In recent years, the global Spa and beauty industry has witnessed tremendous growth – over 30% annual increase. What changes has China’s Spa industry undergone in the past 15 years? By Fifi Kao
Just one year before the foundation of SpaChina Magazine in 2004, the first Spa opened in Shanghai. Nowadays all real estate owners, including hospitality people, around the country realize the influence of Spa and therefore build Spa into all high-level clubs and hotels. As more and more people love to go to Spa, almost all five-star hotels are now equipped with this facility to meet the needs of their high-end guests and to represent their own quality standards. Fifteen years have passed, and Spa is still a rising element of the economy with continual rapid growth.
Recent data show that the Spa industry in the United States is undergoing the fastest growth of all the leisure and tourism industries, while in Europe, more than 20 million people go to Spa every year. According to ISPA, Spa has become the fourth-biggest leisure industry in the U.S., generating even more profit than theme parks and cinemas. In China, the wellness and beauty economy has been increasing by an average of 18% each year, a much higher rate than the growth of GDP. The “Wellness Economy” has become the fifth consumer driver in China, following real estate, automobiles, e-commerce and tourism.
In the global market, there is a rise in male Spa goers, now occupying 39% of total spa-goers. However, in China, including Taiwan, and East Asia including Japan and South Korea, female guests are still the mainstream, contributing 89% of the total. Guests’ average age in the globe Spa market is 41 years of age, while the figure in Asia in 38. China particularly sees a younger tendency. People who seek the comfort of body and mind are much willing to pay $100 for 1-to-2 hour beauty or Spa treatments.
In May 2017, China’s National Health and Family Planning Commission, National Development and Reform Commission, National Ministry of Finance, National Tourism Administration and State Administration of Traditional Chinese Medicine jointly released the Guidance for the Development of Health Tourism, which advocates the creation of diverse health tourism products relying on featured resources – nature, culture, ecology and location, and important travel destinations, and developing a health tourism industrial chain by focusing on a series of key fields including high-end medicine, specialized subjects, recovery and rehabilitation, and combination of treatment and convalescence with the support of medical establishments, health management institutes, rehabilitation centers and wellness retreats. The Chinese government has recognized the health industry as a key sector for the stable development of the nation’s country. Undoubtedly, health has become a necessity for Chinese people.
As health becomes a must, beauty, Spa and wellness start to draw more and more attention. So in this context, what changes has Spa undergone in China?
Spa goers become younger
Just like 15 years ago when it first came to people’s attention, Spa is still a symbol of high quality life. But its forms and the age of guests have changed. Spa has now become a charge station for the body and the mind, covering appearance polishing, body shape improvement, character and mentality cultivation, energy refueling and stress alleviation. It is also a way to demonstrate the lifestyle of modern people.
Meanwhile, the main drivers have changed. Fifteen years ago, the mainstream clients were people born in the 1960s and 1970s, while now most Spa goers are products of the 1980s, 1990s or even 2000s. These modern young people exhibit different consumption habits and health needs compared to their counterparts 15 years ago. Today’s consumers emphasize the overall experience and seek both the time and space for freedom and entertainment. They are the main players of the We-Media world, and they are keen to share the facilities, hardware and treatment details they have seen and experienced with others via social media, and by so doing celebrating their own lifestyle.
They are willing to pay a lot for “more beauty, uniqueness and self-expression”. In other words, they aren’t really pursuing health; instead, they are more interested in appearing perfect, having unique experiences and showing off their own personalities.
Social platforms gather birds of a feather together
With its diverse functions, Spa has attracted different types of people, ranging from ordinary workers to high net-worth individuals with treatments priced at no more than 100 yuan to over ten thousand yuan. Finally, birds of a feather still flock together. Guests who share the same goals of health, beauty and mental cultivation, who recognize the value of certain Spa operators and who follow the same brands, will go to the same types of Spas. Such energy pooling will play a vital role in the future development of the Spa industry and therefore serve to differentiate the services and offerings among the Spas. It is the consequence of market competition.
