author: Tingting brave world, Editor: Li Tuo, head Figure from: Vision China
Keep officially announced the completion of the $ 80 million E round of financing at the beginning of the year. According to Sina Technology, Keep ’s valuation has exceeded $ 1 billion after this round. Prior to this, Keep completed a total of six rounds of financing, accumulating a total of 187 million US dollars, the last round of July 2018 led by Goldman Sachs led 127 million US dollars in D round of financing.
In the past two years, Keep heavily bet on Keep APP, KeepKit, smart hardware, and Keepland, an offline sports space, and other multi-dimensional scenarios. Resources are scattered, inventory is increasing, and commercialization is not ideal. At the end of 2019, the growth of Keep users slowed down and retention declined, and the news of “10.24 layoffs” and the closure of many offline stores have been reported.
Previously, the first article of Keep ’s former trumpet “Keep ’s Dilemma and End” exploded the entire network overnight, reflecting the industry ’s focus on Keep. After the epidemic, users who ban their feet at home have more free time and fitness awareness.
So, is Keep getting better?
This article will analyze some changes of Keep after the outbreak of Black Swan from several perspectives such as product data, business model and possible future.
1. Product: Why the epidemic saved Keep
Keep working hard to rush up the data throughout 2019. After the summer peak season passed, after the slowdown of centralized traffic delivery, Keep’s new data dropped after September, and the retention was not ideal. Keep’s revenue model has not been completely smooth, and the decline in data and unsatisfactory retention have all formed part of Keep’s anxiety.
The black swan reversed the situation. After the epidemic, Keep ushered in a surge in data.
Keep Daily Active Data Source: Aurora Big Data
It can be clearly seen on the Keep Daily Active User Curve that with the Spring Festival as a node, a very steep line directly rushed to the peak, and the increase even exceeded the data of last summer’s heavy channel. As you can see from the chart above, the increase was the most dramatic from January to February. After March, the data on the skyrocketing began to show a downward trend.
Keep 7-day retention rate Data source: Aurora Big Data
Keep ’s 7-day retention curve shows that although the retention rate is slightly lower than in 2019, too fast growth will also affect the retention rate. Compared to the same period of May 2019 on the left side of the curve, the roller coaster-like unstable peak canyon data is much better.
Keep users use time data source: Aurora Big Data
With the passage of time, the resumption of business and the restoration of the order of life in most cities, the length of use of Keep users began to decline slowly after a surge. This is also scientific, users start to work, and the surge caused by force majeure factors cannot last forever.
Even so, the general trend is that the entire health and sports industry is on the rise. The epidemic made users perceive the importance of health. Willing to spend time for health and willing to spend money. Several other products in the health and fitness industry have also experienced substantial growth. Some teams that sell fitness and weight-loss courses online revealed that their paying users have surged by 300%.
Some entrepreneurs in the health field say Keep is lucky. Keep laid off staff and closed stores last year, reducing operating costs to some extent. After the epidemic, the enthusiasm of the national movement soared, and Keep and the entire health industry ushered in a good time.
2. Business: What kind of stories does Keep tell investors?
According to the capital circle, Keep E round financing is based on the brand positioning of the country’s first sports and lifestyle, and it tells the story of the brand. $ 80 million financing is led by Time Capital (Jeneration Capital) , GGV Jiyuan Capital, Tencent, Morningside Capital and BAI (Betasman Asian Investment Fund) and other old shareholders follow suit.
A few months ago, during the internal communication between the leading investors and Times Capital, they began to hold a discussion meeting with Keep up against Peloton.
Peloton, an American interactive fitness platform company, went public on the NASDAQ last year, and its market value once exceeded the $ 10 billion mark. The emergence of Peloton has provided a new perspective and new pricing for fitness practitioners and investors around the world: with the concept of new fitness models such as intelligence, integration of software and hardware, and monthly payment, the threshold of sports is reduced, and streaming media And services increase user stickiness, quickly complete growth, financing and expansion.
Keep told a good story in the E round of financing. As the number one company in China’s fitness track, they also have a good vision: In the future, Keep will continue to expand the service dimension of sports solutions. Through richer content and products, we will continuously improve the closed loop of sports services to help more people Really move.
3. Hidden worries: Keep is difficult to copy Peloton mode
But now, there are still many problems in front of Keep. National conditions, culture and soil are different, and business logic and user mind are different.
Peloton ’s high market value is because this company ’s set of concepts from hardware to products to services are all new and closed-loop. They have expanded fitness, fitness equipment and fitness services through online fitness streaming boundary.
