Muay Thai and Money-Laundering: How (Not) to Do Business in Beijing
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Muay Thai and Money-Laundering: How (Not) to Do Business in Beijing

Fighter, gym owner, author, TUF coach, and all-around martial arts entrepreneur Vince Soberano talks MMA and Muay Thai in Beijing, and what it's been like to do business inside China for a decade.

Vincent Soberano, a Filipino-American Muay Thai fighter and martial arts entrepreneur, left his life in the United States for China in 2005. By 2006, he'd established his own Muay Thai gym in Beijing. His gym grew, changed locations, and attracted new investors. Things were going well for the former IT-worker-turned-gym-owner.

A few years later, he found himself involved in a money-laundering scheme.

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Vince's Chinese partners had been using the mega-gym they helped him build as a front to funnel money into their other businesses. The gym was so large it had become unprofitable, yet the underhanded owners, riding the wave of Muay Thai and MMA's increasing popularity in China, lured more rich investors into the scheme.

When the illicit activities came to light, Vince walked away. He took his students with him and opened a much smaller, studio-sized gym in another part of town. Unlike his former mega-gym, the new gym was profitable. He operated it successfully until last year, when he sold it and moved on to building a new company in northern China, FightFit Sports LLC, which he describes as dedicated to helping other martial arts entrepreneurs open businesses that make sense.

Vince, who has racked up over 100 fights since his first in 1978, is working to build both himself and his Black Tiger Muay Thai and MMA system into a brand. He's hustling all over the board. He played a cage fighter in the Jackie Chan film Police Story 2013, coached on The Ultimate Fighter: China, and published 50: Fit and Fighting, a fitness and nutrition/ martial arts memoir-guide, all within the last couple years.

He's 51 this year, about to celebrate his 10-year anniversary doing Muay Thai business in China. His days in Beijing are full. In the morning Vince gives private lessons to rich clients who book him months in advance. His lunches are often spent consulting prospective owners of new gyms, or managing his team of coaches who implement his training programs at gyms around Beijing. Afternoons Vince coaches China's up-and-coming pro fighters, or meets with gym managers to design trendy Muay Thai fitness programs aimed at China's new rich. At night he teaches group classes to Beijing's burgeoning population of fight-fitness enthusiasts. He gets home late most nights, where he catches up on emails and winds down over a shot of single malt before bed.

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We caught up with Vince in between sessions at his new partner gym, Tiger King, in the basement of the Cervantes Institute just south of the Beijing Workers' Stadium.

Fightland: First of all, why did you come to China?
Vincent Soberano: In 2005, I came to China as a software engineer. My company opened an office here and I was assigned here as a director for the engineering department. While in Beijing, I was invited to give some Muay Thai workshops. This opened my eyes to the opportunity of bringing my brand of Muay Thai to China, which I did officially in 2006.

What is it like doing business in China?
Doing business here is very challenging and totally different from the U.S. It has its own characteristics, unwritten rules, norms, and ethics. You cannot apply Western business rules only and expect to succeed in doing business in China.

How are average Chinese people responding to Muay Thai?
Muay Thai is really popular to Chinese people nowadays. They see it as a legitimate ass-kicking fighting system that is fun to learn and great for losing weight and getting fit, unlike their traditional martial arts. Also Chinese tourism in Thailand has greatly and exponentially increased within the past six years and, with Muay Thai being Thailand's national sport and one of its highlight attractions, Chinese tourists have become acutely familiar with it. I think more Chinese know what Muay Thai is compared to MMA.

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What is the future of Muay Thai in China?
Muay Thai in China is growing as a spectator sport, thanks to promotions like K1, Kunlun Fight, and many regional shows. Although these are mostly technically "kickboxing" rather than traditional Muay Thai, you see the majority of fighters wearing Muay Thai shorts with the Thai characters emblazoned on them. But, more significantly, I see a bigger future of Muay Thai in China as a fitness trend rather than sport because it is a very appealing workout system to young adults who want to get in "fighting" shape without having to fight. It's not like Taebo or Body Combat because Muay Thai has a direct sports model that proves its effectiveness and athleticism. Muay Thai fitness practitioners have the Muay Thai fighters as role models and proof-of-claim.

How about the future of MMA in China? Is the UFC popular here?
There's a reason why MMA is the fastest growing sport in the world, and the Chinese people are not immune to its appeal. Once you watch it, you'll want to watch more, hate it or love it. UFC is the biggest brand in MMA and the Chinese are very aware of it. UFC now has a few Chinese fighters in its roster, which is good for China. UFC fights are also aired for free via Sohu TV in China so it's getting a lot of viewers now. However, as a show, UFC has not quite taken off in China mainly because it doesn't have any Chinese superstars yet. There are other MMA organizations that have penetrated China faster than the UFC because they put a huge focus on Chinese fighters and have promoted Chinese champions as well. UFC does not even have a single Chinese fighter in any of its main event cards whereas OneFC, RUF, Legend, and Kunlun have strapped championship belts around many Chinese fighters. On the other hand, I think this is all laying ground for UFC to come to China in the near future. At the end of the day, UFC is the most prestigious and the most highly regarded MMA promoter in the world. The Chinese know that and, deep inside, they would love to see a Chinese champion in the UFC someday, like a Yao Ming in the NBA.