Higher demand for products, technology and services
Perhaps you have already discovered that the layout of China’s department stores has changed in during the past couple of years. The main sections of stores are now: international supermarkets offering high quality foods and daily products, F&B, cinemas, family time facilities, child education, and wellness & beauty. Experiential consumption is now the mainstream.
As Spa has now insinuated itself into people’s daily life, there are sometimes more than one Spa on the same level of the malls. Obviously, the competition has become much fiercer. Moreover, today’s guests are more mature and sensible in terms of their consumption attitudes. Therefore, only those who can pass the test of the market will be left standing. Spas with inadequate services, techniques and products will be knocked out.
Spas offer a wider range of services
A healthy body, good appearance, bright and clean skin and perfect body shape are what Chinese customers are always after. Currently, in China’s Spas alone, there is a broad array of services on offer including hydrotherapy, thalassotherapy, aromatherapy, thermotherapy, music therapy, de-stress, detoxing, color therapy, halo therapy, skin management, weight management, natural hot spring and more. Spas providing international-level equipment and products, personal beauty and fitness programs, and health consultations, are becoming increasingly popular. Nowadays, people are placing Spa treatments on their routine schedules, and regard them as important as a good diet and regular exercise.
Biotechnology skincare enjoys popularity
Beauty programs featuring high technology and equipment now make up over 70% of the total offerings in city Spas and in beauty salons overseas. According to preliminary research by SpaChina, such programs make up over 40% of offerings in China’s Spas and salons as well. More and more people are beginning to have the same requirements for Spas as for beauty salons, meaning a wider range of services, especially anti-aging treatments and biotechnology skincare. International Spa brands have been launching highly effective anti-aging products and non-invasive high-tech equipment treatments. The best sellers at city Spas and beauty salons currently are hyaluronic acid injections and minute bubble (AHA, BHA) cleansing treatments that are based on biotechnology. Although many beauty salons perform violations using invasive equipment, there is no doubt that high-tech treatments have become a trend, and high-tech equipment stake its due sh the market.
Chains’ management of city Spas and beauty salons
From the perspective of market share, chain Spas and beauty salons have done perfectly well during the past two to three years in China while hotel Spas are not doing so satisfactorily. China’s market has huge potential and thus attracts large flows of foreign investment to open regular chain beauty salons or franchise chain stores. French brand SIYANLI entered the China market in 1996 and then expanded from Shanghai to Beijing, Chengdu, Shenzhen and Guangzhou. The German brand Beauty Farm has also strongly expanded the number of its chain stores in China. With time, however, a centralization of chain brands will occur. There are tens of thousands beauty salons and city Spas in China while chain stores occupy only 10% of the market. In Europe and America, however, the proportion of chain stores has reached 50%.
Spa product and equipment suppliers update their services
If a Spa doesn’t offer high-tech and highly effective products or equipment, it will be regarded as inferior. So the next five years will be the golden age for quality Spa product and equipment suppliers. Moreover, these suppliers will also carry out business and professional training, marketing and promoting activities, and some may even provide franchising programs, treatments collaboration, financial diagnosis and management planning.
The future of Spa industry
The Spa in the future will by no means simply be several treatment rooms. There will be more and more high-tech equipment and products, as well as VR experiences. Some fitness companies have already integrated VR into their equipment to make the work-out more entertaining. This can be also applied to treatment rooms, to show different scenes and effects with VR technology.
With the development of technology, Spa treatments will deliver more amazing effects, even catching up with that of medical treatments. But at the same time, there will be a surplus of medi-beauty in the next five years. Consequently, traditional treatments which emphasize body and soul recovery will return to the stage, which may cover the concepts of energy, magnetic fields, heart and soul, universe, self-healing and self-capacity stimulation. The Spa in the future should be able to offer holistic experiences integrating yoga, aerobics, brain awakening, healthy diets and personalized fitness…
Fewer staff and more equipment is the trend, which will largely improve operational efficiency. But staff will not be completely replaced. Staff and equipment will reach a golden balance where customers can both feel the warmth of manual manipulation and the effects and efficiency of equipment.