Why Are Chinese Fitness Equipment Manufacturers Still Hesitating to Move Production to Southeast Asia?

by Roger Yao

As the U.S. continues to impose substantial tariffs on Chinese imports, export-oriented companies in China are facing ever-growing pressures. This trend has recently intensified anxiety among manufacturers in the fitness equipment sector.

In recent years, the notion of shifting production abroad has been widely discussed, with Southeast Asia emerging as a favored investment destination for many Chinese companies. Nevertheless, actual movement within the fitness equipment industry remains remarkably limited.

The industry leader, Johnson Health Tech, took the pioneering step by establishing a factory in Vietnam’s Bac Ninh province in 2019, and recently expanded operations by opening a second plant in the same industrial zone. 

Reference reading:

Johnson to Set up Second  Manufacturer in Vietnam

Another publicly listed Chinese fitness equipment firm from Shandong province also initiated factory setup in Vietnam earlier this year. 

Additionally, a few companies reportedly acquired land plots in Thailand and Malaysia, though actual factory construction has yet to commence. 

So, what factors contribute to this prolonged hesitation?

After extensive dialogue with several key fitness equipment manufacturers, I've distilled the issue into seven key considerations:

1. Lack of Clear Order Commitments from Overseas Clients

While U.S. and European clients are urging Chinese manufacturers to shift capacity to Southeast Asia, these buyers rarely provide binding purchase commitments or guaranteed order volumes. Without assured order security, manufacturers face a classic "chicken-and-egg" dilemma. Consequently, both sides continue to cautiously probe each other's intentions, unwilling to make the first move.

2. Underdeveloped Supply Chains and Limited Cost Competitiveness

Over the past decades, China has emerged as the global fitness equipment manufacturing hub, featuring a highly mature supply chain and established industrial clusters. By contrast, countries such as Vietnam and Thailand lack similar industrial ecosystems. Even Johnson Health Tech’s initial facility in Vietnam heavily depended on parts imported from China, only recently beginning to manufacture key components locally in its second plant.

For smaller or mid-sized firms, developing their own supply chain for critical parts in Southeast Asia is highly challenging. The absence of mature suppliers nearby means significant hurdles in quickly achieving cost advantages, resulting in prolonged dependency on imported parts from China.

3. Uncertainty of Future U.S. Tariff Policies

Currently, cumulative tariffs on Chinese fitness equipment imports into the U.S. have exceeded 30%. Moreover, the U.S. government has indicated it will announce updated tariff guidelines on April 2, 2025. Given the current U.S. administration’s policy volatility, further changes afterward remain highly plausible.

Moreover, the U.S. is signaling the possibility of extending tariffs and trade restrictions to Southeast Asian nations, as evidenced by recent investigations into solar product transshipments through Vietnam. Such developments exacerbate uncertainty for Chinese manufacturers considering investment in these countries.

4. Challenging Investment Environment in Southeast Asia

Preliminary evaluations by companies investing in Vietnam have indicated total production costs are roughly 10-15% higher than in China. While Vietnam retains cost advantages once U.S. tariffs on Chinese products are considered, rising land and labor costs—driven by increasing investment flows—may soon erode these benefits.

Additionally, recruiting adequately skilled local workers remains problematic, compounded by cultural and political differences. A Taiwanese business executive candidly remarked that moving manufacturing to Southeast Asia has proven far more challenging than relocating from Taiwan to mainland of China decades earlier.

5. Financial and Management Resource Constraints

For medium to large enterprises, overseas manufacturing investments typically range from some million to over 50 million USD—no small financial commitment. Yet investing below this scale yields little real competitive advantage. 

Moreover, simultaneously operating factories both domestically and abroad significantly stretches financial resources and managerial focus. Any setbacks in overseas operations could severely impact domestic business performance.

6. Entrepreneurial Willingness and Age-Related Considerations

The majority of Chinese fitness equipment entrepreneurs are aged between 50 and 60. After decades of industry dedication, starting anew in a foreign country requires extraordinary courage. 

Additionally, limited English proficiency among senior executives exacerbates challenges associated with overseas living and working conditions. Consequently, some entrepreneurs already inclined toward retirement or exit strategies increasingly see investing abroad as unappealing.

7. Shortage of Internationalized Talent

Aside from business owners' personal motivations, the industry's severe shortage of globally experienced production and management talent presents another substantial barrier. Professionals adept in cross-cultural management, production coordination, and fluent in languages such as Vietnamese, Thai, or Malay remain exceedingly rare within fitness equipment sector.

Relocating production to Southeast Asia necessitates hiring and training extensive local workforce, which poses considerable operational risks, particularly regarding cross-cultural communication and quality management.

Final Thoughts

Given the escalating pressures from U.S. tariffs and the increasingly complex international trade landscape, many Chinese fitness equipment manufacturers find themselves wrestling with the critical question: Should we relocate manufacturing abroad, particularly to Southeast Asia?

I fully recognize the immense difficulty in making such a strategic decision. Immature supply chains, unpredictable tariff policies, financial pressures, and talent shortages—each factor represents a significant hurdle. 

However, some medium-to-large-scale Chinese fitness equipment companies have begun actively exploring Southeast Asia through field research and site visits, striving to identify feasible and sustainable solutions.

Ultimately, carefully evaluating these factors and closely tracking evolving trade policies will remain crucial for Chinese fitness equipment manufacturers seeking to navigate global market challenges successfully.