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Where are the hotbeds of MMA or Muay Thai in China?
I believe southern China is the hotbed of professional Muay Thai. The region is close to Hong Kong, which has been a hotbed of Muay Thai for more than a decade. The Hong Kong influence is stronger in the southern China region and there are more fighters and spectators there. Shanghai and Beijing are more on the MMA scene, as the place where many foreigners have come and contributed to the proliferation of the sport. People like Andy Pi pioneered MMA in Beijing and eventually introduced it nationwide as a spectator sport. I helped Andy in 2005 organize and promote the first professional MMA show at Beijing Sports University, and bring the first Chinese pro MMA fighters to the Philippines on their international debut.

Are your students mostly foreigners or Chinese?
My students are a mix of Chinese and foreigners. I would say 75% Chinese. Mainland Chinese are very curious about all the options and possibilities that are still new to them. The majority of Chinese are all about exploring, having fun and experiencing different things, compared to the majority of my foreign students who are more focused on sticking to one or two things and gaining mastery of these skills. There are a few Chinese, though, that have stuck with Muay Thai since I first taught them almost a decade ago.

Currently the gyms I work with cater to the upscale crowd, mostly yuppies, executives and celebrities. However, I also train some of China's top professional fighters. I'm the striking and conditioning coach of the first Chinese to fight and win in the UFC, Zhang Tiequan. I've trained, at one point or another, all of the Chinese fighters that have fought or are still fighting in the UFC to date. The first Chinese fighters to hold championship belts in major MMA organizations were all my students. I've also had the honor of becoming a resident coach in the UFC's The Ultimate Fighter: China reality show in 2014. I'm currently the striking coach of Li Jingliang, one of China's top UFC fighters.

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Tell me more about the top Chinese fighters you've trained.
I originally started training MMA fighters in 2005 here. Many of these original guys are now legendary names in Chinese MMA. My students like Zhang Tiequan have won international titles and made it to the UFC. Now I'm working with a new generation of Chinese MMA fighters as the striking coach of China Top Team. Guys like Li Jingliang, Yao Honggang, Yao Zhikui and many others.

How are Chinese fighters unique in their skills, attitudes, or expectations?
Since 2006 I've seen the Chinese fighters evolve, shedding old techniques that don't work in the MMA playing field and adopting the right skills and training methods. They still have a long way to go to be able to compete against the North Americans, Europeans, and Brazilians at the top levels. However, the Chinese are resilient. Every generation of young fighters I've seen in China is rapidly evolving. There are now a lot of American and Brazilian MMA coaches here that bring years of experience to these next-generation Chinese fighters. Right now, compared to the U.S. and Brazil, the MMA talent in China is still under development. It will take a few more years, perhaps another generation, to have another "Yao Ming" in the UFC. But mark my words, that time will come.

I've seen a lot of MMA gyms in Beijing, but pure Muay Thai gyms are very hard to come by. Why do you think that is?
People have asked me why I don't just open a pure Muay Thai gym here in Beijing, but there's not enough demand for it. It's not like Thailand. The Muay Thai camp business model only makes sense financially in Thailand. It is their national sport and one of the top tourist activities there. For one, there's an endless supply of cheap trainers there so you can actually run a large staff and provide one coach per two or three students. Try doing that in China. You'll have to import these coaches from Thailand, pay for their accommodations, work visas, air tickets, etc. Then you'll have to charge students an arm and a leg just to afford keeping these coaches. At the end, how much money can your business really make? As a business owner, can you actually make a living and pay your own rent and salary with this kind of model? Nope. You'll need investors and another source of income, or you'll eventually have to sell your gym. It's sustainable in Thailand. Remember, no one comes to China just to learn Muay Thai. If they come here for a martial arts tour or immersion, they'll go to the Shaolin Temple in Henan. Now, that place makes a lot of money. Enough to actually file for a successful IPO!

What advice do you have for people looking to crack into the MMA or Muay Thai business in China?
Focus on Muay Thai and/or MMA for the masses (fitness and recreation), rather than professional fighters. Offer a supplementary program for competitive fighters but don't put so much focus on it. Most of all, DO NOT open a mega facility or any training facility more than 300 square meters if you're serious about making real profit. However, if the plan is to attract investors with a large facility and move money around, then that's a whole different initiative.

Wait, what's so bad about opening a big gym?
Having been in this industry since I opened the first Muay Thai gym in San Diego back in 1992, I know for a fact that, with mega-sized gyms paying the soaring rent prices here in Beijing (which now actually matches U.S. real estate rental prices), the math doesn't add up. In the U.S. it may work because memberships are sold through long-term contracts (some are lifetime), which are then supported by automatic banking withdrawals. Contracts are also usually sold to financing companies who take over the billing. The gym owners get the money up front. In China, without this automatic billing system, memberships are paid in cash. Discounts are offered through long-term memberships but not many people here can afford to pay that kind of cash for, say, a one-year membership. And those who do, have ulterior motives such as being able to use the shower facilities. I know at least half a dozen guys who have turned off their hot water at home because they can just go to the gym and use the showers there. It's cheaper, especially with one-year memberships as low as $500. So now you have two problems in Chinese gyms: either not enough people to pay membership fees, or an over-crowding of people paying cheap long-term deals, which turns away new sales. And the math still doesn't add up. The solution: get more investors. Dilute old shares and lure in more investors, most of whom are newly rich Chinese from the provinces who think that big cities like Beijing are paved with gold.

Personally, I'm an entrepreneur but also a passionate martial artist. I want to open a facility that I can sustain without having to spend most of my time courting investors. I want to open a place where I can teach my craft, make a good living, and maybe eventually open a chain of small studios with instructors I certify and franchisees that share the same passion for martial arts. I know that this business model – my business model – has worked tremendously well for me since 2006 in China. I established my consulting and franchising company, FightFit Sports LLC, to help other entrepreneurs open their own studios and promote a sport or activity that they are passionate about.