Text/ Fang Wenyu Editor/ Chen Xiaoping
In 2020, the fitness family could not continue to exercise offline due to the epidemic, "cloud fitness" rose rapidly, fitness turned to family scenes, and intelligent fitness gameplay continued to upgrade.
Capital enthusiasm surges, the American smart fitness head company Peloton, the stock price soared 440% in 2020, at the beginning of this year, the peak market value exceeded 50 billion US dollars.
Giants such as Apple and Xiaomi are also raising their bets, and start-ups are financing fiercely.
In January 2021, Keep completed a $360 million Series F financing, with a post-investment valuation of more than $2 billion, a valuation of 1 times more than 8 months ago; FUTURE, which focuses on smart fitness mirrors, raised three times a year, and raised $300 million in Series B financing in April.
Entering the second half of the year, the home smart fitness track, new entrants are still a steady stream, however, the stock price of the leader Peloton has been greatly adjusted, after the enthusiasm, the industry is also undergoing subtle changes.
Giants bet
In October this year, the family fitness technology brand Yesoul Wild Beast announced that it had completed a round of financing of more than 100 million yuan, led by Xiaomi Group, and followed by Capital and Zero2IPO.
Wild Beast provides smart fitness hardware, professional instructor online guidance, top fitness courses and other home health management solutions, and its hardware categories include spinning bikes, treadmills, rowing machines, etc. In the first half of 2021, the sales of its spinning bicycles ranked first in the category on Tmall and Jingdong.
Wild beast spinning bike
It is worth noting that Xiaomi, which led the investment, is also tilting its resources to the field of home fitness, and has developed a number of fitness hardware such as bracelets, watches, and body fat scales. As soon as the bracelet was introduced, try to combine it with fitness classes to monitor the user's real-time heart rate, calorie consumption, etc. through the bracelet.
In November, Baidu's Xiaodu Technology joined in and launched a smart fitness mirror, which is a built-in fitness course of "Tiantian Smart Fitness Mirror", the standard version of the product is priced at 4199 yuan, and the flagship version is priced at 4699 yuan.
Even Apple is making a fuss about fitness.
This fall, Apple upgraded its official fitness service system, and the upgraded Fitness+ covered 15 new countries and regions, launching a richer and more diversified content service.
Fitness+ has launched a group training feature that supports up to 32 people, allowing users to take meditation sessions directly through AirPods.
In addition, Apple has reached a cooperation with the Tempo smart mirror.
The home smart fitness track is very hot, essentially from the demand, offline traditional fitness venues, there are indeed a number of pain points:
First, time and space restrictions, if the road round-trip each half an hour, plus fitness 1 hour, go to a gym, it takes 2 hours; second, personal training is difficult to meet, fitness has a certain scientific, professional, if there is no customized service of personal training, it is impossible to start, and it is difficult to insist; third, the cost is expensive, apply for a fitness card plus personal training costs, and the time cost of investment, sweating fitness is not cheap at all.
The rise of smart fitness, return to the family scene, first of all, the time and space constraints are greatly reduced, a large number of online courses and AI customized services, can be large-scale supply, so that not only convenient users, but also can significantly reduce costs.
The sudden outbreak of the epidemic has accelerated the popularization.
According to the 2020 National Sports Health Trend Report, during the period of home isolation, the enthusiasm of the whole people for sports is high, the exercise methods are diverse, the use of sports apps accounts for 48%, the proportion of sports videos on video websites is 37%, and the proportion of emerging coaches' live sports has reached 20%.
Under this trend, the market space is growing rapidly.
According to iResearch's "2021 China Intelligent Sports fitness Industry Research Report", China's intelligent sports and fitness market will be about 10 billion yuan in 2019 and is expected to exceed about 82 billion yuan in 2025, with an annual compound growth rate of about 46%.
According to the statistics of the "2020 China Fitness Industry Data Report", as of December 2020, the membership of China's fitness industry is about 70.29 million (excluding Hong Kong, Macao and Taiwan), with 1.4 billion as the total population base, and the fitness population penetration rate is about 5%.
If the home scene can account for half of it, there are 35 million stable paid members, at least a 100-billion-level market, if accompanied by clothing, equipment, equipment and other peripheral products, it is a trillion-level market.
This determines the imagination of the head company.
In the case of the Internet fitness brand Keep, founded in 2014, it has completed 8 rounds of financing in 7 years, and the valuation has risen steadily, and star capitals such as BAI, GGV, and Tencent have bets, of which BAI Capital has accumulated 5 investments.
Content Catastrophe
Home smart fitness, no matter what kind of business model, is basically inseparable from two major elements: "smart hardware" + "content service".
In the case of Peloton, the hardware products are mainly bicycles and treadmills, and there are also subscription content products.
In Q1 (July-September) of fiscal 2022, Peloton hardware revenue was about $500 million, while subscription revenue was $300 million, but the latter's gross margin was much higher and the growth rate was significantly faster.
In fact, "hardware + content" constitutes the two cornerstones of smart fitness, and in the long run, the value of content may outweigh the hardware.
This judgment is based on two reasons:
First, hardware has a typical low repurchase attribute, from the commercialization consideration, follow-up content services, is to enhance user stickiness and member repurchase of the core of the hand;
Second, it is difficult for the hardware side to obtain lasting differentiation advantages, and the cultivation of the content side is easier to precipitate the user base and create a fitness ecosystem.
