Keep Product Analysis Report

As people pay more and more attention to health and the fitness craze rises, sports and fitness products also have certain market prospects. As a unicorn product in the fitness industry, what is worth analyzing about Keep ’s development model? In this article, the author analyzed and evaluated Keep and made corresponding analysis on the development of the product. Let’s take a look.

1. Market PEST Analysis

1. Politics

Since the promulgation of the "Several Opinions on Accelerating the Development of Sports Industry and Promoting Sports Consumption" in October 2014, my country has issued a series of policy documents on sports and fitness. National sports and fitness have become a national strategy. It is planned that by 2025, China's sports population will reach 500 million and the output value of the national sports and fitness industry will reach 3 trillion.

The country encourages innovation in the sports and fitness industry, and also increases policy support for the industry, bringing more opportunities to the fitness industry.

2. Economy

In recent years, China's GDP has continued to rise. In 2020, China became the only major economy in the world to achieve positive economic growth. The per capita disposable income of residents has also continued to increase, people's consumption needs are no longer limited to survival, consumption concepts have also changed, the fitness market continues to grow at a high speed and has become one of the hottest trends in 2021.

3. Social and environmental aspects

According to the latest data from the "Report on the Nutrition and Chronic Disease Status of Chinese Residents (2020)", more than half of adults in China are overweight or obese. This is the first time that a figure of more than half has appeared in a national survey report.

Obesity affects not only appearance but also health. The outbreak of the epidemic has made people realize the importance of maintaining a healthy body and has catalyzed the resurgence of "home fitness".

4. Technology environment

AI-based hardware products have entered a stage of rapid development. The rapid development of wearable devices, smart hardware, and sensors has enabled them to have powerful data acquisition capabilities. With the help of these smart hardware that can penetrate into home fitness scenes, coaches can guide students to achieve online interactive fitness in real time.

2. User Analysis Product Analysis

In January 2020, Keep officially released the "National Sports Life Awards" data report, analyzing the behavioral preferences of people exercising on the platform in 2019. The total cumulative exercise time of Keep's 200 million users reached 22.4 billion minutes. According to statistics, users on the Keep platform exercise an average of 4.64 times a week, with each exercise lasting an average of 20 minutes.

The number of female Keep users exceeds that of male users and they spend more on fitness products than male users. This shows that in today's social environment, women are pursuing a thin, healthy and beautiful body.

It is no surprise that those born in the 1990s have become the main force in the sports consumption market, while those born in the 2000s, who are still in their student years, have surpassed those born in the 1980s in spending on sports. It can be seen that those born in the 1980s, who have become the backbone of the family, are more cautious about sports consumption.

3. User Analysis Product Analysis

1. Product Overview

In its early days, Keep was a sports and fitness product with certain social attributes, covering running, yoga, meditation, walking, cycling, etc., meeting users' sports needs in all aspects. In the process of commercialization, it has now developed into a fitness system that integrates content, hardware, software and services.

Slogan : Self-discipline sets me free.

2. Product Development History

In October 2014, the Keep team was established. One month after its establishment, it received RMB 3 million in angel investment. After only three months of going online, the number of users exceeded 2 million.

In March 2015, it received US$5 million in Series A financing. In July, it received US$10 million in Series B financing. In December, the number of users exceeded 10 million.

In March 2016, it completed a US$32 million Series C financing. In June, Keep’s first brand advertising film “Self-discipline gives me freedom” was launched, and it began to run large-scale offline advertisements. In August, it received a strategic investment from Tencent in its C+ round.

In August 2017, Keep announced that its number of registered users exceeded 100 million, making it the first sports application in China to have over 100 million users. This means that Keep has completed the original traffic accumulation in the online sports and fitness industry, surpassing other similar apps.

In March 2018, Keep held its first strategy and new product launch conference. Founder Wang Ning announced at the meeting that Keep will create a new technologically connected sports ecosystem in the future. Launched smart hardware Keepkit and offline sports space Keepland. It has also built a basic profit model, which uses advertising, paid content services, consumer product sales and offline venues as revenue sources, and the business model has gradually become clear. In August, it completed a US$2.7 billion Series D financing round from Tencent, Goldman Sachs and others.

