Keep IPO, can this medal support market confidence?
Written by | Zheng Sifang
Edit | Gong Zheng
Recently, a saying that "Keep sold 500 million with medals" has been widely circulated on the Internet. But Keep people were noncommittal.
Positioned as a sports technology company by founder Wang Ning, Keep has been hard at work exploring ways to monetize and make money for eight years since its launch in February 2015. To this end, it sells memberships, paid classes, light food, yoga mats, treadmills, and offline gyms. But in the past three years, "anti-humanity" still caused Keep to lose 5.8 billion, while the revenue in the same period was only 3.3 billion. Until it discovered that the business of selling physical medals, a project that costs less money, gets young people out of bed and moves, and in turn willingly pays for Keep, has become a highlight in Keep's prospectus, which has always wanted to IPO.
#01
Keep medals, the new social currency
On the eve of Valentine's Day, Qiu Zi received a Keep medal.
This is a joint medal of a little Liu duck running with two windmills, and Qiu Zi thinks the medal is very good. But she never exercised and couldn't figure out how the Keep medal would be sent to her.
Thinking that only her boyfriend around her often exercises, Qiu Zi determined that this medal came from her boyfriend's heart - a card to run for love.
▲Figure | Little Liu Duck Medal
Keep's medal campaign is not new, it went live back in 2015 and users need to sign up for a virtual sporting event to finish the game. At that time, Keep only handed out virtual medals, and the momentum was concentrated in a small circle.
It wasn't until these years that Keep began handing out both virtual and physical medals. Especially for physical medals, Keep has allowed it to co-brand with many well-known IPs, and successfully transformed into a social currency among young people by improving collectibility and friend circle display value.
"Who hasn't had a Keep medal from their boyfriend." Nowadays, few people on social media can tell whether this is a marketing trick deliberately released by Keep or a meme. What couples want is a love card.
Of course, the show costs money. Physical medals are mostly 39/49 yuan, and virtual medals are 19.9 yuan.
Stimulated by human display of love, the energy behind a medal is greatly stimulated.
In order to get his favorite medal, Qiu Zi also began to take the initiative to download Keep. This is one of the outcomes that Keep hopes to achieve. In 2021, Keep officially announced that the number of registered users exceeded 300 million. The platform will never have one more user.
The medals also seem to be able to solve another knot in Keep's heart - Keep's average monthly active users were only 37.7 million in June 2022. In contrast, site B also has 350 million users (as of December 2022), but its monthly activity is as high as 330 million, and its daily activity is also 90.3 million (third quarter of 2022).
The market attributed this to Keep's anti-humanity. Although people download Keep out of a whim, they quickly forget to open it in the midst of laziness and busy work.
But to get a medal, people have to move, and that's how active users Keep wants.
After Qiu Zi finished downloading the new user, he sent the registration link to his boyfriend, and the hint was obvious. But the boyfriend in turn got tired of begging for cards, and finally Qiu Zi completed the first run of Keep, although the whole process was used.
This does not violate the rules of the event. Keep In order to get everyone moving, the threshold is set very low. The registration page for the event displays a health reminder, "Run" or "Walk" to complete the race.
Finally, Qiu Zi bought a "milk tea rat" medal, which became the material for her boyfriend to show off in her circle of friends. Qiu Zi's cousin teased, "There is a lack of a sister who runs medals for me."
Socialize and expand your circle and spark interest. After 8 years of business, Keep seems to have finally found another simple and crude way to pry human nature.
In addition to the love card, there is also the friendship card.
Gao Shan once signed up for the "Apprentice Eros" event on Keep on the eve of her girlfriend's birthday, and her joint medal was the popular characters Kuluomi and Melody in Sanrio's IP.
"Other girls have it, and my girlfriend must have it too."
In the end, Gao Shan successfully ran the symbolic 5.20km and delivered the medal engraved with this number to his girlfriend.
▲Figure | Keep medal received by Gao Shan
Endless joint activities and medal designs make people addicted to collecting medals. In idle goods trading platforms such as idle fish, medals also form a second-hand trading market.
For example, the Keep medal designed by the joint crayon Xiaoxin IP, because it is out of print, was charged a high price of 200 yuan on the idle fish. There were even posts identifying whether the medal was genuine or pirated.
▲Figure | Keep Crayon Koshin medal on idle fish
In addition, the joint medal of "The Legend of Zhen Huan" engraved with the names of Concubine Yan, Concubine Xi and Concubine Xi is also very popular. These three names are the titles obtained by the heroine upgrading all the way to fight monsters, and users also have to make corresponding efforts to get it, and the more you want to upgrade, the more you have to run.
Keep may not care. When the young man goes crazy, Keep just laughs.
#02
The other side of the Keep medal
Medals are crazy, but they also have their own boundaries. On the black cat complaint, there is another side to the Keep medal - unstable quality, slow delivery, unclear participation rules, etc.
A user once said that he was looking forward to winning the Zhen Huan medal, and when he opened it after receiving it, he had no face, and felt that it was a design flaw, which made people feel weird. Some users are not very satisfied with the paint loss of many medals.
