Fitspos and gym enthusiasts in Malaysia are crying due to their money gone from the sudden closure of popular sports and gym provider 1Fit app.
The provider took to Instagram (13 June) to announce its shuttering in the country due to it being “unsustainable”. Founder and CEO Murat Alikhanov had told active users that they can apply for a refund for their subscription. The company added they are “ceasing operations according to Malaysia law” and will “follow up when there’s clarity”.
Gym and studio owners are affected by this too, as the app told them they will be contacted personally.
So what happened?
Due to insufficient funding, the app is currently undertaking liquidation to wind down its Malaysia business.
It said that all refund requests will be processed in strict queue order, subject to available funds. Those requesting refunds will have to do so via a link that goes to a 1Fit WhatsApp chat.
As of today (19 June), there are over 600 users in that WhatsApp channel.
Many users had paid the subscription plans in full, which costs about RM1,500 (S$453) to RM3,500. A 1Fit membership pass costs around RM2,500 for unlimited classes for two months. For context, the higher amount (RM3,500) is equivalent to a local fresh graduate’s monthly salary.
Users have cried foul and appealed for authorities to step in. The app allegedly pulled a similar exit situation in Mexico and United Arab Emirates. It is unknown if users in those countries have received their refunds.
Why did many people sign up for the fitness app?
It was affordable, and many could try out various workout classes and gym studios.
It was also heavy on marketing, and many users were attracted by the attractive marketing advertisements.
Many thought that with it being an international app, the likelihood of it shuttering was low.
What can we learn from this
#1) If a subscription carries an annual package, think carefully
The first alarm bell should ring if an app offers an annual subscription plan. It is better to conduct a background check on the company before committing to a long-term purchase. Companies can go bust anytime.
Even if the cost is significantly cheaper, ask yourself why it would be so heavily discounted. What’s the catch?
#2) If a product is heavily marketed on social media, ask yourself why
Does the app not sell itself? Why does it keep appearing on your social media feed?
Also, be cautious on signing up for deals via social media marketing. It may be a convenient way to shop and find bargains, but increasingly scams and bad deals are occurring via these mediums too.
#3) Does it mean my subscription apps are in danger?
In this challenging and uncertain economic climate, there is a likelihood of companies going dark and closing down due to weak performances and/or lack of funding.
It is advisable to take a more short-term approach when it comes to subscription purchases. That could mean opting for monthly repayment cycles rather than longer term.
This also helps you to have the flexibility to cancel your subscriptions if you feel that they become a payment burden in this uncertain job market.
Final tips to ask yourself before signing up for subscription plans
- Ask yourself, will I use this regularly
- Check cancellation policies before signing up
- Set a calendar reminder, before a trial or monthly payment is renewed
- Review your subscriptions often