In April 2019, the Keep bracelet and Keep treadmill were launched; in July 2019, the number of Keep users exceeded 200 million.

In May 2020, Keep completed an $80 million Series E financing round. In the same month, Keep made even bigger changes, from the original PGC (completely self-developed) to the newly introduced PUGC content (fitness KOLs open to third parties), and reached a strategic cooperation with the international fitness content brand Zumba. In August 2020, super sports expert Pamela joined Keep and launched more than 80 sports courses. In more than 4 months, the site has accumulated 40,000 fans, and the monthly number of followers has reached 4.242 million.

In January 2021, it completed a US$600 million Series F financing round with a valuation of US$2 billion. A press conference was held in April to release three major course IPs and two smart hardware products, proposing to open up the content + transaction closed loop.

With the support of policies and capital, a large amount of capital entered this track in 2014. At that time, the sports and fitness market was a red ocean, and the entry of capital also accelerated the industry reshuffle.

Generally speaking, products that are launched first will quickly capture the market and become industry leaders, and it will become much more difficult for latecomers to surpass them. The latecomer Keep, which was launched in 2015, not only survived, but also gained millions of traffic within three months of its launch. It became an industry leader within two years and had over 100 million registered users in August 2017.

The growth of user data will inevitably lead to heavy investment from the capital market. In the nearly six years since its launch, Keep has completed eight rounds of financing, raising a total of US$600 million in the eight rounds. After the F round of financing, the valuation doubled to US$2 billion. With the increase of capital, Keep is no longer limited to providing courses in the beginning. In the process of commercialization, it has gradually evolved into a fitness system integrating content, hardware, software and services.

3. Product historical iteration versions

Judging from the iteration records in the table, Keep is constantly improving product functions and optimizing convenience and functionality. At the same time, Keep also focuses on community iteration, improving user activity and retention by improving user community communication channels.

Phase 1 (February 2015 - November 2015): It was in the exploration stage, and the product functions were continuously improved mainly by adding functions, pages, and modules.

• Adding data centers, accumulating training profiles and visually presenting them to users can enhance their sense of accomplishment and meet their needs for self-realization, thereby increasing user stickiness and increasing user migration costs.
• Adding the function of searching Weibo friends and address book friends encourages users to synchronize their social circles. At the same time, adding expert lists, recommendation lists, and newcomer lists will help users expand their social circles in Keep, improve users' community communication channels, meet users' social needs, and help retain users.
• Adding the function of sharing data and courses to third-party platforms will meet users' needs for self-realization and also help promote the platform and attract new users.

The second stage (April 2016-December 2019): It is in the growth stage, focusing on acquiring user growth and improving user retention, promoting commercial realization, and starting commercialization exploration.

Keep continues to enrich the types of courses and gradually add functions such as outdoor running to provide users with diverse sports scenes, optimize user experience, meet the needs of more users, and help attract new users and retain users.

Keep began its commercial exploration in April 2016, launched its e-commerce business, and sold some lightweight sports products on its own. In March 2018, Keep opened its first offline store, Keepland, in Beijing Huamao. In September, Keep membership was launched, and in March 2019, it launched the fitness light meal product line KeepLite. In April, it launched the Keep bracelet and Keep treadmill. In October, the spinning bike was officially released. So far, Keep has been conducting commercial exploration in various dimensions such as eating, wearing, using, and exercising.

In the third stage (January 2020 to present), Keep is in its mature stage. It has accumulated a certain amount of user downloads and has gradually found a way to achieve commercialization.

Improve retention rate by optimizing the running homepage, optimizing course projection, adding running fat burning efficiency display, etc. The free training plan is launched, and members are no longer the only ones who can make training plans, which improves user retention.

Keep has established an interactive model to make exercise more interesting and greatly improve the user experience, so that it is no longer a "torture" to persist. After commercial exploration from 2016 to 2019, the commercial development in this stage has become more rational. Some businesses with poor performance have been shut down. The consumer products business remains the focus of commercialization, and the commercial development route of "product intelligence" has been determined.

4. Product functional structure

The functional structure of Keep APP is divided into five modules.

1) The home page (the default page after opening the app) includes four sub-pages: Recommendations, Membership, Training Camp, and Activities.

