The dominant narrative about China’s growth (“the only major economy currently growing”) is misleading. China’s GDP rose by 6.5% in Q4 2020 only because the authorities decided it would. In their bid to reach this target, China’s government has moved in areas that previously, for the purpose of rebalancing growth, they were keen to abandon: industrial production, real estate and net exports. Meanwhile, consumption—which the authorities wanted to expand—is still lagging. This is not sustainable, and excess lending (particularly local government debt) must now be reined in.

There is an area in which Chinese consumption is booming, not lagging: wellness! To find proof that the trend is structural and strong, look no further than the recent acquisition of the workout app, Keep. Softbank Group just led a funding round of $360 million for this digital fitness solution whose usage has exploded at a time when COVID keeps gyms and fitness clubs closed.

Keep is valued at around $2 billion. It has more than 300 million registered users and an average number of monthly active users of 38 million! In China, fitness was a $4.4 billion business in 2015. At the end of 2020, it has reached $11.4 billion—an increase of 160% over just five years. As we have said in previous posts, future growth in wellness will be everywhere, but it will be stronger in Asia than anywhere else.

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