ClassPass deploys war chest for Singapore market grab


THE rivalry among fitness class booking apps here has just kicked up a notch, with New York-based ClassPass making its debut in Singapore on Tuesday, two weeks after announcing it had raised a fresh US$85 million war chest backed by Temasek Holdings.

ClassPass wants to be the world's "Netflix of studio fitness" and has partnered with 21 studios here to help subscribers find and book workout classes ranging from yoga to boxing. Other startups here with similar ambitions include GuavaPass, KFit and ActivPass.

To grab market share, ClassPass is offering new subscribers free credits that they can use to attend classes for free over a two-month period. Singapore is ClassPass's first market in Asia hence the "biggest launch promotion ever", chief executive Fritz Lanman said.

So far, none of the fitness pass apps here are profitable except for ActivPass. But ClassPass believes it has arrived at a sustainable business model after years of iteration.

In 2013, ClassPass became the first aggregator app in the fragmented boutique fitness studio industry to offer gym rats a flat fee for unlimited classes, while helping studios make money from excess capacity. Its popularity spawned a number of copycat startups, including in Singapore.

But that old model was "messed up", Mr Lanman told The Business Times: "The reason it's messed up is because when you make all of your money from breakage, when you charge a subscription and you only make money when people aren't using their passes, you're voting against people working out."

ClassPass switched to a points-based system nine months ago, in which subscribers buy credits that are used to book classes. Studios open up more of the popular slots to ClassPass users since they have the flexibility to charge differently for classes held during peak hours, but that also means that users may have to pay full price for the most popular classes.

Rival GuavaPass, headquartered in Singapore where it has partnered over 200 studios, still runs on the original model where subscribers can pay a flat fee for unlimited classes. GuavaPass pays the studios a fee every time a customer attends a class.

The only limit users face is three visits per studio each month.

Co-founders Jeffrey Liu and Rob Pachter told BT that they have a plan in place to make this model sustainable, and that they offer other value-added services as well.

For example, they are able to use the data they collect to help studios optimise their class scheduling, they said. GuavaPass is live in 12 markets in Asia and the Middle East.

A third rival, KFit, has also scrapped unlimited classes and expanded beyond the fitness realm to create Fave, a discovery platform and payments app that offers discounts and cashbacks on purchases made from cafes, restaurants, massage parlours and various other businesses.

Ng Aik-Phong, Singapore managing director of Malaysia-headquartered Fave, said the low retention rate for fitness pass subscriptions prompted the team's shift in strategy.

He said: "People are excited about working out at the beginning of the year and then interest fizzles. That's why we introduced pay-as-you-go classes and with Fave, we can sell trial packages as deals and also cross-sell between different categories of users."

KFit is in the Philippines, Malaysia, Singapore and Hong Kong. Mr Ng said of the competition: "We are not concerned from a business perspective, the market is expanding."

The Asia-Pacific fitness market, including big cities in China and India, is a US$16.8 billion opportunity with 22 million health club members, according to Deloitte.

In Singapore, ActivPass estimates the market is between S$200 million and S$300 million, based on population size and average spend per customer.