Venture Capital Is A Big Shot 10000 Yuan Fitness Mirror Is Not IQ Tax?

On May 19, during the 2021 Shanghai Sports Expo, Yijian, a 15 year old treadmill manufacturer, released a fitness mirror called "Yi Jian magic mirror"; On the 27th of the same month, the city outdoor sports platform Gudong released "fitmore" fitness mirror in Beijing; Only two days later, the Internet fitness platform Leke sports also released a "little mirror" fitness mirror in Hangzhou.

At the same time, there are three types of fitness mirror in 10 days. It is more than a month after the first intelligent fitness mirror brand fire (fitting the future) has completed the b-round financing of 300 million US dollars. In just a few months, more than ten fitness mirror brands have emerged in the domestic market. Although most ordinary people still know little about this new species, a "hundred mirror battle" of fitness mirror track has already started.

"10 billion unicorn" seizes Blue Beach

Fit is a fitness mirror brand company founded by Tang Tianguang, the former co-founder of truck Gang, and Zhang Yuansheng, CFO.

Not long ago, fire (fit for the future) announced the completion of $300 million round B financing, with the valuation rising to $1.5 billion (about 9.7 billion yuan). This round of financing can be called a rare round, and 14 well-known VC / PE Institutions in the industry were assembled at one time: All Star Fund, Junlian capital, DST global and coatue leading investment, Sequoia China, Tencent investment, C capital, Gaohu capital, Weilai capital, Jinshajiang venture capital, black ant capital, Z1 capital, CPE Yuanfeng, Bai capital.

What kind of company is fire (fit for the future), which is swarming with institutions? Information shows that fire was established in March 2019, and its core product is smart fitness magic mirror fire. In addition, the company only took a year and a half to become one of the unicorns, breaking the growth record of home technology fitness brand.

It is worth mentioning that, just five months after its establishment, fire received $6 million Angel round financing from Sequoia China. Even during the epidemic period, fire's financing work has been carried out in an orderly manner - in September 2020, fire announced the completion of a round of $65 million in financing, with Tencent leading investment, C capital, Kaihui fund, black ant capital, CPE Yuanfeng, Bai capital and all star fund following, and Sequoia China's additional investment; In December of the same year, fire obtained $20 million in a + round, and Weilai capital, Jinshajiang venture capital and Z1 capital successively entered the board. From the list of investors behind fire, we can also see the capital's strong interest in this market.

Why is there a large number of fitness glasses in China? Shen Bo, CEO of Gudong, believes that fitness mirror is an important carrier of family fitness content. Compared with TV, fitness mirror is easy to move and operate. At the same time, it can be linked with other products to become the center of family fitness.

As for the hot phenomenon of the new race track, Zhu Xiaohu, the managing partner of Jinshajiang venture capital, told the 21st century economic report that "with China's per capita GDP breaking through 10000 US dollars, the enthusiasm of mass consumption, especially health consumption, is constantly improving, so I am very optimistic about the direction of big health. Why healthy food is so popular is actually a proof. On this basis, fitness will certainly be a very big development direction in the future. The number of fitness users in China has exceeded that of the United States to 70 million, and the market is maintaining double-digit growth. Considering that the penetration rate of fitness in China is only 1 / 4 of that of the United States, there is still a great room for iterative upgrading and explosive growth in this market. Especially with the application of AI technology, people's fitness will be more regular, the scene will be more diverse, and more personalized and customized service experience can be obtained, which is incomparable with the traditional model of fitness industry. Therefore, we believe that the intelligent fitness industry is definitely a platinum track whose value is seriously undervalued, and fire is the new force that emerges as the times require under such a background. "

"Hundred mirror war" or "one hundred mirrors"?

Fire is just a microcosm of fitness mirror racing track. In the capital story depicted by fire, it has two overseas benchmarking products - mirror and peloton. Mirror has obtained a total of US $108 million in financing in just four years after its establishment, and was acquired by lululemon, a yoga pants brand, for us $500 million in 2020; Tempo has recently completed the round C financing with an amount of US $220 million; Tonal just completed $250 million in round e financing on March 31.

In fact, fitness mirror is not a new thing, but it is not well known in the domestic market. The family fitness market of intelligent fitness mirror products is only in the "cultivation period". Previously, mirror was named one of the best inventions of the year in 2018 by time magazine. In Google's annual hot search list released in 2019, one of the products with the highest increase in search frequency of fitness related information is fitness mirror.

