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The rising “self discipline” business From Home fitness

The following is the The rising “self discipline” business From Home fitness recommended by And this article belongs to the classification: Venture capital, Investment & Economy.

With a market scale of 40.4 billion yuan and two leading companies listed on the stock market, home fitness has become one of the hot tracks in the past two years among the “burning my calories” of the whole people, and is continuously favored by venture capital. But is this just a short-term boom fueled by last year’s epidemic? What are the new features of home fitness in 2020? In many emerging new projects, what are the considerations of capital?

Qingtong capital continues to pay attention to the consumption track and has helped 55 + projects to complete financing. Before writing this article, we interviewed 50 + industry investors and founders successively, trying to show the “opportunity” and “change” behind the home fitness track in 2020 through the collision of views.

In this paper, we focus on three parts: first, sort out the financing events to see the preferences and trends behind the frequent capital sales; second, five dimensions to clearly outline the new characteristics of the home fitness industry in 2020; third, discuss the investment logic of capital in the track, and consider the hardware, content and market level.

Home fitness, self discipline business in living room

China’s fitness industry has developed for more than 40 years, and the industry is relatively mature. From 2019 to 2020, home fitness has become a hot word for venture capital, and the market continues to grow at a high speed. From February to March last year, there was an outbreak of the epidemic situation. According to the data of toubao Research Institute, China’s home fitness market will reach 28.15 billion yuan in 2019, with a compound annual growth rate of 35.5% in five years, and it is expected to reach 40.4 billion yuan in 2021. Home fitness stands out from the mature Fitness Track and becomes a new opportunity point of the track.

In the capital market, home-based fitness also has a bright performance, and has successively run out of the top listed companies. In 2019, peloton of the United States was the first to successfully IPO. Last year, its share price reached 44.38 billion yuan, with a year-on-year increase of more than 550%. In China, Shuhua sports also landed in a shares in 2020.

Looking at the primary market, keep completed the f round of 360 million US dollars financing in January 2021, which started the “first shot” of the new year. Throughout the financing events from 2019 to January 2021, there are 21 domestic financing events, including 10 in 2019 and 10 in 2020.

Qingtong capital summarizes and finds that its financing mainly presents three characteristics: 1) several rounds of financing have been completed successively by multiple projects, three rounds of financing have been completed successively by fiture and goldsmith, and two rounds have been completed by keep. It can be seen that the capital continues to add weight to the home fitness track. 2) The combination of software and hardware is more popular, with 14 financing cases. 3) Looking at the logic of the track from the perspective of capital, we mainly focus on the secondary market and the primary market, and look for the target similar to peloton in China.

Is the rise of home fitness track just a short-term outbreak of the epidemic? Investors in the industry are also suspicious. Through communication, analysis and demonstration with 50 + investment institutions and founders, Qingtong capital believes that:

First, home fitness stands out from the mature fitness industry, and has been able to maintain stable growth under the promotion of mobile terminals;

Second, from the perspective of product sales, it has obvious seasonality, while the epidemic is only a catalyst. According to the data of Amoy from 2018 to 2020, the sales volume of fitness equipment presents two peaks every year, from February to March and from November to December respectively. Under the epidemic situation, the peak value is particularly obvious from February to march in 2020;

Finally, after the epidemic, the awareness of fitness has been enhanced, and the industry has a large space for growth. According to McKinsey’s China consumer report 2021, the number of online fitness users increased by 23% after the epidemic, and 60% of them intend to continue online fitness. Previously, the popularity rate of home-based fitness was not high in China. According to the data from inpace’s prospectus, there were only four sets of fitness equipment per 100 Urban Households in China, with the popularity rate of less than 5%.

Home fitness is favored by venture capital, and has become a “hot fried chicken” in the secondary market, with players entering the game one after another. What are the new features of the home fitness market in 2020?

Characteristics of five industries in 2020

Home fitness refers to the behavior of fitness exercise at home. According to the different types of sports, it can be divided into two kinds: unarmed training and equipment training. Under the spotlight, the home fitness track will accelerate growth in 2020, showing five development characteristics.

1. Business model: the combination of software and hardware is the general trend

There are many home-based fitness players. According to the enterprise survey data, there are 771 newly registered home-based fitness enterprises in 2019, an increase of 99% over the previous year, and a total of 429 in 2020. It is mainly divided into two categories: first, software brands, such as keep, Gudong, mint health, etc.; second, hardware enterprises, such as Shuhua, Goldsmith, etc. Looking at the whole industry, pure software players still have cash flow problems, while pure hardware players are more traditional.

At present, start-up companies mainly adopt the business model of combining software and hardware. Hardware is the main profit point. According to the survey of Qingtong capital, the gross profit of home fitness hardware can generally reach 30% – 50%; while the value of software is mostly used to gain customers and increase user stickiness through content payment and e-commerce realization, but the gross profit is not high. According to peloton’s financial report for the third quarter of 2020, Internet fitness products are its main source of revenue, accounting for 79%, and subscription content accounts for only 21%.

