Economic Observer reporter Xie Chuchu has more than ten fitness mirrors in the Beijing International Trade FITURE store, with different contents, such as martial arts, meditation, aerobic dance, youth exclusive, HIIT…, a pregnant woman and her husband Staying in front of a mirror displayed exclusively for pregnant women, a real trainer is showing the exercise posture on the mirror; another couple in their 60s is attracted by the content of martial arts, and the staff explains the functions and operating rules.
These “magic mirrors”, which look like mirrors and whose pictures are real fitness coaches, are just like the name. They rushed into the fitness track like aliens, received fresh attention, and also encountered IQ tax and false demand. . Offline stores and user experience are the top priorities of FITURE’s development this year, and it is also a response to doubts.
“For the vast majority of people, the category of fitness mirrors is still too new. If you haven’t really experienced this mirror, you can’t perceive that point.” On October 26, Tang Tianguang, co-founder and CEO of FITURE, was accepting The Economic Observer said in an interview.
FITURE, a smart fitness brand founded in 2019, is the “unicorn” of the fitness mirror track. Up to now, FITURE has completed the B round of financing. Investors include Sequoia, Tencent, C Capital, Jinsha River Capital, Legend Capital, Weilai Capital, All Star Capital, Coatue, etc.
The appearance of FITURE is a mirror, but as soon as the switch is turned on, various fitness programs will be displayed on it, covering Pilates, yoga, strength shaping, square dancing, fat-burning fighting, etc. The fitness mirror can capture the body movements of the user during follow-up exercises, and give points rewards similar to games. Recently, FITURE has also developed new functions such as karaoke, smart speakers, voice assistants, and dance machines.
Tang Tianguang said that 95% of the people in China are not “lifting iron” needs, but more about maintaining health, losing fat and shaping. Therefore, FITURE and the gym crowd are not a substitute relationship, but only meet the needs of the latter. Service platforms such as FITURE and Keep stand at different ends. Keep focuses on self-discipline, while FITURE emphasizes allowing each user’s movement to occur naturally.
The layoff incident in August this year once again aroused the outside world’s attention to FITURE, and the voices of IQ tax and pseudo-demand are also overwhelming.
Tang Tianguang explained to this reporter that the company invested a lot in research and development during the product start-up period. When the product matures, more energy will be placed on commercialization and offline store operations. “To give an easy-to-understand analogy: 80% of the entire company used to do R&D and 20% commercialization, but now it’s 50% R&D and 50% commercialization, and offline store sales have been expanding.”
After the personnel adjustment, the most important task of FITURE at the moment is to lay out offline, so that more people can experience the fitness mirror. This is the first good medicine for FITURE’s developmental pain period.
Tang Tianguang said that the churn rate of paying users that FITURE values most is as low as single digits. This has obvious advantages in paid subscriptions for domestic content. Only by allowing more people to access the product and allowing users to start the first step of buying mirrors, can there be the most important next step in making profits, that is, allowing users to continue to use fitness mirrors and subscription services. “The business model we expect is to rely on The latter paid services to make money are not a one-shot deal of mirrors. But the biggest problem at present is that many people have only heard of it, but have not experienced it.”
Entering a stage of high growth
Economic Observer: What stage of development is FITURE currently in? What do you think about the most at this stage?
Tang Tianguang: FITURE should have created China’s smartfitness (smart fitness). We have been in the state of the education market for the past few years, going through the 0-1 start-up period. One year after the launch on October 28, 2020, we completed the verification of whether there is a market, whether there are users, and product and channel matching. It is now in a stage of rapid growth.
Our products are based on hardware and provide users with sports experience products that integrate software and hardware. Therefore, rapid growth refers not only to product terminal sales, but also to user growth.
The brand vision at the beginning of the company’s establishment is to make sports happen naturally in everyone’s life, and to use technology, content and services to make users enjoy the joy of sports. In the past, everyone knew more about some light service platforms on the Internet, similar to Keep. We are completely different ends. They emphasize self-discipline and we emphasize better service.
From the very beginning, we have planned several different product lines, and fitness mirrors are one of them. At present, we have launched 5 different magic mirrors to meet users with different needs. In the fourth quarter of this year, we will also launch the user online function to practice together. At the same time, we are also planning some other products like Power Line.
Our business model is a hardware plus subscription model, and we have always adhered to low gross profit in the hardware part. Because we want to make sports happen naturally in everyone’s life, we will do everything possible to lower this hardware threshold.
So my biggest concern is digital paying subscriber churn. This number actually represents whether the product solves the user’s pain points, meets the user’s needs, and whether the user really uses your product. Right now our monthly churn rate for paying users is in the single digits. In this model of paid subscription, it should be said that it is a number that has done well.
We are now also doing business in China and the United States. Our partners have begun to pay attention to overseas business, and I am mainly responsible for domestic business.
Economic Observer: What do you think of the external evaluation of fitness mirrors as a “pseudo demand” and “IQ tax”?
Tang Tianguang: It takes a process for a new category to be understood by the public. It’s easy for people to make analogies. For example, he will think, “Isn’t this fitness mirror equivalent to a screen cast? Cast Keep on the TV, and I can use it as well.” But as mentioned before, our content is very structured , this device can collect your exercise data and give you positive feedback.
Therefore, when the user has not actually used the product and is not in this system, he may not be able to perceive that point.