• Recommendation: Use a composite navigation consisting of title navigation, TAB navigation, grid navigation, and list navigation as the default entry point to recommend and display the main functions to attract users.
• Membership: This page can be accessed by displaying the recommendation page and swiping right after the recommendation. It displays the privileges enjoyed by members and guides users to become members. Its importance is second only to the default page. Becoming a member can not only increase revenue, but also increase the user's sunk cost, which helps to improve daily activity and retention.
• Training Camp: A training camp officially launched by Keep.
• Activities: Mainly online running and challenge races.

2) Community: It includes three sub-pages: Follow, Featured and Circles. It helps users expand their social circles in Keep, improves their community communication channels, meets their social needs and increases their usage time. Having their own social circle in Keep increases their migration costs and helps retain them.

3) Plan: Non-members have free training plans, while members have more exclusive plans, diet record analysis, etc.

4) Mall: Selling sports-related products on a self-operated basis.

5) The "My" page is the user's personal center, which records the user's training data.

The five modules can be navigated into the specific functional structure diagram through the title as follows:

4. Current product dilemmas and solutions

1. Insufficient user stickiness and low user retention

Keep was launched in 2015. The number of registered users exceeded 100 million in August 2017. In April 2019, the number of Keep users exceeded 200 million. As of March 2021, the cumulative number of users has reached 300 million. It can be said that Keep has never lacked traffic, but its stickiness is insufficient. According to data from QuestMobile, the usage time of users showed a downward trend from 2015 to 2019.

It was not until the outbreak of the epidemic that people realized the importance of health. In addition, people had more time during home isolation and the closure of offline gyms catalyzed the rise of "cloud fitness". In March 2020, the DAU reached more than 6 million.

However, after the epidemic at the end of 2020, Keep's DAU fell back to the same level as the previous year. The user usage time has even fallen back to the level of 2016. Judging from the data, people who were attracted by the popularity of "cloud fitness" were not retained well, which shows that Keep's user stickiness is insufficient.

1) Reason

• Everyone knows that life lies in exercise, but most people are lazy and give up after a momentary whim, without fundamentally solving the problem of people's lack of interest in exercise and inability to persist. In May 2019, Keep’s latest commercial successfully went viral, once again sparking people’s passion for fitness. But after the enthusiasm, things returned to calm.
• The explanations in Keep's fitness classes are not detailed enough, and for fitness novices who don't know how to exert force, directing them to fast-paced exercises may cause injuries.
• Keep has a strong tool attribute. People open Keep with a strong purpose and leave after using it. Although there is a community module, the atmosphere is not strong.

2) Vision of solutions

In addition to paying, there are more ways to open a membership: for example, the membership fee for opening a membership next month can be deducted proportionally according to the percentage of days for completing the training plan. The days for unfinished training plan can be supplemented at any time by inviting new users, which can increase the user's online time, improve user stickiness, and help attract new users and promote activation.

Gamify training to make users fall in love with sports: you can try to develop and manufacture dance mats, and combine them with Zumba, aerobics, combat gymnastics, fat burning parties, etc., so that exercising while playing games is no longer a "bitter" persistence.

More detailed video explanations are added in the early stages of the course: All courses include detailed explanations of each movement before formal training, including force, precautions, and incorrect demonstrations, etc. The explanations can be given in the teacher's personal style, and users can also choose to skip them freely.

Running and cycling groups in the same city can try to add group chat formats. In order to avoid being a wedding dress for WeChat, we can make some designs that are more convenient for exercising together. For example, the group can initiate fitness team information including location and time. Other people in the group can click on the link to join the group running with one click, and a small group of the group will be automatically created. When you arrive nearby and start running, click to sign in and record the running-related indicators. After everyone has finished running, those who signed in for the run can receive official red envelopes and mall discount coupons, and the 24-hour small group will automatically disband.

The form of group chat will increase users' online time and improve user stickiness. Through official red envelopes and mall discount coupons, it can increase user participation and promote commercial monetization.

2. A business model that meets the expected scale has not yet been found

Keep started its commercial exploration in April 2016, focusing on commercialization scenarios derived from sports and fitness. However, the scope of commercialization is too broad and the business is too large, which leads to insufficient professionalism and focus in all directions, and greater pressure on operations and funds.

