Thursday, October 15, 2020

2600+ gyms closed down, and Peloton's stock price soared 7 times in half a year, when home fitness was in full swing

 The Bay Area just passed a new regulation a few days ago:

Even after the epidemic, it is mandatory for large companies in the Bay Area to require at least 60% of their employees to work remotely from home three days a week by 2050.

Image source: Twitter

Although the WFH home office model has become popular under the epidemic, due to the lack of working atmosphere, it is difficult to coordinate and cooperate, low efficiency, and health effects are often complained:

"When working from home, there are more and more meetings, the boundary between work and entertainment disappears, the pressure is greater, and the anxiety is more."

"We can't work from home indefinitely. Long-term work and life are lazy. Inactivity or lack of physical activity can make people very weak."

"Working at home is not a sustainable way. Sitting for a long time leads to a decline in body function, which affects muscle strength, metabolic rate and sleep habits."

"Since working from home for four months, the frequency of migraine and back pain has increased"

It is said that the body is the capital of the revolution. To some extent, the home office model also makes people pay more attention to the importance of health and the necessity of exercise than before, and subsequent new trends in fitness are quietly affecting the iterative update of the entire fitness industry.

1 The unsustainable traditional American fitness industry with a huge loss of 13.9 billion

The epidemic has affected many industries, and the fitness industry is deeply mired in mud.

According to the latest data from the International Federation of Health, Sports and Clubs (IHRSA), as of September 1, 2020, the number of fitness venues in the United States that have been permanently closed due to the impact of the new crown epidemic has reached 2,616, and the cumulative revenue loss of the US fitness industry Has exceeded 13.9 billion US dollars.

Many American gym chains have declared bankruptcy or are considering bankruptcy or layoffs.

Gold's Gym, a 55-year-old American gym, filed for bankruptcy protection in early May, and permanently closed its 32 stores, and disclosed a debt of up to 100 million US dollars. Then in July, it was acquired by the German fitness company RSG Group and was forced to change its nationality.

24 Hour Fitness, a large-scale fitness chain in the United States, suffered a serious blow. It closed 130 of its direct-run gyms in the United States, and was later acquired by the Asian consortium Inspire Brands Asia (IBA).

Town Sports International, a fitness giant with 185 different brands of fitness clubs in New York and Boston, and a total of more than 600,000 fitness members, filed for bankruptcy protection on September 15 because of the break in the funding chain caused by the epidemic.

FlyWheel, the second largest boutique bicycle fitness studio in the United States, recently filed for bankruptcy protection and announced the permanent closure of 42 of its bicycle studios and laid off more than 1,200 staff.

In-Shape Health Clubs, a chain of fitness clubs in California, is currently looking for a debt restructuring plan. It is reported that In-Shape's debt is nearly 70 million US dollars. Before the epidemic, In-Shape owned 60 clubs. Affected by the epidemic, as of October 5, only 22 clubs had been reopened, and the indoor capacity of some clubs was only 10%.

In order to call for resumption of work, American fitness enthusiasts protested on the streets and collectively petitioned.

The New York Fitness Alliance and the Boutique Studio Alliance represented more than 2,000 fitness venues and filed a lawsuit against the New York City Government and the Mayor, dissatisfied with the government’s regulations not allowing indoor fitness classes to start.

Based on this dilemma of the traditional fitness industry, the US government has introduced a series of plans for the fitness industry.

The "Health and Fitness Recovery Act of 2020" jointly launched by the U.S. Democratic and Republican lawmakers recently will set up a $30 billion recovery fund to help offline gyms in the United States affected by the new crown epidemic to tide over the difficulties. Once the bill is passed, the US government will grant 30 billion US dollars to fitness companies in the form of subsidies.

2 Capital is accelerating to enter the market, home fitness is so popular that Apple can't sit still

With the changes in the sports fitness scene, home fitness and virtual online fitness programs ushered in a wave of craze. According to Crunchbase data, as of press date, the total financing of fitness-related companies in 2020 will exceed $3 billion.

Traditional fitness brand: Develop online fitness and deepen paid content

Countries affected by the epidemic around the world have gradually banned or restricted gym operations, and many offline gyms have quickly turned to online live fitness.