First of all, in terms of business model, Peloton is a very healthy company. 80% of their revenue comes from their hardware. First made money by hardware priced over US $ 2000, gathered users, and then made follow-up services, membership and streaming media to earn the remaining 20%. The user’s brand identity and the strong binding of software and hardware determine the user’s stickiness is very good.
Secondly, Peloton’s target user group in the United States is the middle class. Therefore, they shaped the brand as a middle-class friend and helped users create a concept of life. From hardware, to products, services, environmental atmosphere, and then to the choice of courses, the choice of teachers, and even the selection of background music, all create a strong consumer brand that is completely suitable for the middle class.
Finally, Keep is in a completely different environment. At first, Keep started with free software. Businesses pay for services that users may not understand. Or understood, but the paid conversion rate is very low. To put it bluntly, you like Keep, but you don’t spend money on it. At home, it is difficult for a company to sell hardware to more than 2,000 US dollars.
Keep ’s large-scale smart hardware has a pricing range of RMB 2,000 or RMB. It often promotes and issues discount coupons, but sales are far from being able to reversely deliver streaming content to users and affect a certain largest sample group. Keep’s clothing and fitness accessories are more priced, but if users have a budget of more than a hundred dollars, they turn around and go to Ole to buy discounted Adinike.
Keep user age distribution Data source: Aurora Big Data
In the United States, the purchase of Peloton ’s products and services is a symbol of identity. With the Peloton label, it proves the ability to consume more than $ 2,000 in branded hardware. But in China, no consumer brand can replicate the Peloton model across the ocean. For Keep, whose main user group is 16-25 years old, they still have a long way to go in a short time window.
4. The future: Keep will usher in a crucial year
For Keep, after getting a new round of financing, how to solve the problems of growth and commercialization in a limited time has become an important proposition for Keep.
As the weather gets hotter, fitness applications will usher in a peak season. The channel side shows that, after stopping the launch last year, Keep has resumed the launch of Android channels such as OPPO and vivo.
In commercialization, stores in some cities were closed before the Keep festival. The positioning of the next offline business strategy is also worthy of attention. In Keep’s online business, the main ones that can bring cash flow are e-commerce and member products. Keep’s e-commerce business is relatively heavy, with many SKUs and increasing marginal operating costs; on the product side, in addition to the user’s mental brand identity, the e-commerce conversion funnel is too deep, and it has always been the reason for Keep’s unsatisfactory growth One.
Compared to e-commerce, Keep ’s membership business is a good deal. After the growth of Keep’s active users after the Spring Festival, Keep continues to sell members at a discount. Growth drives revenue and discounts affect revenue. Keep may make trade-offs here. The latter is helpful for the growth of paying users and user retention.
Competitive environment that hurts each other
For a period of time, brands in the fitness industry have continued to hurt each other in different stages of operating strategies.
Essentially, because fitness users are layered and mobile, the number of large markets is approaching the top, and there is bound to be constant tears between friends and businesses for traffic. When the peers paid, Keep did steal a large number of users for free. When Keep grows bigger and needs to pay for commercialization, it quickly feels difficult, becauseStart to do free for peers again. The business competition on the same track involves their own business nature and is irreconcilable.
Keep tried to steal some paying users from other platforms through membership discounts. But Keep ’s own more free users are being diverted by more giant and unicorn products.
During the epidemic, users ’demand for fitness content has skyrocketed, leading to the flow of platforms throughout the network, major video sites, e-commerce sites, and even fresh food distribution sites, which have launched health and fitness content. Although Keep itself has launched a live video course on a third-party platform, the flow and growth of the Keep main client is still a core issue that cannot be avoided.
Environment and user needs are changing
A few years ago, Keep emerged from a period of lack of content and lack of fitness standardization resources. The aggregated fitness courses won a large number of users for Keep. With the development of technology and the enrichment of content, resource aggregation itself is no longer a threshold. While users need content, they may also need interaction and companionship during fitness.
Han Han ’s endorsement of FIT, Super Orangutan, Music Engraving and even very vertical daily yoga have all divided Keep ’s paying users through more subdivided services to varying degrees. The changing needs of new users are difficult to standardize and be met in batches. It is difficult for a big company to achieve in the current big environment.
How to seize the limited time window brought by financing, how to understand the needs of new users, and balance your free business and commercial growth will be an important measure of Keep ’s ability to win the market next.
author: Tingting brave world, Editor: Li Tuo