Per reporter: Li Zhuo Wang Ziwei Per editor: Liu Xuemei
How many offline gyms can a smart fitness mirror match? The latest 3-year answer given by FITURE Magic Mirror is: 2,000.
But if the core of "professional and fun" can be migrated, does online fitness still need to adhere to a single terminal? This is not a new problem for FITURE, which started with smart fitness mirrors, but it has new actions and new thinking.
"FITURE will start the public beta of the mobile version in China this month (September)." Zhao You, partner and CFO of FITURE, revealed in an exclusive interview with the "Daily Economic News" reporter.
Since its inception in 2019 and the launch of the first magic mirror at the end of October 2020, as a capital "darling" that has raised three rounds of financing a year, setting the highest financing record in the domestic track, FITURE's move is intriguing.
On the one hand, as a "survivor" after the "Hundred Mirrors War", there are many big factories in the smart fitness track, and the flames still exist; On the other hand, the industry has changed dramatically -
Liu Genghong's fitness live broadcast has become the norm in the industry from phenomenal content; Keep (03650HK, stock price HK$31.85, total market value HK$16.743 billion) became the "first stock of sports technology" in one of twists and turns; The price of MIRROR, the originator of fitness mirrors, was cut by 90% by the acquirer Lululemon; Domestic offline gym shuffle triggers domino effect... The representative of the emerging gym immediately shouted out the "goal of 10,000 stores".
"In the previous market environment, we were lucky because we raised a lot of money and had enough money to support development; The current industry is no longer a state of vicious competition, the entire market is much calmer, there is less hot money, and everyone is more willing to make products steadily. As the CFO of FITURE, Zhao You is well versed in capital trends and has a lot of emotions after experiencing the ups and downs of the industry.
According to Zhao You, in addition to home fitness, FITURE, which has actively slowed down overseas expansion, has extended to the school's physical education scene with "small steps and fast running".
Capital ebb tide, big waves rushing sand, smart fitness track is returning to rationality, but also more mature.
No longer clinging to the terminal magic mirror "breaks" the magic mirror
Since the first magic mirror came out in 2020, the interaction of professional content + AI technology in fitness guidance made the eyes of the market at that time shine. Since then, because it has solved the needs of consumers for home fitness during the epidemic, online fitness has become a national trend.
As a result, more exercise options began to fill the gap in the home fitness field. Among them, the explosion of Liu Genghong's live broadcast room has made this way of paying more attention to social networking and clock-in sports gradually become a topic of discussion after tea and dinner, and attracts sports enthusiasts to check in.
In recent years, home fitness + social networking has become a trend Image source: Photo provided by the company
Players in the fitness field have also begun to think about the balance between the social attributes of fitness and professional needs.
"We have actually been considering the solution of small screen mobile phones for a long time, and Liu Genghong's explosion is equivalent to pushing us and speeding us up." Zhao You told reporters. Prior to this, FITURE community users have raised the need to follow fitness on the small screen due to business trip or residence vacancy restrictions, residential scene changes, etc.
FITURE STUDIED THE MOTION PATTERNS IN THE LIVE ROOM. From a professional point of view, the live room movement is more inclined to present the course to the user, but cannot interact with the user. INTERACTIVE FEEDBACK IS EXACTLY WHAT FITURE ATTACHES THE MOST IMPORTANCE TO. This creates a paradox.
Mobile small screen + AI, is a mobile phone application that FITURE is about to open beta recently. Zhao You said that although this application does not require hardware, it is more difficult to develop than the magic mirror. The reporter learned that the preparation time of this software exceeded a year and a half.
"Although it is easier to present the 'look' on the mobile terminal, we use embedded AI for all our content to guarantee the experience. So many mobile phones on the market have not appeared AI-supported interactive content, mainly because there are many mobile phone brands and models, and the computing power of different brands and models of mobile phones may not necessarily support AI experience. Zhao You said.
The application on the mobile phone is lighter, and one of its strategic significance to FITURE is to lower the threshold for users.
Since the release of the first magic mirror in October 2020, FITURE's hardware terminal has been iterating, and the "Daily Economic News" combed and found that a total of 5 generations and 6 magic mirrors have been launched in FITURE3 years, covering the price range from 8,000 yuan to 3,000 yuan. This upcoming mobile phone trial version, the price is within 500 yuan.
FITURE said that it hopes to attract more people to start personalized training with interesting and professional courses first, so as to attract users to further choose Magic Mirror and other sports and fitness solutions provided by FITURE.
The pricing of this product is the "lowest ever" of the FITURE product line. Zhao You calculated an account, the cost of high-quality courses and coaches on the FITURE platform for one year is only the fee for 3 offline private lessons, so this price is cost-effective.
