Business China

F o r t n i g h t ly repor t to manage r s o f C h i n a o p e r a t i o n s

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The Economist Intelligence Unit Limited 2006 Business China March 13th 2006 1
March 13th 2006
Vol XXXII, No. 6

Economy
There is little relief in sight
for China’s farmers
Pages 1-3

Energy
More power to China’s
policymakers?
Pages 3-4

Property
Shanghai’s residential and
office markets are heading
in opposite directions
Pages 4-6

Fitness
Cashing in on Chinese
yuppies’ yoga chic
Pages 6-7

Commentary
Why a roaring economy
produces so few profitable
companies in China
Page 12

Sections
What’s new
in your industry . . . . . . .8-9
Selected indicators . . . . . .9
Deal watch . . . . . . . . . . . .10
Regulatory watch . . . . . . .11

Property/Fitness
Limited supply
Long overshadowed by the rise of China, India—the
other Asian giant—is suddenly captivating everyone,
including the Chinese. Just ask overworked mainland
professionals who are looking for ways to relax
and stay fit, as well as a little spiritual sustenance. In
recent years these harried white-collar workers have
turned the ancient Indian practice of yoga into something
of a yuppie vogue in China’s big cities. Now, at
least one yoga devotee and savvy entrepreneur is
trying to build a business out of her hobby: meet Yin
Yan, a 40-year-old former publishing executive, who
presides over a growing chain of yoga centres and
franchises stretching across the country.
Ms Yin got the idea for YogiYoga Center when she
went to India on a three-week vacation in 2003.
Until then, she had enjoyed a varied and successful
media career. After receiving a doctorate in cinema
and a business degree in France, where she lived for
nearly a decade, Ms Yin worked as a reporter and
producer before being tapped as China-based editorial
director for French magazine publisher Hachette
Filipacchi Médias, heading up the Chinese-edition of
Elle magazine. But despite the glamorous perks of her
job, which included luxurious parties and travel, she
felt dissatisfied with her life. So she booked a oneweek
stay in Rishikesh, India’s yoga capital, hoping
that daily meditation and yoga might help her figure
out what to do next.

Transforming experience
There, a series of classes with a charismatic instructor
known as Yogi Mohan proved to be a transforming
experience. After seven days Ms Yin said she felt
completely mentally recharged. “I’m really quite
representative of this generation,” she says. “There
are so many people like me who work very hard
and want professional success. We get money, we
get social praise and good jobs. But because we
have all this doesn’t mean that we’re happy. It’s easier
to get all this than to be happy.” For her, it was
yoga that brought an inner calm which she felt was
lacking. She was so impressed with the experience

Meditate on this
As a growing number of stressed-out Chinese professionals take up yoga, one savvy entrepreneur is turning the trend into a nationwide business
The WTO-mandated market
opening triggered the
rush of foreigners
Overworked mainland
yuppies are looking
for ways to relax
? The Economist Intelligence Unit Limited 2006 Business China March 13th 2006 7

Fitness
that she invited Mohan, her yoga instructor, to
China, where he spent several weeks teaching yoga
to a group of receptive students, mostly Ms Yin’s
friends and neighbours. Their enthusiastic response
prompted her to found the first YogiYoga Center in
Beijing in 2003.
Since its founding, YogiYoga has grown to four
centres in Beijing and one in Guangzhou, with a total
of 2,000 paid members. A half-year membership
costs Rmb2,000 (US$249) and one-year membership,
Rmb4,000. Monthly revenue from class fees has
jumped from Rmb30,000 to around Rmb1m, with
Ms Yin reinvesting most of the profits to open new
centres. Another 20 YogiYoga franchises are scattered
throughout the rest of China from Kunming to
Suzhou. For a sum of Rmb150,000, a franchisee is
hooked up with an Indian instructor and receives
teacher and management training, as well as advice
on centre design.
As reflected in YogiYoga’s rapid growth, yoga has
come a long way in China in a short time. When
Yoga Yard, the first dedicated yoga centre in China,
opened three years ago in Beijing, sceptical police
would sometimes stop by to make sure there was
nothing untoward going on. Co-founder Mimi Kuo
says she would downplay the spiritual element to
police and describe yoga as a sport. Indeed, even
today when the practice of yoga has become far
more accepted, Ms Kuo says it still tends to be appreciated
more for its cosmetic benefits than anything
else. Acknowledging China’s secular orientation,
YogiYoga’s own website promises in English: “You
can be more beautiful with me.” (Ms Yin says she is
referring to inner as well as outer beauty.)
That said, YogiYoga’s elite branding concept does
resonate with status-conscious potential customers.
Ms Yin, who cites Coco Chanel as an inspiration, has
hosted product-promotion events by cosmetics companies
Elizabeth Arden and Lanc?me at YogiYoga
centres, while inviting their corporate representatives
to try out her yoga classes.