Equinox and SoulCycle, American top fitness brands, jointly launched the online fitness App Variis for offline members.

Planet Fitness has more than 2,000 chain gyms across the United States, closed all offline stores, and launched the #宅家健身# column online and released it on Youtube, Facebook and other platforms.

As the representative of the Internet streaming fitness platform, iFit is a streaming media subscription fitness platform under ICON Health&Fitness. ICON has a 42-year history and is headquartered in Utah, USA. Since the 1980s, ICON's product line has continued to extend, from fitness equipment, sports nutrition products, fitness magazines, to professional running shoes.

There are more than one hundred world-class fitness coaches including Olympic athletes, professional athletes, and biomechanics experts on the iFit content platform. Users on the platform can choose from more than 1,500 exercise methods and interact with iFit coaches and smart coaches. There are many interactions between fitness equipment.

From October 1st last year to September 30th this year, ICON revenue exceeded US$1 billion, and the paying users of the iFit platform doubled from more than 300,000 to nearly 700,000.

iFit received a US$200 million strategic investment led by Pamplona Capital Management in December last year. On October 7, ICON announced that it had received a new US$200 million investment led by L Catterton, the world’s largest consumer-focused private equity firm. Investor Pamplona also continued to follow suit.

Home fitness giant: equipment-content-community model recognized

The global outbreak has allowed fitness equipment manufacturers to enjoy the "breaking lucky" bonus. Companies like Peloton took advantage of the epidemic to climb rapidly and became star companies in the U.S. stock market. From $20 in March this year to $130 today (as of October 13), their stock prices have risen nearly seven times.

The latest financial report shows that the latest fiscal quarter (until June 30 this year) revenue was 607.1 million US dollars, a year-on-year increase of 172%. This is the first profitable quarter in Peloton's history.

Apple launched a new online fitness subscription service Fitness+ for $9.99 a month at the September press conference of this year, competing for fitness customers online, Peloton CEO was crazy by the media, and also explained fitness equipment, paid content, and community from another perspective. The combination punching method is recognized.

As the world's first fitness mirror brand to provide "hidden form" home fitness solutions, Mirror was acquired by fitness apparel giant Lululemon for US$500 million in July this year.

Mirror's revenue reached approximately US$45 million last year and is expected to exceed the US$100 million mark this year. The acquisition of Mirror also enhanced Lululemon's digital and interactive capabilities, deepening its foundation as an experiential brand. During the epidemic, more than 170,000 users participated in Lululemon's Instagram live courses.

In-depth fitness: high threshold professional fitness is popular

Tonal, headquartered in San Francisco, is committed to building a smart home gym, featuring a strength training system. Weight training of dumbbells and barbells can be achieved through a wall-mounted digital strength system.

This kind of higher threshold household product equipment has been verified by capital in the US market. In September of this year, Tonal, an American home-use smart strength training device, announced the completion of a series D financing of US$110 million. Investors include L Catterton, Amazon's Alexa fund, and two NBA stars Stephen Curry and Paul George.

The US company Zwift, which completed a new round of US$450 million in financing in September, focuses on bicycle enthusiasts. This round is led by KKR, followed by Permira, Zone 5 Ventures and others.

In addition to riding training and riding with friends, one of the highlights of Zwift is the ability to play against professional teams on the platform, such as the Wiggins team founded by the 2012 Tour de France champion Wiggins. Zwift hosted the virtual Tour de France in July this year. The official Tour de France organizer is the partner of the event, and 117,000 riders participated in the competition.

VR fitness: integrate into games, fun to drive sports

As one of the biggest competitors in the VR fitness ecosystem, British company FitXR announced in July this year that it had completed a US$7.5 million Series A financing led by Hiro Capital, including US$6.3 million in investment and 1.2 million from British government agency Innovate UK U.S. dollar loans, and other investors such as BoostVC, Maveron and TenOneTen Ventures.

The company currently has only one product-BoxVR, a boxing rhythm game designed for fitness, which is used in VR headset devices. According to a data from the platform, more than 50,000 users purchased the application within a year.

