The Daily Mail reports, the fire began at a neighbor's house, but quickly spread to the establishment located in Leqing, Zhejiang province.
Photos of the incident show that bathhouse patrons had no time to get dressed as the flames quickly spread out in the building.
"One minute I was soaking in the tub, the next I could smell smoke and hear screams," a customer said. "There was no time to get my clothes. I just ran for my life."
A fire service spokesman attributed the fire to a fractured gas pipe in an apartment kitchen, which eventually exploded.
"The fire spread very rapidly and we were lucky that more people didn't die," the spokesman said.
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