Taking a comprehensive view of the domestic player pattern, there are three main characteristics: 1) the software start-up players, synchronous layout of hardware to expand profits, and the head is relatively clear, keep has been established for more than five years, and has “deep roots”; 2) the hardware entry enterprises, traditional fitness equipment players and start-up companies coexist, the head is uncertain. However, traditional enterprises, such as Shuhua and Qiaoshan, are slow to turn around, and it is difficult for them to play new online games; start-ups are constantly pouring in, and each category has the opportunity to run out; 3) giants are entering the home fitness track, and Apple will launch fitness + online fitness course in September 2020, and Xiaomi and Huawei will also lay out wearable devices early, hoping to get a share of it.

In addition, at present, the focus of capital on the track lies in the dominance of keep in China. Do other players still have the opportunity to run out? Horizontal comparison of the pattern of foreign players shows that in addition to peloton, the new player echelon fitness in the U.S. market also won $65 million from Goldman Sachs in December 2020, with different main price bands. It can be seen that the track relies on peloton to open up the market capacity, capital can see that more market segments are not satisfied, and new players still have the opportunity to run out.

In China, the development path of new players, more to a single category hit “pop money”, the formation of brand advantage, and then do category extension. Wild animals started with bicycles. In 2020, Taobao’s sales exceeded 85 million, ranking first in the category of bicycles, and then expanded to treadmills and boating machines.

2. M-bike “show muscle”, fitness mirror favored by capital

There are many kinds of home fitness, and treadmills firmly occupy the “mainstay” of the sales of home fitness equipment. According to cbndata data, the sales volume of treadmills will occupy the first place in 2020. M-bike and smart fitness mirror attract the attention of venture capitalists. Fitness peripheral products, such as smart bracelet, damping pad, fascia gun, also take advantage of the situation. According to CCTV data, from January to June 2020, the sales of fascia guns will increase 20 times.

1) M-bike: the “potential stock” of home fitness

As an indoor scene of cycling, the m-bike represents the combination of software and hardware, and is also the first category of peloton and keep. There are more than 50 domestic players. According to Amoy data, the leading brands in bicycle sales in 2020 include Hanma, yexiaoshou, Merrick, keep, etc., of which the increase rate of yexiaoshou is as high as 191%.

The scale of potential users is also a major advantage of m-bike, which is evidenced by the global number of riders and market scale. According to the big data of cheetah, the global total number of riders has exceeded 1.1 billion, accounting for 15% of the total population. In addition, according to statista data, in the global sports market in 2018, the market scale of cycling ranked first, reaching 62.4 billion US dollars. In the homestead scenario, the space occupied by m-bike is small, the noise is small, and the market increment space is large.

2) Smart fitness mirror: air outlet or fake demand?

In the past two years, smart fitness mirror has become the “new favorite” of venture capital, and more than five domestic enterprises have entered the market. According to the incomplete statistics of gymsquare, it includes fiture, myshape, Qiao Shan, Justin & Julie fitness, boiling moment, etc. Among them, fiture completed three rounds of financing in two years, and there are many investment institutions including Kaihui fund, black ant capital, Bai, Sequoia Capital China, etc.

But at present, the overall sales volume of fitness mirrors is not high. According to the data of Taobao on February 3, the monthly sales volume of the top two fitness mirrors on the platform is 480 pieces for jiejie fitness mirror and 291 pieces for fiture slim. It can be seen that the real demand of this new category of intelligent fitness glasses has yet to be tested by the consumer market.

3) Home derived demand: silence and protection

In the home scene, fitness equipment mainly presents two characteristics: first, the category with high protection performance is more popular, such as rowing machine, elliptical machine and so on. According to cbndata data, in 2019, the number of rowing machine buyers increased by 60% year on year, which can more effectively avoid knee and ankle injuries. Second, silent products are the biggest appeal of users. According to data from Alibaba, among the functional demands of large fitness equipment in 2018, the silent search mention rate was the highest, nearly 50%.

3. Content is king, online live fitness is hot

In 2020, the number of users of China’s sports fitness app will exceed 350 million. According to AI media consulting data, it will increase by more than 12% compared with 2019. During the epidemic period, the number of software downloads increased all the way, according to the data from toubao Research Institute. From January to February 2020, the daily downloads of keep and mint health app increased by 478% and 341% respectively. Undoubtedly, with the increase of sales of home fitness equipment, fitness content has become the driving force of the “competitors” of this track.

At present, the software start-up players are relatively ahead in content, such as keep, Gudong, etc., and have advantages in user scale, daily life, monthly life and other data.

Be in full swing during the Kwai Fu, Keep, App and other tiktok App launched online live courses. Super gorilla, Welsh, Yue ting and other offline gymnasium also launched “cloud fitness” business on the platform of jitter and fast hand. According to the data of super orangutan, the number of live broadcast online on February 6 exceeded 180000. However, compared with the players of cross-border live broadcasting, the situation of pure live broadcasting software is not optimistic. According to gymsquare data, TT live broadcasting has been unable to log in at present. The business team dissolved in August last year, only half a year after it completed round a financing.