Serving fitness content creators: high-quality original content is productivity

Playbook is a new fitness content creation platform company co-founded by Jeff Krahel, Kasper Odegaard and Mike Radoor in 2016. The company serves fitness content creators, aiming to help them promote fitness content videos and find a wider user base.

Today (October 14), it has just completed $9.3 million in Series A financing, and completed a seed round of $3 million in June this year. Investors include Porsche Ventures,, and UpHonest Capital.

Playbook offers a subscription service of $15 per month or $99 per year. Users can watch various sports videos and learn more fitness content. Playbook will charge 20% of customer fees, and the rest will be given to creators.

Moreover, Playbook does not only focus on fitness activities. There are more than 150 professional sports trainers on this platform who will provide training content for various sports, including physical training and technical training.

Home fitness in China: a late start but rapid development

Compared with Europe and the United States, China's home fitness market is broader. The huge A round of financing announced by FITURE a few days ago is also very eye-catching. This home fitness brand startup company, which has only been established for one and a half years, is currently valued at more than 300 million US dollars. Last week, it announced the completion of a US$65 million Series A financing led by Tencent, setting a record for Series A financing in the global fitness industry.

The A round of financing was led by Tencent, and C Capital, Cathay Capital, Black Ant Capital, CITIC Industry Fund, Bertelsmann Asia Investment Fund, All-Star Fund participated in the investment, and the angel round shareholder Sequoia Capital China Fund launched the company in August last year. The 6 million U.S. dollars invested during the half year of its establishment has continued to invest in this round.

FITURE positioning is neither a hardware company nor a fitness platform, but a company that provides users with one-stop home fitness services around fitness experience. The previously exposed intelligent strength training equipment FITURE Power is similar to Tonal.

From the FITURE official store, "Magic Mirror" is the main product, which is almost the same as the American fitness mirror project Mirror. It mainly provides AI fitness services to implement user exercise tracking functions and gives guidance and feedback. Course types cover HIIT, strength training, yoga, dance, etc.

The current price of Magic Mirror hardware is RMB 9,800, which is almost the same as the market price of Mirror of USD 1,495. The annual subscription fee for fitness courses is 1188 yuan, and the audience is also targeted at middle-class fitness groups, which is also consistent with Mirror's positioning.

Magic Mirror is mainly for light fitness users, and FITURE Power is for mature fitness users. The common barriers of these two products of FITURE are AI intelligent interactive technology, hardware products and coach training courses. FITURE, a kind of smart hardware for China's relatively traditional fitness market, can naturally get the capital's heavy blessing.

As a domestic smart fitness solution provider myShape that also adopts a "mirror" form in fitness hardware products, it is also actively mass producing its new smart AI fitness mirror products, aiming to benchmark Mirror.

This mirror product of myShape adds an "intelligent AI fitness coach", which can capture the user's body 3D movement data in real time through the 3D deep learning camera built into the fitness mirror, and real-time feedback to correct wrong movement movements.

According to company reports, myShape has launched a global version of the fitness mirror. In addition to the Chinese market, the European, Asia-Pacific and American markets have created tens of millions of revenue and expected orders of more than 100 million yuan for the company.

3 Data blessing, how to optimize the software and hardware experience

In many fitness equipment products, the hardware forms are similar, providing users with accurate and good sports interaction and immersive experience is the key.

And the development of home fitness in China is facing the problem of "exercise enthusiasm".

According to data from the American Fitness Association IHRSA, there were 3.7 million regular exercisers in China in 2018, with a penetration rate of 0.8%. This figure is far lower than the average of 3.84% in the Asia-Pacific region, and only higher than India and Indonesia, ranking third from the bottom.

The number of gyms in the United States is 10 times that of domestic gyms. With a total population of nearly five times lower than that of China, the population of fitness in the United States is approaching 80 million, which is more than 30 times that of China.

Also in the fitness industry, "sports against human nature" itself is a problem to be solved. Only by improving user experience can user stickiness be increased, making home fitness a real proposition.

Whether the fitness industry can polish the best software and hardware based on real-world scenarios based on data, then it should be the golden age of truly releasing intelligence in the fitness field.

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