KEEP rushes to "the first online fitness", the road is blocked?

The online fitness platform Keep staged a "refuse to fight again" in the Hong Kong Stock Exchange.

After submitting a prospectus to the Hong Kong Stock Exchange in February this year, Keep recently submitted the IPO prospectus to the Hong Kong Stock Exchange and initiated the sprint to the "first fitness of the online fitness".

As a head brand of domestic fitness, the development momentum of Keep has been very rapid in recent years, but its financial situation with rising rates and increasing losses has been criticized, and business models have also been questioned. From the perspective of the industry, the problem of profit is the bottleneck that Keep needs to break through, which also draws a question mark for Keep's results of the results of the Hong Kong stock market.

It has become the largest online fitness platform in China

Keep has grown rapidly since its establishment.

In 2015, Keep was launched. With artificial intelligence -assisted personalized training programs (covering interactive live broadcast classes and recording and broadcasting classes), it provided users with extensive and professional fitness content. At that time, the content of lack of content and lack of fitness standardized resources at the time rose rapidly. Less than a year after the launch, the number of users exceeded 10 million, and Keep quickly received 5 million US dollars A round A financing and 10 million US dollars B financing.

Since then, Keep has gradually extended the business landscape to more fields such as smart hardware, health foods, offline gyms, etc., and proposed to pass online and offline, and provide users with one -stop sports solutions around "eating and wearing practice". In the capital market, it goes smoothly. Tianyancha shows that as of now, Keep has made a total of 8 rounds of financing, with a cumulative over 600 million US dollars.

However, Keep's way of listing can be called twists and turns. In fact, as early as February 26 this year, Keep had launched an impact on Hong Kong stocks, but did not pass the hearing of the Hong Kong Stock Exchange within 6 months. Therefore, this time it updated the IPO prospectus again to activate the "failure" state and restart the listing process.

According to KEEP's latest prospectus, as of the first quarter of this year, the company's own brand sports product revenue was 213 million yuan, accounting for 51%, and the business proportion was the largest. It reached 872 million yuan, accounting for 53.9%. Its second largest business sector is member subscription and online payment content. In the first quarter of this year, revenue was 161 million yuan, accounting for 38.6%; advertising and other businesses accounted for 30.4%and revenue was 43.28 million yuan.

"It is not difficult to see that the realization of Keep is already very rich. Among them, compared with member services of other software, its membership value -added services are also richer, such as live -broadcast classes and home equipment. Analyst Jin Yesi said in an interview with the China City Newspaper reporter that as far as the current market is concerned, the user base is large, coupled with relatively mature courses and hardware research and development teams, Keep is the top in China.

In addition, the number of monthly active users is the part of Keep. In the first half of 2019, 2020, 2021 and 2022, the average number of monthly active users (including paid and non -paid users) of Keep was 21.8 million, 29.7 million, 34.4 million, and 37.7 million. In the first half of this year, Keep's monthly active users contributed about 1.7 billion and 1.1 billion times. In the prospectus, KEEP quoted the data of the Burning Consultation Report that the number of exercises completed by the active users and users monthly was calculated, and Keep was the largest online fitness platform in China.

At the same time, the penetration rate of members of Keep during the 3rd years has also risen. This indicator rose from 3.5%in 2019 to 9.5%in 2021, a year -on -year increase of 6 percentage points. The 30.5 yuan rose to 47.1 yuan in 2021. Another prospectus shows that from 2019 to 2021, Keep's revenue was 663 million yuan, 1.107 billion yuan, and 162 billion yuan, respectively, and gross profit was 273 million yuan, 499 million yuan, and 677 million yuan.

Continuous losses, profitability is still urgent

Although the number of monthly active users and the number of monthly subscribed members increased, the problem of difficulty still plagued Keep.

According to its prospectus, the annual loss of Keep in 2019 reached 735 million yuan, and the annual loss of Keep the following year expanded to 2.244 billion yuan, and further expanded to 2.908 billion yuan in 2021. In the first quarter of this year, although Keep's losses were narrowed compared to the same period last year, it still reached 252 million yuan. In summary, the cumulative loss of Keep, which has not yet been listed, has exceeded 6.1 billion yuan.

In fact, as a online sports technology company, Keep has the "burning money" common problem of Internet companies. China City Daily reporter sorted out Keep's financial report in the past three years and found that it has been a matter of publicity. According to the financial report, from the first quarter of 2019 to 2022, Keep's sales and marketing expenses reached 296 million yuan, 302 million yuan, 956 million yuan, and 147 million yuan, respectively, accounting for 44.61%, 27.26%, and 59.04, respectively. %And 35.26%.