For the industry, there are voices that believe that there is a gap between the use effect of small screens and magic mirrors, and Zhao You frankly said that this gap does exist.
"Our mobile app is designed to adapt to users' multi-scenario fitness needs, and we hope to have a lower threshold and higher convenience, so as to better undertake the fitness needs of users when they are on business trips and cannot face the magic mirror when they are outdoors." Zhao You said.
The release of this new product can be seen as the first time FITURE has shown the outside world the ability to interact on other terminals after leaving the mirror. For FITURE, if it can survive without hardware, then FITURE can go deep into the scene it wants to cover in any form.
At the beginning of its establishment, FITURE hoped to cooperate with different scenarios (mostly B-side channels) to influence consumers and generate revenue. At that time, the scenes were divided as follows: home, travel, office and other scenes, so FITURE cooperated with Ctrip, Huazhu Hotel, some companies, and office buildings.
In fact, this time out of the mirror and adapted to the mobile terminal, FITURE is equivalent to a different way of playing: weakening the concept of the scene and using the mobile phone to directly meet the personal needs of C-end users in different scenarios.
The reporter learned that in the FITURE background data, the top three more popular scenes, in addition to home, hotel wine and tourism, there is also a new growth point is campus physical education.
Youth sports are in line with the national strategy and are also an incremental market. For this big cake, FITURE hopes to migrate its interaction capabilities to display terminals such as school screens to provide digital solutions. The reporter of "Daily Economic News" learned that at present, FITURE's cooperation with nearly 100 schools in Beijing, Shanghai, Hangzhou, Chongqing, Chengdu and Hefei is advancing.
This time, FITURE is no longer limited to mirrors on physical hardware, and may be summed up by Apple's advertising slogan: Your next computer, why a computer.
Isn't there a temptation to monetize traffic?
At present, FITURE's revenue comes from two aspects, one is hardware revenue, and the other is membership fees. The revenue generated by the mobile version released this time is also considered a membership fee. "Consumer goods are not currently considered as a way to monetize traffic." Zhao You said.
Is there no temptation to monetize traffic?
Zhao You classified this as a "methodology" problem: "We are still focusing on user experience, so our user experience monetization method is relatively unique, that is, the solution on the magic mirror product." (Traffic monetization) mainly depends on what users need, if users want this thing, I believe we will do it. ”
In the past three years, despite the constraints and market environment, the sales of FITURE Magic Mirror have also continued to rise. At present, FITURE has covered more than 300 cities, more than 100,000 families, and more than 150,000 users across the country. Users who use FITURE Magic Mirror have completed more than 4 million exercise check-ins, which is equivalent to the annual exercise check-in times for all members of 2,000 offline traditional gyms. Among them, the core user group of FITURE completed more than 14.6 courses per month.
The fact that these high-value users participate in training frequently is not eager to monetize, and comes from two judgments at the same time.
First of all, the previous financing has made FITURE's funds still "very abundant". Zhao You's previous "luck" is that the previous capital competed to participate in FITURE's project, completed 4 rounds of financing in less than three years after its establishment, and in the B round of financing in April 2021, FITURE received an industry record of $300 million in financing.
Although the company was pushed to the forefront of public opinion last year due to the trend of "layoffs", Zhao You insisted that this was the company's "normal optimization", and stressed that the company has had abundant capital flow so far and no new financing needs. But the company is indeed more cautious in expanding overseas. "The bulk of the money spent at the moment is in research and development."
It is said that FITURE's current R&D personnel account for 70%, which includes both software R&D, hardware R&D, AI R&D, and important content R&D.
In addition, FITUR has made its own judgment on traffic change by studying the data of the "first mover" Keep.
According to Keep's financial report, its private label sports product revenue was 466 million yuan, a decrease of 9.5% compared with 515 million yuan in the same period last year. In terms of membership subscriptions and online paid content, Keep's revenue in the first half of the year increased by 10% year-on-year to 449 million yuan.
"The proportion of revenue from Keep membership fees is rising, and the proportion of revenue from commodity parts is declining. Therefore, we believe that users are paying more and more attention to fitness services. Zhao You said.
Zhao You told reporters from a financial perspective: "In fact, the capital market is also very willing to see such a company (as user experience). So now the point is to do a good job of the company first and find the right way. We firmly believe that the road to user experience must be passable. ”
Being a good company is not easy. Catalyzed by the epidemic in 2021, dozens of companies in Shenzhen are studying fitness mirrors. At the end of 2021, more than 10 companies in the field of smart fitness mirrors had more than 20 financings. But at present, there are few brands left.
Zhao You said that in previous years, when the market environment was good and money was relatively abundant, the market was inevitably shrouded in impetuosity, and it was more common to take financing to run the scale, and change profits after making a brand.
