Would be curious what SSS are for competitors? Is them taking share or is the industry just doing so well given rapidly changing trends starting from a very low base
That’s a very fair point. One thing that gives us confidence is that the broader fitness market in Japan is expanding rapidly, not just FitEasy.
ChocoZap, for example, has opened nearly 2,000 locations in just a few years and invested aggressively to capture market share. Despite that massive rollout, FitEasy’s operating metrics have remained remarkably strong. To us, that suggests the two concepts are not directly competing for exactly the same customer.
In our view, ChocoZap has primarily disrupted the very low-end/basic 24/7 gym segment, while FitEasy has positioned itself as a more premium ecosystem at a still affordable price point. The concepts are quite different.
Looking at the numbers, even mature competitors such as Fast Fitness Japan were generally generating around 5–7% same-store membership growth, whereas FitEasy has consistently delivered roughly 12–16% over the same period. That suggests FitEasy has been taking share rather than simply benefiting from overall market growth.
Another important difference is profitability. ChocoZap prioritized rapid expansion and was heavily loss-making during its early rollout, while Fast Fitness Japan had to increase investment to defend its position, putting pressure on margins. Meanwhile, FitEasy has continued growing memberships, expanding margins, raising guidance, and increasing profitability despite both of those competitors investing aggressively.
Great writeup! Do you think low cost gyms pose any threat? I know Fit Easy's positioning is more 3rd place but the high growth low cost operators have consistently taken market share from mid-end or premium tiers in Europe and US (i.e. Bfit and Planet)
Great question. I actually touched on this in a few comments under the original write-up on X.
I think Japan is a bit different from Europe and the US. The low-cost segment is already growing very rapidly there as well, especially ChocoZap, which has been adding members at an incredible pace. However, in my view it has primarily taken share from the basic 24/7 gym model (companies like Fast Fitness Japan), rather than from FitEasy.
FitEasy sits in a different position. Membership is still only around $50/month, but the value proposition is much broader. Golf simulators, wellness, coworking, recovery areas, beauty services, etc. make it much closer to an ecosystem than a traditional gym. I think that differentiation is important.
I was worried about competitive pressure too, but after following the company for almost two years, the operating data simply hasn’t shown it. New clubs continue ramping well, same-store memberships keep growing even at locations that have been open for five years, and every monthly update continues to surprise us positively. We also heard from several people in Japan that many clubs are frequently very busy, sometimes even with queues for showers.
Could competition become stronger over time? Absolutely. That’s always a risk. But so far, the numbers suggest FitEasy is taking share rather than losing it. My current view is that ChocoZap may introduce many people to fitness for the first time, and some of those members eventually migrate to a higher-value offering like FitEasy as their needs evolve.
Of course, we’ll keep monitoring the monthly membership data closely. If those trends start changing, that would be one of the first signals that our thesis needs to be revisited.
Thanks! I know both companies and have looked into them before. I agree they appear cheaper and are also growing very quickly. However, I was never fully convinced that I had a real edge in understanding those businesses or predicting their long-term economics.
With FitEasy, I believe the risk/reward is more attractive, the business is more predictable, and I see lower execution risk and volatility. In my view, the other two businesses are more dependent on external factors, which makes them harder for me to underwrite with confidence.
I think you also shared your thesis on MFS before, so it’ll be interesting to see how it plays out. Wishing you the best of luck! There are many attractive and undervalued opportunities in the Japanese market.
Would be curious what SSS are for competitors? Is them taking share or is the industry just doing so well given rapidly changing trends starting from a very low base
That’s a very fair point. One thing that gives us confidence is that the broader fitness market in Japan is expanding rapidly, not just FitEasy.
ChocoZap, for example, has opened nearly 2,000 locations in just a few years and invested aggressively to capture market share. Despite that massive rollout, FitEasy’s operating metrics have remained remarkably strong. To us, that suggests the two concepts are not directly competing for exactly the same customer.
In our view, ChocoZap has primarily disrupted the very low-end/basic 24/7 gym segment, while FitEasy has positioned itself as a more premium ecosystem at a still affordable price point. The concepts are quite different.
Looking at the numbers, even mature competitors such as Fast Fitness Japan were generally generating around 5–7% same-store membership growth, whereas FitEasy has consistently delivered roughly 12–16% over the same period. That suggests FitEasy has been taking share rather than simply benefiting from overall market growth.
Another important difference is profitability. ChocoZap prioritized rapid expansion and was heavily loss-making during its early rollout, while Fast Fitness Japan had to increase investment to defend its position, putting pressure on margins. Meanwhile, FitEasy has continued growing memberships, expanding margins, raising guidance, and increasing profitability despite both of those competitors investing aggressively.
Great writeup! Do you think low cost gyms pose any threat? I know Fit Easy's positioning is more 3rd place but the high growth low cost operators have consistently taken market share from mid-end or premium tiers in Europe and US (i.e. Bfit and Planet)
Great question. I actually touched on this in a few comments under the original write-up on X.
I think Japan is a bit different from Europe and the US. The low-cost segment is already growing very rapidly there as well, especially ChocoZap, which has been adding members at an incredible pace. However, in my view it has primarily taken share from the basic 24/7 gym model (companies like Fast Fitness Japan), rather than from FitEasy.
FitEasy sits in a different position. Membership is still only around $50/month, but the value proposition is much broader. Golf simulators, wellness, coworking, recovery areas, beauty services, etc. make it much closer to an ecosystem than a traditional gym. I think that differentiation is important.
I was worried about competitive pressure too, but after following the company for almost two years, the operating data simply hasn’t shown it. New clubs continue ramping well, same-store memberships keep growing even at locations that have been open for five years, and every monthly update continues to surprise us positively. We also heard from several people in Japan that many clubs are frequently very busy, sometimes even with queues for showers.
Could competition become stronger over time? Absolutely. That’s always a risk. But so far, the numbers suggest FitEasy is taking share rather than losing it. My current view is that ChocoZap may introduce many people to fitness for the first time, and some of those members eventually migrate to a higher-value offering like FitEasy as their needs evolve.
Of course, we’ll keep monitoring the monthly membership data closely. If those trends start changing, that would be one of the first signals that our thesis needs to be revisited.
Jan
Thanks very helpful
Bit too expansive for Japan IMHO. Take a look at 4441.T and 196A.T
Thanks! I know both companies and have looked into them before. I agree they appear cheaper and are also growing very quickly. However, I was never fully convinced that I had a real edge in understanding those businesses or predicting their long-term economics.
With FitEasy, I believe the risk/reward is more attractive, the business is more predictable, and I see lower execution risk and volatility. In my view, the other two businesses are more dependent on external factors, which makes them harder for me to underwrite with confidence.
I think you also shared your thesis on MFS before, so it’ll be interesting to see how it plays out. Wishing you the best of luck! There are many attractive and undervalued opportunities in the Japanese market.
Jan