Data shows that Keep had 35 million monthly active users in 2018, but the actual content monetization revenue was only 20 million yuan. This is a big gap compared with the revenue capabilities of most Internet companies.

The sudden layoffs one year after rapid commercial expansion proved that the results of Keep's commercial exploration at this time were not as good as expected. Subsequently, Keep shut down some businesses that were not performing well and established a strategy to focus on e-commerce business for commercialization. At the "Chun Xiang" press conference held in April 21, it was announced that the sales of online sports consumer products exceeded 10 billion, but as the leader in the fitness track with a valuation of 2 billion, this revenue volume is far from enough.

1) Reason

• Insufficient user stickiness will lead to weak monetization capabilities of the mall section.
• Keep is in competition with Meituan and Ele.me in the food sector, and does not have an advantage (the Keep light meal public account has not been updated since August 23, 2019, and it should have discontinued this business line).
• In terms of clothing, it competes with many e-commerce platforms such as Taobao and JD.com. Large e-commerce platforms have many brands, rich varieties, and a wide range of optional price ranges. In terms of traffic, large e-commerce platforms have launched a dimensionality reduction attack on vertical e-commerce brands.
• In the field of smart sports, Xiaomi and Huawei have already started their layout. Keep does not have a time advantage in this direction, and its competitors have strong R&D and product promotion capabilities.
• In June 2020, the Jiangsu Provincial Consumer Protection Committee found that Keep's bras had low breathability, and its running socks and sun-protection headscarves were non-compliant. Keep was asked to make rectifications, which showed that Keep lacked professionalism in cross-border sales and damaged its reputation and user favor.

2) Vision of solutions

In addition to the issues of user stickiness and professionalism, the other three aspects ultimately come down to user consumption habits. There must be a beginning before changing user habits. Keep needs to give users a reason to try paying.

• Establish a certain mechanism to give users consumption coupons: for example, after reaching a certain training time, users can redeem consumption coupons of different amounts in the mall; challenge competitions, etc. will issue coupons of different amounts based on different levels of energy consumption. The coupon amount should be as much as possible to impress users to place an order (if funds are limited, you can limit users to participating once a month).
• To give users a stronger reason to pay for Keep, they can consider using their own reputation in the fitness field to build a platform that connects fitness coaches and gyms, with revenue coming from a commission from class fees:

Gyms and dance studios: In addition to finding long-term coaches, they also need to find substitute coaches at any time. A single business has no control over the coaches. It doesn't cost much for the coach to find an excuse to cancel a class after accepting it. The coach can continue to take classes at another business, or even use a second WeChat account to continue taking classes from the same business without being discovered. However, it will affect the business's reputation.

Merchants can post information to Keep, and coaches can take classes on Keep and be supervised by Keep. Coaches need to check in 5 minutes before class time to avoid being late. Course cancellations are not allowed within a few hours of the start of the class. Statistics are collected on the coach cancellation rate, absenteeism rate, lateness rate, and merchant ratings, which merchants can refer to when choosing coaches.

Fitness trainer: Most trainers must have encountered or heard that the gym was emptied overnight and there was no place to collect the owed tuition fees. Keep can also play the role of supervising merchants.

After gathering the coaches, Keepland can provide training for fitness coaches and exercise coaches, organize fitness and bodybuilding competitions, etc. Compared with self-operated equipment and clothing, this plan has lighter assets and greater profits. Relying on its reputation in the fitness industry to prioritize layout and negotiate cooperation with gyms, fitness coaches will naturally gather around, and the market will be seized in advance as a moat.

V. Conclusion

Keep has gradually evolved into a fitness system that integrates content, hardware, software, and services. The cumulative number of users has reached more than 300 million, and the valuation after financing is as high as 2 billion US dollars. These are the halos of this unicorn in the fitness track. Although the business model that determines its future development has not yet been proven, user stickiness is also on a downward trend. But with 300 million mainstream consumers at its disposal, profitability is only a matter of time. Although the road to commercialization is somewhat tortuous, I believe Keep will keep going.

Author: Heeheehaha

Source: Heeheehaha