In addition, online group calisthenics once became popular. From “Sports Industry: national sports health trend report”, from 2019 to 2020, the growth rate of group exercise is the fastest in all sports categories. According to the 36kr survey data, among the key factors for potential users to choose the gym in the future, the factor that they can flexibly choose the monthly card and the second card is the first.

4. Price band of mainstream population: less than 1000 yuan

The main driving force of sales growth is the increase of the number of buyers. So, which groups are the main force of consumption? What are the characteristics of its purchase?

From the perspective of age, according to cbndata data, 25-35 years old is the main purchasing power of home fitness, which is consistent with the main fitness population in the national fitness plan (2016-2020) of the State Council. From the perspective of gender, female consumers account for more than 65%.

Less than 1000 yuan is currently the acceptable price band for mainstream fitness people. According to Alibaba data, the highest price of treadmill / large fitness equipment users in 2018 is less than 1000 yuan, accounting for 40%. According to the statistics of Qingtong capital, as of March 3, 2021, among the top five treadmill brands in Taobao’s sales, the price of four treadmills is less than 1000 yuan.

In addition, there is an interesting phenomenon that second – and fourth tier cities have stronger purchasing power for online fitness equipment. According to the first financial data, in 2020, the proportion of online fitness equipment sales in second – and fourth tier cities is generally higher than that in first tier cities. According to the analysis of Qingtong capital, the main reason is that the number of gyms is small, the family use area is large, and the home fitness scene is more popular.

5. Going out to sea: the incremental market of home fitness

According to IBISWorld, nearly 92.6% of global fitness equipment will be imported from China (including Taiwan) in 2020. During the epidemic period, China’s domestic fitness equipment orders to sea surged, according to goldsmith. Since February 2020, its walkingpad sales in the first quarter increased by 400% year on year.

At present, the brand has been successfully verified by small household appliances and cross-border e-commerce, such as corworth and sheen. Foreign home fitness market space is large, from the data of Anson securities, fitness penetration rate in Europe and the United States is as high as 20%.

In addition, the sharp increase in penetration rate of foreign e-commerce also provides opportunities for domestic brands to go to sea. According to the data released by Bank of America, the penetration rate of US retail e-commerce reached 27% in April 2020, while it was only 16% in 2019, with steady growth in the first 10 years. With the advantages of domestic supply chain, home fitness brand is expected to become a big incremental market overseas.

Taking a comprehensive view of the home fitness track in 2020, under the epidemic variables, the business model takes the combination of software and hardware as the mainstream, and the categories such as spinning bike and intelligent fitness mirror emerge in an endless stream. The content has become the driving force of the entrants, and the sea market is growing strongly. In the competition of many players, what are the considerations of capital? How can a new brand break through?

Where does the capital wind blow?

China’s fitness industry originated in the 1980s. At present, the scale of domestic fitness crowd is considerable. According to fiture data, there are about 68 million people paying for fitness in China, and their willingness to pay is higher than that in western countries. The home fitness market, which is still in the stage of educating consumers, has been growing steadily in recent years and is favored by venture capital. From the perspective of capital, the logic of the track is mainly to find “China’s peloton” by comparing the second level with the first level.

Among the numerous emerging targets, Qingtong capital research believes that the combination of software and hardware is the focus of capital, which has higher requirements for hardware industrial design and software operation. On the hardware level, the more frequently used categories are more popular, such as treadmills and spinning bikes. From the perspective of software, content stickiness and user data are two major considerations. The value of the software lies in improving the user stickiness, which can be measured from three aspects: 1) the course has been verified to be popular online and offline, and the curriculum system is reasonable; 2) the teaching level of the coach team is high, and the balance between men and women is balanced. 3) On line, try to restore the offline interactive experience with music, lighting, etc.

In addition, offshore projects are also favored by capital. The traditional way of going out to sea is to supply chain with OEM hardware and software authorization. The popularity of small household appliances and cross-border e-commerce brings opportunities for home fitness brands to go to sea.

The essence of fitness is “anti humanity” activity, which needs to overcome inertia to produce results. In home fitness, scene changes, users in high frequency, real-time interactive feedback, is conducive to the cultivation of fitness habits. As a long-term career, home fitness will undoubtedly have a more imaginative and stable growth space.

From: Qingtong capital read more: sparklabs group: Top 10 global entrepreneurial ecosystems in 2017 Beijing, China rises to the second place 2014 annual report of securities companies: investment banking business five days, start-ups can design a good product (Part 1) cvsource: investment and financing report of Internet industry in the third quarter of 2019& SMART:2018 China campsite investment report: Q2 financing report of synthetic biology industry in 2019 Silicon Valley Bank: Q1 global market innovation, economic health and production in 2019 Qingke Research Center: the investable capital of PE market in 2018 is 20, 03.528 billion yuan to shareholders in 2019 Bites: Investment Report of China’s agricultural and food start-ups in 2018 (with download) Rongding Consulting: Chinese enterprises’ investment in the United States reached a record $45.6 billion in 2016 PwC: review of Q2 global technology industry IPO in 2017 PwC: review of Q3 global technology industry IPO in 2017

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