How ClassPass is reinventing the fitness industry

Paula Munteanu

24 Feb 2020

My team knows I love going to the gym. And over the years I’ve tried a fair few of them – from the swanky Lloyds and Virgin Active to the budget EasyGym and Gym Group. But regardless of the price, I couldn’t shake one nagging feeling. Boredom. I was bored of the same old treadmills, machines, and half-hearted HIIT sessions. Even classes would become dull after the third sesh. So imagine my delight when boutique gyms started popping up across London. The rise of exciting, specialist gyms such as Triyoga, F45 and Barry’s Bootcamp – is the result of thousands of people like me, bored of their regular gym routine, joining together to make multi gym memberships a reality. Today there are over 7,000 gyms across the UK and the market is only set to grow. However, even the most avid gym-goer is going to be limited by their budget. Three specialist classes a week quickly adds up to more than a premium monthly gym membership. You can also flip this problem over. How are specialist gyms supposed to attract a steady stream of customers, (who are already less than loyal to their existing gyms!) and thrive amid such heavy competition? This gap in the market was spotted by Payal Kadakia, who – after spending hours trying to find a ballet class in her local area – decided to create ClassPass. Her mantra? Exercising doesn’t have to be boring and mundane, and fitness classes are a fun way of finding new passions. Payal quickly realised there is technological gap in connecting boutique gyms that offer great classes with their core audience – time poor millennials that don’t like to commit. Initially known as Classtivity, Classpass makes money by selling monthly subscriptions. This allow customers to exercise at various boutique fitness studios, rather than being confined to the classes available at one local gym. Unlike other gyms, ClassPass lets users choose from a wide range of classes and explore what different facilities have to offer. Booking classes on a “pay-as-you-go” model sounds like a great idea for us, the consumers. But the trouble is, operating a 2-sided marketplace, ClassPass would end up failing to sustain itself at scale with healthy margins without the continuous injection of additional capital. Just look at what happened to Groupon. The company also faced criticism for undercutting the business model of fitness clubs with some people describing it as a "middleman" between consumers and health clubs. I guess time will show whether Classpass is the next unicorn or the next bust. But one thing is for sure: it helps meet the needs of both sides of the fitness marketplace. More importantly, it removes a potential excuse when I’m trying to get out of going to the gym. Now at least it’s easy for me to pick between an hour of ChromaYoga, a cycling session with Digme or, maybe, spending an evening on the sofa 😊 Photo Credit: Anupam Mahapatra