Elite pursuit
There is no doubt who her target customers are:
China’s new class of upwardly mobile managers and
entrepreneurs. “I focus on the group similar to me,”
Ms Yin says. “They work very hard, they’re ambitious—
a little bit too perfectionist sometimes. They
want something original and really high quality.”
YogiYoga’s current customers, she adds, “are very
active in the economic life of China” and include
CEOs and directors. A survey of its members found
that at least 20% of them earn an income of over
Rmb30,000 per month, and most own apartments
and cars. “They’re not housewives,” Ms Yin says.
In line with its discriminating clientele, YogiYoga
provides high-standard service and ambience, a rarity
in China. The company’s practice areas typically
have a view of the outdoors: a classroom in Beijing’s
Chaoyang Park features a floor-to-ceiling wall of
glass windows overlooking the park. One yoga aficionado
who has attended classes at both YogiYoga
and other yoga establishments in Beijing sums up
the difference: YogiYoga’s exercise mats “don’t stink.”
Ms Yin says she wants the YogiYoga brand to be
associated with what she calls “pure yoga,” emphasising
a clean, natural environment. Artful posters
outside and inside the centres show shots of Yogi
Mohan with a benevolent countenance, sitting crosslegged
in a pure white suit. Such quintessentially
Indian images do seem to strike a chord with local
yoga practitioners. Even in beginner yoga classes,
most Chinese attendees know the words to the
accompanying Indian prayers and chant in unison.
The soft-spoken Yogi Mohan, who only found his
calling after a stint as a software engineer in India,
says he is not bothered by the idea that his image
has become a central part of YogiYoga’s marketing
plan. The larger point, he says, is to help the company
raise the standard of yoga instruction in China.
Despite YogiYoga’s early success, its future is
unclear. For starters, there are only a limited number
of people in China who can afford YogiYoga’s prices.
So to broaden her customer base and generate more
licence income, Ms Yin has decided to create a new
mass-market yoga brand, YogiLotus, with lower
prices and less pristine classrooms. The teachers will
all be Chinese, not Indian. (YogiYoga centres employ
a mix of both Indian and Chinese instructors). Two
YogiLotus franchises will open in the next two
months, and a third directly managed YogiLotus centre
in Beijing will begin classes by May. Ms Yin also
plans to open two new yoga centres in Chongqing
and Shanghai over the next year, with each promoting
both the elite and mass-market brands.

Yoga civilisation
Ms Yin says she is not just interested in making
money but wants to “promote this huge, rich civilisation”
of yoga all over China. In October 2005
YogiYoga sponsored the first yoga show in China. To
improve standards in China, she says she awards
YogiYoga teacher certificates only after 200 hours of
training, similar to the minimum standard required
by the Yoga Alliance, a US-based non-profit group.
For her part, Ms Yin figures that she will have
established the foundation of a stable chain in a
couple of years, and can perhaps hire a manager
then to try her hand at something different.
Eventually, she hopes to be working in film again,
perhaps as a producer. But for the moment, she
says: “Yoga has such good potential in China. If I
worked in cinema, I don’t think I could be something
extraordinary. But I’m sure in yoga I can be
number one.” At least for Ms Yin, it seems all that
meditation has focused her mind on the path to
true professional happiness.
Indian images have struck
a chord with local yoga
enthusiasts
Ms Yin wants to promote
yoga all over China