But after the hot money retreated, this model did not work. It is also because the market is "cold", and in the field of the fitness industry, there are more "huddles and warmth" between brands.
"After the current market has calmed down a lot, I feel that brands in the industry are focusing on their own development, and everyone does not want to enter a state of vicious competition. This year, our feeling is that the willingness to cooperate in the industry is increasing, and we are more willing to polish products steadily. Zhao You said.
At present, FITURE's cooperation in the B-side, in addition to the traditional gym Wales, is also cooperating with professional sports brands for teenagers such as Golden Ballet, Ctrip and other platforms to continue to deepen more scenes.
Overseas Opportunities and Industry "Crisis"
The new mobile phone application polished by FITURE is also one of the ways FITURE hopes to open up overseas markets.
In a previous conversation with the "Daily Economic News", Zhang Yuansheng, founder and president of FITURE, once said that FITURE's layout in overseas markets focuses on the United States. However, due to logistics and transportation during the epidemic, overseas expansion has been slow.
This new product relies on the user's mobile phone to provide services, solving the uncertainty of hardware going overseas. The reporter learned that the mobile phone version will be released in China, tested and optimized before being put into the international market. Zhao You expects that FITURE's overall overseas layout will speed up a lot.
Zhao You also revealed that FITURE's overseas trip this year will also pay attention to Southeast Asia and even the Middle East. But on the whole, FITURE's current overseas expansion is no longer a proud expansion, but more inclined to "test the water in small steps".
"Different overseas regions have different fitness culture and consumption power, and we are constantly exploring the real core needs of different markets, but the mobile version will promote our overseas expansion."
As CFO, Zhao You admits that overseas "investment is limited". Last year, FITURE wanted to go to the US market to develop, one of the purposes is not to avoid the edge of home fitness "originator" MIRROR, hoping to compete on the same stage. UNEXPECTEDLY, MIRROR WAS REALLY IN A BAD SITUATION LATER.
MIRROR was acquired by Lululemon in 2020 and gradually disappeared from Lululemon's earnings report after handing over a report card of $170 million in revenue that year. After subsequent repositioning and renaming it to Lululemon Studio, the price of MIRROR was also cut by nearly 90% by Lululemon and may be sold again.
Peloton Interactive (PTON.US, US$5.4 per share, total market value of US$1.928 billion), another representative brand specializing in smart hardware, is also in a difficult situation, encountering 5,000 layoffs, four executive changes, 2.2 million bicycle machine recalls, and a cliff-like decline in stock prices in recent years.
The industry generally believes that Peloton's cliff-like decline, including MIRROR's dilemma, is the result of the fading popularity of home fitness.
FITURE HAS A DIFFERENT VIEW.
Zhao You took Peloton as an example, he believes that its market value is affected, more because of the company's own operation, and has little to do with the track itself.
"The biggest impact on Peloton is the core product treadmill and bicycle, there are a series of safety problems. In the end, the main founder team was almost completely replaced, which also made a great change in the strategy of the entire company, but such a change is actually a very small probability event for the company. BUT YOU ALSO HAVE TO SEE THE ADVANTAGES OF PELOTON'S OWN BUSINESS MODEL, INCLUDING THE PAYMENT OF PLATFORM CONTENT, AND THEIR (USER) PAYMENT RATE IS STILL VERY HIGH. ”
FITURE analyzes MIRROR's business, studies PELOTON's development model, pays attention to Keep's earnings report and analyzes its development path, but it does not seem to be in a hurry about the speed of its own IPO and shareholder returns.
Zhao You said that he felt that investors had been relatively "calm and not urged at all" in the past two years. He told reporters that the clear signal is that capital pays more attention to the "blood-making" ability of startups, no longer requires you to bear losses with high-speed expansion, but cares more about whether you can achieve considerable growth under the condition of profitability.
"We have all become more confident in the capital markets, but everyone also understands that it will take time and there is no rush. So shareholders give us more time. Zhao You said.
When it comes to FITURE's core capabilities in the future, it is still interactive content, and in the future, FITURE will continue to focus on the four keywords of "hardware + content + service + AI", hoping to rely on "product power" to speak.
A "market gap" that cannot be ignored is that whether it is national fitness or online fitness, it is not well digitized, users do not have enough channels to obtain their full life cycle training, and they cannot find anyone to help him use data analysis to do next.
"I think these can be improved in the entire fitness industry, this is not a pure online or pure offline enterprise can do, but also FITURE hopes to have more cooperation with offline around user data in the future." Zhao You told reporters.
Compared with IPO, how to carry out data and intelligent management of the whole life cycle of users is what FITURE wants more in the next step.
Daily economic news