However, in a strict sense, only mirror can be regarded as a real "smart fitness mirror". When the user trains, the coach in the course will appear on its "mirror". At the same time, mirror will use mirror imaging to let users see their own sports scene, the effect is similar to the mirror on the wall of a gym, and there are teachers teaching you. Tonal and tempo are more like mirror like screens. They don't have the effect of mirror imaging, so users can't see the coach and himself at the same time during the movement. In addition, mirror only sells smart fitness mirror products, not including fitness equipment. However, tempo and tonal both come with equipment, and tempo will be divided into three different packages according to the number of devices, so that users can choose by themselves.

In the booming fitness mirror track, peloton, an American interactive fitness brand founded in 2012, is the common ancestor of mirror and fit. This company rings the bell on NASDAQ in 2019. Since its listing, peloton's share price has risen from the lowest point of 17.70 dollars to the highest point of 171.09 dollars, with a market value of more than 30 billion dollars. According to peloton's financial report in the first quarter of 2021, its total membership has increased to 3.6 million, and the number of online paid subscribers has exceeded 510000, with a year-on-year increase of 382%; At the same time, the total number of equipment used in the first quarter was 77.8 million, an increase of 305% over the same period of last year. According to the report, users exercise 20.7 times a month on average, with a retention rate of 92% in the previous year. It is worth mentioning that the key to peloton's home fitness model is content and service. Improving the content and service needs to rely on user data and a large amount of capital investment. Due to the current sales volume and user scale, fire is difficult to rely on user data for course iteration or continue to develop products suitable for users in the short term. Of course, whether the cost model of fire products is feasible still needs to solve the difficulties of sales volume and user growth.

Whether in usage or pricing, fire is benchmarking with mirror. The most obvious difference is that fire adds AI cameras. Mirror launched a fitness mirror priced at $1495 (about RMB 9574) in September 2018. Users have to pay a monthly subscription fee of $39 to follow the fitness courses on the platform. But when the user's sports habits have not been formed, thousands of Yuan spent on "dissuade" them. After summing up the experience, both fire and peloton reduced the price of the new products, trying to improve the purchase intention of the consumer groups.

Not only that, but also to cope with the siege of domestic competitors, many brands of intelligent fitness mirror has been in the process of marketing, all kinds of players are rubbing their hands. After fit, another fitness mirror brand "Speedway" has received tens of millions of yuan of angel round financing, which is invested exclusively by wavefront ventures. It is understood that the company's products are not expected to be available until the fourth quarter of this year. In addition, Huawei, Suning, Haier and other giant enterprises have released products with similar functions to enter the market. There are also signs that oppo, Xiaomi, glory and other brands also have the possibility of launching intelligent fitness hardware products.

"Indeed, the essence of smart fitness is to provide content services. Therefore, if manufacturers only define themselves as a hardware company, then even if it is a "hundred mirror war", it may be just "one side of a hundred mirrors". In our view, the key to breaking the game is to provide differentiated content services, which is why we chose fire. " Zhu Xiaohu, the managing partner of Jinshajiang venture capital, told the 21st century economic report that in order to give users the ultimate experience, fire has not only set up a top domestic contracted coach team, but also built a 4000 square meter large Hollywood level content factory in Shanghai, which includes coaching, shooting and post production, music and We have developed a digital interactive content creation and management system with AI, and achieved the annual capacity of 5000 fitness course content updating, which is definitely a big leader in the industry.

It is a consensus to enter the competition, but it is also a fact that the domestic home fitness scene is not mature. If you want to let users continue to move at home, the equipment home is only one link, and the supply of content and services is more critical. In short, many enterprises intend to compete in the fitness mirror market, but if they can not expand their own advantages in the home fitness scene, fitness mirror will eventually become the same product.

