, where there are 4 studios (Absolute, Popsicle, CRNK, and Oompf) all within 5 minutes of each other. I would expect to see those with greater operational efficiency (i.e. Absolute) to still be around a year from now. Will Minmed acquire the remaining Popsicle?
The studios that will survive for now are the ones that are in residential areas that are not yet interesting enough for the rest - places like Lumi in Hougang or Algorhythm in Beauty World (Holland Village/One North area could be next, and Absolute has already moved there) — or studios that offer different things on top of spinning, such as boxing, HIIT, or yoga/pilates. This is really just a variation of my argument re: maximizing usage of rent space. But if the Minmed strategy proves successful in the places they are attacking now, even they might be ripe targets for acquisition.
