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In Yoga Raises USD 7.5 Million To Fund Expansion

Jul 19, 2018 by Rebecca Zhang
In Yoga Raises USD 7.5 Million To Fund Expansion

In Yoga, a Shanghai-based yoga chain studio received CNY 50 million (approximately USD 7.5 million) in Series A funding from Fortune Capital, a venture capital based in Shenzhen, to upgrade its intelligent management system and standardize its yoga classes in its run-up to further expansion.

The funding is one of the largest investments in the USD 6 billion yoga business in China.

The fitness brand hopes to use the funds to expand its business.

“In Yoga plans to open more than 300 stores all over China next,” said Li Wangqiu, founder and CEO of the startup.

Founded with an initial capital of CNY 5 million (approximately USD 746 thousand) in July 2015, In Yoga has since opened over 70 stores with a foothold in 13 major cities including Shanghai, Hangzhou, Wuhan and Changsha.

The income from membership fueled the rapid expansion of the startup.

Having at least 1,000 members, each store makes an operation revenue of more than CNY 5 million (approximately USD 746 thousand) annually, with around 30% profit margin, the company claims.

The managerial team of the company has positioned In Yoga as a high-end studio, targeting young white-collar females between 20 and 45.

In Yoga studios open strategically next door with Sweet Fitness, a mini gym run by the same mother company, sharing front desk and locker room to cut the cost.

About 30% of customers visit Sweet Fitness after practicing yoga.

All In Yoga stores are located in major business and real estates areas, rather than in residential compounds, a common choice for many of Yoga studios in China.

“It’s easier to attract customers with higher net worth and build our brand,” explained Du Ze, COO of In Yoga.

Currently, In Yoga has over 600 staff, including yoga coaches hired from India.

Yoga as a sport was introduced to Chinese public on TV by Wai Lana, a Yogi from Hong Kong in 1980s.

The discipline has become one of the most popular sports among young people, especially young women in the recent decade, creating a vast market.

The market size has reached about CNY 40 billion (approximately USD 6 billion), according to 2016 Yoga Consumption Whitepaper. The number of active yoga practitioners touched 10 million in 2016.

Investors turned their eyes on the yoga businesses since the last couple of years, with the market growing at 56.3% in 2016, the whitepaper added.

But none of the businesses have found dominance in the market so far, indicating both a tough competition as well as a big market potential.

Homeyoga, a major high-end yoga chain competitor of In Yoga, has opened around 150 stores in cities like Beijing and Shanghai after announcing it raised CNY 20 million (approximately USD 3 million) in pre-A round in January 2017.

Meanwhile, online yoga teaching websites and apps may look more appealing for investors because the idea reduces the labor and floor-rent cost significantly compared with traditional yoga studios.

Daily Yoga and Wake Yoga, two apps aiming to reinvent the exercise with Mobile Internet and new technologies, have raised CNY 60 million (approximately USD 9 million) and CNY 30 million (approximately USD 4.5 million) respectively in recent two years.

However, the slowing Chinese economy also raised concerns among investors about the market perspective of the fitness industry.

In May, the growth rate of the total retail sales of consumer goods was only 8.5%, hitting the ground since May 2003, according to National Bureau of Statistics.

With the end of economic boom, yoga businesses may experience a decline from two digits growth too, making the race in the market even harder.

Rebecca Zhang

Rebecca Zhang is a Washington DC-based journalist who focuses on fintech, e-commerce and online education. She can be reached at Rebecca_Zhang@hks18.harvard.edu

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