The advantage of starting the track is obvious

Is it a good opportunity for fire to transfer this business to China“ Fire, the entrepreneurial team of "industry elite" + original mode, has the quality of seed players in the intelligent fitness track. That's the core reason why we like fire. " Zhu Xiaohu, the managing partner of Jinshajiang venture capital, believes that "compared with mirror in the United States, fire's intelligent fitness mirror not only has the real intelligent function by virtue of the application of AI technology, but also has the original mode of" hardware + content + service + AI ", which can provide users with a complete intelligent fitness service solution. This is a brand new category. It is not easy to be accepted by the public. The style of Jinshajiang venture capital is to choose a large enough market, defensible track and standardized mode. If we recognize this direction, the team and the model are right. We can let the bullets fly for a while. Don't worry too much. In addition, during the "618" period, there has been a qualitative breakthrough in the sales of the whole category. With the entry of technology giants such as Huawei, Xiaomi and oppo, the value of this track has reached a broad consensus in the industry. We believe that the market may be detonated at any time in the next time, and it may be too late if we don't start again. "

Affected by the epidemic situation, when the traditional gymnasiums are closed on a large scale due to the fracture of the capital chain and other problems, the enthusiasm of the unicorns who exercise and keep fit increases sharply. According to the statistics of "2020 China fitness industry data report", in 2020, the closure rate of China's commercial gymnasiums is 14.61%, and businesses frequently run away. The fitness industry has become a "disaster area" for prepaid members to complain. McKinsey pointed out in China consumer report 2021 that the number of online fitness users increased by 23% after the epidemic, among which 6% of users used online fitness more after the epidemic, 3% of users just started to use online fitness, and 60% of users intended to continue online fitness.

It's just a prelude. Some people in the industry have publicly said that hundreds of fitness mirror supply chain enterprises have emerged in Shenzhen alone, and any manufacturer with ideas on this market and the ability to integrate resources may come to test the water. There may be several ways for fire to play in the future. One is to control costs and enter the middle end price band; The second is to upgrade the experience of tonal overseas. The product needs to be fixed on the load-bearing wall for weight training, so the pricing and installation cost will be higher; The other is partial transformation to B.

"Whether fitness mirror is an IQ tax depends on how high the user value it creates. If it is higher than the value paid by users, it is not an IQ tax, otherwise, it is an IQ tax." Han Wei, founder and CEO of Leke sports, believes that "fitness mirror is probably a good product, and it has been applied in the United States. The penetration rate of fitness population in the United States is higher, and the fitness consciousness is higher, and fitness mirror is more easily applied in general. China's fitness market is obviously a high growth market. The formation of fitness awareness and habits will be very fast. We are optimistic about the growth of fitness glasses in the Chinese market. "

Not only that, fitness mirror track's first mover advantage is obvious“ Any consumer's home can be fitted with at most one or two mirrors. After occupying this space first, it is very difficult to enter the second place. " Zhu Xiaohu, the managing partner of Jinshajiang venture capital, points out the essence of all kinds of capital entering the bureau one after another.

According to PR Newswire data forecast, the global smart fitness market will reach 12.9 billion US dollars in 2020 and 42.8 billion US dollars in 2027, with a compound annual growth rate of 18.7%. At the same time, from the action of giant enterprises, we can see that the market is optimistic about the intelligent fitness track. Apple has launched fitness +, an intelligent fitness service, which combines app with Apple's hardware devices so that users can exercise at home. However, investors on the floor are very busy, but consumers outside the market have different opinions. We have to admit that the high price of fitness mirror has "dissuaded" a large number of fitness users. The three characteristics of high product price, high cost of new technology AI application and high difficulty of content operation are all concentrated in this track.

"It's not so much conversion as the rise of intelligent fitness that has expanded the service scene of fitness, from the narrow sense of the gym to home, office, hotel and retail. In the process of expanding this scene, we are more optimistic about intelligent fitness hardware. " Zhu Xiaohu, the managing partner of Jinshajiang venture capital, explained to the 21st century economic report that "relying solely on the" light service "mode of pure online mode, there is a gap in the user experience, and it is necessary to improve the service closed loop around the intelligent terminal. Some light mode companies are now extending their hardware, but they are late comers. This is a problem that is easy before difficult and difficult after easy. Secondly, fitness culture generally goes down from the middle and high-end, which is different from the traditional Internet playing method. Offline is more fashionable culture, and medium and high-end is a better path. After the fashion trend of products is formed, the recognition and reputation of brands will be better than that of general brands, and the conversion rate and activity of users will also be higher. Therefore, we believe that in the trend of unprecedented expansion of fitness scene, only around the intelligent hardware terminal, and for the user's needs for fitness content and interaction to make the best product experience, can we really capture users and become the ultimate winner on this track. "