We have opened a lot of stores this year, and many people go to offline stores. He will say that he has seen your products online before, which is very interesting, but he is very hesitant, not sure if it will work for me, but offline After the real experience, you will find that it is different, and a natural market education process may be required.
One point of external controversy is that it only targets users with specific needs, not the general public. This statement itself is objective. There are many types of fitness, and each category has its own audience. The 16 major categories of our products include HIIT, stretching, aerobic dance, fighting class, meditation, etc.
From a practical point of view, 100 people have gone to the gym to apply for a card, but in the end they stayed in the gym to exercise regularly, that is, at least 2-3 times a week, otherwise it is not called a real exercise habit, and you will find that the retention rate is 5% . Everyone’s physical condition is different, and the goals of exercise are different. 95% of Chinese people do not need to “lift iron”, but more to maintain health, lose fat and shape. Therefore, we actually focus on the above-mentioned three groups of needs, not to replace the people of the gym, to grab their customers, not a replacement relationship.
Economic Observer: In the case of layoffs in August this year, FITURE responded: “As a start-up company in the growth stage, in order to develop in the long run, it is necessary to flexibly adjust the organizational structure according to the strategy”. What is the specific strategy? What adjustments has FITURE made in the past few months? What’s the next step after the store expansion?
Tang Tianguang: We have been doing three things in the past. The first is to let users buy them home, the second is to let them use them, and the third is to use them continuously. In fact, we spent a lot of money on the second and third paragraphs. time and energy. In the past, we invested a lot in the entire R&D, because to do all three things well, we need to do a lot of work.
But all product innovations have a critical value. A product has thousands of functions, and the actual use may be twenty or thirty. After three years of development, the category of magic mirror has gradually matured.
Therefore, at this time, we made some personnel adjustments to reduce the proportion of R&D personnel, but in fact, we have expanded the recruitment of sales and the entire front-end offline. It may be easy to understand by analogy. It is similar to the adjustment of manpower structure. Originally, 80% of the entire company did R&D and 20% did commercialization. Now it has become 50% of people doing research and development and 50% doing commercialization. The main ones are domestic front-line business personnel, which is incorrect.
At present, it mainly develops some products, such as karaoke, smart speakers, voice assistants, dance machines and other functions. At the same time, starting from this year, our offline stores are mainly self-operated and assisted by other businesses. The entire sales force has basically achieved regionalization, which can not only do business, but also operate at the same time. The magic mirror shows users The number of points has also increased a lot.
Our company’s cash reserves are quite sufficient. We opened 18 stores this year, and we will continue to open stores in first- and second-tier cities as planned. The next step is to operate this store well, carry out regional operations, so that the business density can reach a certain level, and cultivate a good commercial team.
Economic Observer: Why is fitness mirror a good business?
Tang Tianguang: In the past, there were many companies selling fitness equipment in China, but there were no big brands, such as treadmills and bicycles. The annual shipments were several million units. The market was quite large, and user demand was also very high. real. However, treadmills and bicycles are just equipment, without content, and the user churn rate is very high. A lot of people will complain that buying a treadmill and taking it back may be a novelty, and then it becomes a drying rack.
There are also pure content, such as Keep, which is a content platform, you can use your mobile phone or mobile phone to cast the screen, or many people may go to Bilibili, YouTube, find fitness bloggers or Xiaohongshu to watch, Including this year’s Liu Genghong phenomenon.
In fact, the phenomenon of Liu Genghong has occurred in every generation in history. You may be familiar with Zheng Duoyan, Pamela in the web 2.0 era, and Liu Genghong in the entire mobile Internet Douyin era. But they all have a problem, that is, without service and experience, users are easy to dissipate, and they come and go quickly.
Our business model is actually hardware + software, content + services. These constitute a sports field, which allows you to simulate as much as possible during exercise, giving you the best experience. You can interact with the real coaches in the mirror and get incentives .
After each user activates the product, there will be a corresponding health consultant, one-to-one service. In this process, try to find and tap user needs as much as possible, such as wanting to lose fat, shape, or maintain health, and then find the most suitable courses from our more than 3,000 courses and recommend them to him.
From the perspective of users developing payment habits, payment itself is an a posteriori indicator, just a financial indicator, we are concerned, but the more important part is the improvement of user value. In the end what kind of products can make users form a habit. When his habits are based on content, services, and equipment, paying for it has become a natural thing. The magic mirror solves the problem of a sense of companionship.
Economic Observer: From the subdivision of fitness mirrors, what is the biggest pain point?
Tang Tianguang: The main reason is that this product is really too new for the vast majority of users. Many users have seen some publicity, but there is no way to get a real experience. In fact, in the past two years, we have mainly focused on online, so we will increase offline investment in the future, so that more users can get experience and know whether this product is suitable for them.
Economic Observer: Is the business model of fitness mirrors solid? Why?
Tang Tianguang: This business model is undoubtedly established. There are already a lot of knowledge payments in China, and we have a single-digit churn rate, which is a very low number in domestic subscription services.
Our most ideal business model is to make money by paying for subscription services and content. Because until today, all the gross profit of hardware cannot cover the channel cost. We don’t want to do the traditional one-shot business, but we still want to help everyone develop the habit of exercise. If the service of our product cannot help more people develop the habit of exercise, then what we have done is a failure and has no value.
That’s why we base our profitability on allowing more people to use it. Only when it is used can we make money. If it is not used, the company should die.