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KX Pilates’ Aaron Smith explains international expansion prospects and challenges

KX Pilates’ Aaron Smith explains international expansion prospects and challenges
January 6, 2022

KX Pilates founder Aaron Smith has explained how he has looked to protect the brand’s intellectual property while also focussing on ongoing domestic and international expansion.

Speaking to Business News Australia having been named one of Australia’s Top 100 Young Entrepreneurs of the Year before Christmas, Smith opened up about how the franchise had developed from being an early mover in the Pilates space in 2010, learning early on that the business would need an exclusive point of difference in a sea of “copycat studios”.

This started with the brand’s own weighted poles and branded customised equipment, although Smith advised this was soon imitated as well.

Wanting to enhance the brand’s intellectual property, Smith explained “for the last seven years I’ve been thinking we need our own machine that’s specific to our workouts, specific to KX, and everything is controlled with us.”

Initially he spent hundreds of thousands of dollars into the development of prototypes for a machine with a Chinese manufacturer, with 150 rolled out in company studios for testing.

However, while those machines proved unsatisfactory and were discontinued, a breakthrough franchise agreement in China in 2020 - and the opportunities it promised for a significant scale-up - gave Smith the ability to negotiate with Balanced Body, one of the world’s leading Pilates equipment companies.

Smith had pitched to the US-based company before the Chinese manufacturer, but at that time it wasn’t feasible for it to develop a customisable machine for just the Australian market. But with an ambitious Chinese market growth plan, the tie-up became more appealing.

Smith told Business News Australia “when they realised our growth potential and how big we want to get, they said they were happy to develop now. We basically made one of their machines a hybrid, and the Balanced Body KX Former was formed.

“Balanced Body has been in existence for about 50 years and we're the first company in the world they’ve ever done an exclusive deal with, which was incredible for us - a small business out here in Australia. That’s really put us on the map.

“Intensity is now raised in classes, there’s about 20 new features on these machines that basically relay to hundreds more exercise that we can use, so variety for our trainers to teach, variety for our clients who've been with the brand for 10 years. We’ve put that into 10 studios now.”

The KX Pilates network currently includes 79 studios in Australia, 12 in China, one in Singapore, and a recently signed franchise agreement in New Zealand that should lead to the first studio opening in the country in the coming months.

Since late 2020 all new studios have the new machines, and Smith has given the network three years to fully transition to them. In the meantime, KX Pilates is eyeing growth in China, a potential franchise agreement in Singapore and is in talks with potential US partners.

Smith added “my partner over in China, he basically wants to open 500 studios in the next three to five years. We would be happy with 50 to 100, but you’re talking to a man who’s been in fitness businesses over there for 20 years, and a 1.4 billion population compared to 26 million here.

“He’s going to grow fast, because of the classic Chinese model that if you don’t grow fast, somebody’s going to overtake you and grow faster.”

In December, Smith was placed placed 69th in the top 100 Young Entrepreneur of the Year Award list presented by Business News Australia.

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