In this regard, Keep stated in the prospectus that strategically increased the expenditure of traffic acquisition and brand promotion to further acquire, activate and retain users.

You know, fitness products are non -consumption products, and consumers have a low frequency of buying. For Keep users, it is difficult to produce the repurchase rate. Therefore, it is difficult for Keep users to contribute to lasting purchasing power. This means that Keep needs to continue to expand new users. The cost of customer acquisition has risen year by year, and the customer retention rate of Keep has also decreased. The prospectus shows that from 2019 to 2020, the monthly average membership retention rate of Keep was 70.8%, 73.3%, and 71.7%; in the first half of this year, the indicator further decreased to 69.4%, falling below the 70%mark.

Therefore, although Keep has been expanding diversified business as much as possible, the profit problem in front of it is still urgent. In this regard, Keep has also been trying to crack, such as continuously expanding the market and user base, including attracting users of different ages, interests, and places. The content, as well as measures such as 4 to 5 new smart fitness equipment models in the second half of this year.

In the industry's opinion, "burning money" is not a long -term plan. Keep must find a benign and sustainable strategy in the future to achieve the purpose of attracting new users, retaining old users, and driving users. While building its own moat, it also introduces the profit model into a healthy track.

Find a way out in fierce competition

In April of this year, singer Liu Genghong relied on the audience to jump to the entire network on the Douyin platform. Fitness once again became a hot topic. In fact, before that, policy guidance had added a handiconal firewood to the temperature of the fitness industry. The "National Fitness Plan (2021-2025)" issued by the State Council last year clearly stated that by 2025, the proportion of population often participating in physical exercise will reach 38.5%.

Today, onlineization is an irreversible development trend of the fitness industry. According to the report issued by Burning Consultation, as of the end of 2021, the scale of China's fitness market reached 786.6 billion yuan, of which 47%of the online fitness market accounted for 47%. At the same time, according to its expectations, the proportion of online fitness markets in 2022 will exceed the offline fitness market, and by 2026, the online fitness market will account for more than 60%.

Although the fitness market has a "big cake" visible to the naked eye, it is not easy to share a piece of business.

"In recent years, my country has successively introduced a number of policies to promote and encourage the innovative development of the sports and fitness industry. With the improvement of mobile Internet technology, the continuous optimization of online sports APPs, and the gradually enhanced national health awareness, coupled with the impact of the new crown pneumonia epidemic situation Home fitness has become an important choice for national fitness. "Senior economist Deng Zhidong predicted in an interview with the China City Newspaper reporter. Under the promotion of policies, technology and capital, my country's online fitness industry will continue to show rapid development momentum in the future.

Independent economist Wang Chikun admits in an interview with the China Urban Daily reporter that the development and maturity of software and hardware technologies such as 5G, artificial intelligence, big data, AR/VR, etc., making it more comfortable, more convenient, smarter, more beautiful, more refined More diversified fitness smart products are likely to be put into production. "Next, domestic sports and fitness brands will also rise and obtain industry development dividends and industrial transfer dividends. The domestic smart fitness equipment track will also copy the development model of Peloton, an American stock interactive fitness company in overseas markets."

It is understood that Peloton is a startup company that focuses on family fitness and is known as "online fitness giants in the United States." Its business model is almost the same as Keep. In addition to the combination of "hardware+software" into a closed -loop effect, it also makes the family the best fitness scene through marketing.

However, the market space is wide and accompanied by the industry's Red Sea, and the online fitness market will return to rationality. Keep acknowledged in the prospectus that China's online fitness industry has developed rapidly and increasingly competitive, and all aspects of Keep business are facing competition.

To cope with the fierce competition in the industry, Keep tried to regain the offline fitness market. In February of this year, Keep announced that it will increase investment in offline scenes. Through preferred fitness hall plans to cooperate with traditional gym operation groups, even if the traditional gym is used in a certain period of time, Keep will provide coaches, courses and group lessons. In addition, Keep also revealed that it will increase its efforts to expand its business to low -line cities in China.

According to industry insiders, most of the development trajectories of Internet companies are based on the continuous iteration of new technologies, continuous creation of new scenes, and continuous improvement of mobile Internet penetration. To develop a new field, it is always time to withstand the pain of losses. Whether Keep can be used as a "online fitness first share" still takes time and market considerations.

■ China City News Reporter: Zhang Yaxin

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