TOKYO – An increasingly popular gym franchise in Japan has membership costs of around US$20 (S$26) a month, offering teeth whitening, photo booths and – almost as an afterthought – exercise equipment.
The patchwork concept is called ChocoZap, run by Rizap Group, a billion-dollar fitness company that made its name in high-end personal training. In less than two years, the sub-brand has tapped into a casual and frugal gym user base. It now has more than 1,500 locations and 1.2 million-plus customers.
Typical memberships in Japan’s 278.4 billion yen (S$2.5 billion) gym industry are on a par with those in the UK or the US, at around US$60 to US$80 a month, but ChocoZap has taken the concept and adapted it for a wider base, seeking to draw casual users willing to sign up at a lower price.
That has made the business a major player in the sector, which saw a 2.2 per cent rise in the number of customers to 2.8 million in 2023.
The oddball gyms – some of which also have gel manicure equipment – were created as an experiment during the coronavirus pandemic when Rizap’s core business of personalised training was suffering.
As people spend more time working flexible hours and at home, they are also seeking out more enriching experiences while keeping fit. Most recently, some locations even began offering CT scans.
“We decided to incorporate elements of convenience stores – open 24 hours, in convenient locations, and frequently change the offerings,” said Mr Takayuki Suzuki, president of Rizap Technologies, the subsidiary involved in developing the ChocoZap concept.
The first part of the franchise’s name, “choco”, has nothing to do with cocoa beans, but comes from the Japanese word chokotto, or “a little bit”.
Despite their offerings, the gyms are designed to save on costs: there are no showers because most customers stop by on their way home, or pop in for light exercise. ChocoZap constantly adds and removes services depending on how well they do with users.
A standard ChocoZap gym is small and unmanned, which has made it easy for Rizap to deploy locations amid a chronic labour shortage.
Members access the gyms using a smartphone app. Inside, they can find gym equipment and use the various offerings, which usually need to be booked in advance. The colour scheme is minimalist white and yellow, making the gyms seem cozier than conventional ones.
“They’ve managed it well to make it efficient,” said Mr Kyoichiro Shigemura, an analyst at Nomura Securities.
“The business model is hard to pursue as economy of scale is needed to make a profit, so anyone who attempts to challenge them will face two to three years of losses.”
Rizap went public in 2006, and is known for its TV advertisements showing Japanese celebrities becoming slimmer and fitter in a matter of months. Its intense gym programme can cost as much as 600,000 yen for two months of instruction but have been a hit, helping the company reach a current market value of around 140 billion yen.
ChocoZap reached profitability on a monthly basis in late 2023 and expects to be profitable in 2024. A cleaning service comes through twice a week, and the company has also experimented with membership fee discounts if customers are willing to help with cleaning.
To keep costs down, Rizap employees visit the China Import and Export Fair in Guangzhou every year to see what kinds of funky and fun products are available. Some of the equipment introduced includes single karaoke boxes and massage chairs.
Mr Suzuki said the company realised that on-site staff are not of fundamental value in gyms, and “lowering barriers to visit as much as possible unlocks demand”.
ChocoZap aims to more than double its number of locations to 3,000 by 2027, and eventually reach 10,000 – on the same scale as convenience-store chains.
There are plans to add more services and machines, and also expand overseas. It already has about a dozen locations overseas, mostly in China, and one in Santa Monica.
“I keep the membership for the karaoke machine,” said Ms Miwa, a part-time worker in her 40s who initially signed up to exercise. “The only complaint I have is how the karaoke box isn’t perfectly soundproof.” BLOOMBERG
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