Taking smart fitness mirrors as an example, some manufacturers have the advantage of being the first mover, and can use intelligent technology to provide users with a deep interactive experience of motion capture and feedback and real-time guidance. On the hardware side, however, the associated functionality is easily imitated.
At present, the smart fitness mirror products standing at the outlet, in addition to dozens of brands such as FITURE, YUPP, Leke, JJ mirror, and Yijian on the market, Baidu has entered and even priced lower.
Source: FITURE official website
In this case, a head company like Keep is investing more and more resources to do solid content, and strive to deepen products and services, make the experience excellent, and win with professionalism and rigor.
First of all, it strives for systematic and professional PGC self-developed courses.
Keep has produced a large number of official course projects, behind which the content product manager, course designer, visual production and other teams cooperate for 3-5 months of polishing, and set up an independent position of live fitness coach, and hundreds of people such as course designers and brokerage operations constitute the core team of live classes.
Secondly, Keep is vigorously expanding the content quality of PUGC produced by creators, expanding the richness of categories, creating a community atmosphere, and building a richer sports content ecology.
In December, it released the "10,000 People Stretch Plan" for fitness content creators, and for creators at different stages, it gave all-round support for traffic operation, product services, and commercialization to promote the growth of platform PUGC.
Keep's goal is to incubate more than 150 "millions of followers" creators within one year, and within 3 years, 10,000 creators can earn more than 10,000 on the Keep single platform.
Keep's coaching team
It is reported that in 2021, more than 60 authors have explored the production of paid courses with Keep, and a group of talents have obtained corresponding benefits through high-quality paid courses.
Keep even tests the waters with gamified content, which represents a new experience for smart fitness.
In October, Keep announced that Pamela Raffles Pamela Rief officially became the global sports ambassador of keep smart bracelets, and launched the Pamela bracelet game schedule, as long as you wear KeepB2, B3 bracelet, you can gamify the experience of Pamela efficient fat loss, aerobic dance exercises, energy improvement exercises, chest and back tightening and straightening training, a song dynamic warm-up exercises and other courses.
Closed-loop challenge
No matter how good the prospects, all the options for a smart fitness track must answer a fundamental question: how can you make money?
From the perspective of business model, how to organically form a closed loop of revenue sources such as content, equipment and services is the key to determining the profitability and sustainable development of this track.
This is not as easy as imagined, because in the home fitness scene, the means of monetization are also limited, nothing more than equipment, equipment, food and courses.
In Peloton's case, selling fitness equipment constitutes the core source of revenue, and in Q1 of fiscal 2022, it fell from $600 million in the previous year to $500 million, and the gross profit margin fell sharply, from 39% in the same period last year to 12% this year, resulting in a 10 percentage point decline in overall gross margin.
This financial performance has led to a sharp correction in Peloton's market value in the past six months, and the stock price has fallen from a peak of $17.1 billion to a level of $37, with a market value of about $12 billion.
In the future, as competitors accelerate, if the revenue is too heavy on hardware, it is likely to encounter the same challenge.
Taking the smart fitness mirror track as an example, as soon as a new player such as Xiaodu Technology entered the game, he launched the "300 days of exercise a year, free refund", which will give great pressure to the incumbent.
In addition, if a large amount of hardware is purchased as a precondition for screening users, it may limit the scale of users and limit the possibility of ecological development. For example, as a pioneer of the smart mirror track, FITURE has only more than 30,000 cumulative users.
A more secure choice may be to enlarge the scale of users with a low threshold, cultivate a community ecology, and then choose a monetizable path to deepen cultivation and seek diversification of income.
In a sense, this is the strategy that Keep executes.
When Keep first came online, the character was more like a mobile fitness tool, which started with tools and acquired a large number of users. According to some data, the number of Keep users has exceeded 300 million, and the number of members has exceeded 10 million.
Based on the huge number of users, Keep provides one-stop sports solutions around their "eating and wearing practice" needs, organically matching online sports content with offline consumer goods (including smart hardware small devices, food, clothing, etc.).
For example, Keep, as a vertical fitness app, has launched smart hardware, the same equipment for the course, and lifestyle consumer goods such as clothing and light food.
"In this way, whether users are doing small equipment training, want to run on a treadmill, want to ride a spinning bike at home, or need a simple diet plan, Keep can provide them with the corresponding plan and goods." Keep vice president Huang Jingjing said.
It is understood that Keep has formed three parts of revenue: the first is the consumer goods business, the second is the advertising business, and the third is the membership service business.
In terms of scale, consumer goods share the most, while advertising and membership business profits will be better. Among them, some SKUs have received positive feedback on the user side, such as yoga mats, foam rollers, etc. are the first in The single category of Tmall sales.
The key to implementing this strategy is that it is necessary to meet the real needs of users, achieve the ultimate single product, form some advantageous categories and brands, from content teaching to product use, and achieve the consistency of experience, rather than "doing for the sake of doing" and one-sidedly pursuing the "big and complete" of the category.
For the emerging smart fitness track, gaining the favor of capital is only the first step, and the more important challenge is to examine the unknown potential needs of users, provide lean solutions that are truly differentiated, and achieve the ultimate in interactive and interesting experience scenarios.