▲Figure | Some complaints on the complaint platform
If these problems only belong to the quality and operation of a consumer product, Keep can still solve the problem by improving, and once the marketing is excessive, it may consume people's curiosity in advance, which is not conducive to the long-term sustainability of the medal business.
Lin Mei, who has 17 Keep running medals and 1 jump rope medal, recently lost her fever from running wins. The reason is that the frequent turnover speed of Keep medals and the slightly higher price trend have gradually made her feel that "Keep is not the main sport but the main sale".
The once rampant running industry chain has affected the perception of Keep medal activities.
Search for "Keep Run" on some platforms, the business has different quotations on each platform, and some stores sell 500+ orders per month to show their popularity.
According to the participants, there are some large-scale, organized running groups behind this. This undoubtedly goes against the original intention that activity and exercise come first, and medals are the natural result.
▲Figure | Proxy running business on the platform
In this regard, Keep is also trying its best to improve the rules of the event.
According to some participants, some previous medal event participants could receive medals regardless of whether they had completed the required number of kilometers if they registered.
Recently, this rule has been changed to one must run the required number of kilometers to obtain it, which has been recognized by many users.
It's just that some users believe that Keep does not clearly mark this rule on the event registration interface, nor does it clearly indicate "no refund", and Keep has the responsibility to make it clearer.
All of the above may inspire Keep that medals are not omnipotent and need to be careful in operation. Since it is an entity, it is essentially a consumer product and needs quality control; At the same time, its good intentions require better rules to maintain and protect.
#03
How much of an assist a medal can make to Keep's bottom line
In the past 8 years of transformation from tool attributes to platform attributes, Keep has been looking for a successful monetization and profit model, but this road has not gone smoothly.
Keep's exploration of commercialization can be divided into three periods.
From 2015 to 2018, Keep was launched with fitness tools as its positioning, accumulating fitness content and enriching the content ecology to quickly expand users.
According to public information, it took only 105 days for Keep to break through 1 million users, 289 days to break through 10 million users, and 921 days to reach 100 million users. At that time, its main revenue was advertising and small-scale e-commerce.
From 2018 to 2020, Keep started to try the business model of self-operated product sales and content payment. Wang Ning said in 2018 that he hopes to "build a sports platform and ecology driven by technology and content."
This stage of the attempt covers the two scenes of home and city, and each launched KeepKit for the main family scene and KeepLand for the main city scene, hoping to form online and offline linkage.
In KeepKit, Keep launched a series of smart hardware products used in home scenes, while KeepLand mainly carried out in the form of offline gym scenes.
However, the process did not go smoothly. KeepLand once had a large-scale store opening plan, but then closed many stores at a loss and during the epidemic. At present, KeepLand stores are mainly concentrated in Beijing, but there is a new expansion in the idea, that is, to cooperate with traditional gyms to expand the market.
By 2020, Keep's business had formed three major areas, namely membership subscriptions and online paid content, private label products, advertising and other services.
Among these three major sectors, although private label products contribute half of the revenue, they are generally considered to be not very profitable; Membership subscriptions and online paid content have developed rapidly, and the gross profit is also quite high, but the problem in development is that there are more free content on the platform, which affects users' willingness to pay. As the content hub of the platform, many of them have also had greater expectations for the platform's monetization efficiency.
Although Keep has repeatedly been willing to IPO, its profitability has always left the market in doubt. According to Keep's prospectus, from 2019 to 2021, Keep's annual losses increased year by year, with a total loss of 5.8 billion, while the revenue in the same period was only 3.3 billion, with a loss rate of more than 170%.
In contrast, "virtual sports events" have become a bright stroke in the prospectus. According to the prospectus, it "increased user enthusiasm for content supply, and members showed strong user loyalty and stickiness". At the same time, it has also become a major source of income for Keep.
In the fourth quarter of 2021, Keep's revenue from online paid content, especially virtual sports events, increased by more than 500% year-on-year.
▲Figure | Keep's medal
How much revenue does the sector have? Keep gave an example.
In the cooperation with a famous international cartoon IP, Keep attracted millions of users to participate in the 4 phases, and the total amount of commodity transactions exceeded 90 million yuan. This does not include cooperation with other IPs.
In comparison, the cost of virtual sports events from 2019 to 2021 was 4.19 million, 11.51 million and 33.04 million, totaling 48.75 million, which is only half of the transaction volume of an internationally renowned IP cooperation product.
Keep has raised 9 rounds of capital so far, filing two IPOs in 2022. The second IPO was filed in September. The market is watching to see if Keep can make a breakthrough this year.
The sustainability of Keep medals has given the capital market some imagination, but the outside world will always want Keep to do more. Keep obviously needs to further improve the core capabilities of the platform, such as streamlining the government, enhancing the attractiveness of the platform's content, and innovating more gameplay to make the revenue physique more attractive. In this way, the hearts of well-known investment institutions such as SoftBank, Hillhouse, and Tencent can be stabilized.
▲ At the request of the interviewee, the name of the person in the article is a pseudonym.