Focus analysis | when Keep began to learn Luckin

Wen | Dou Xuan Edited | Qiao Qian

Keep, which is about to be listed, chose to reposition the offline fitness business this year.

At the end of March, Keep officially announced that it would expand hundreds of stores offline in Beijing. A month before the official announcement, Keep had already released the Preferred Gym program, announcing a partnership with traditional gyms to provide them with group classes.

In the past few years, offline fitness brands such as Super Orangutan and Lucky have been expanding in Beijing, intending to seize the market that has been reshuffled after the epidemic.

Keep restarted the offline business this time, directly cut the price of the course in half, and reduced the price of all courses to 49 yuan. At the same time, Keep has also set the highest salary standard for coaches in the industry and is actively poaching people from opponents.

Will keepland, which has rejoined the war of large-scale expansion, will it roll up the entire offline fitness market?

Offline business restart

Offline business, for Keep, is not a new story.

As early as 2018, Keep opened its first store in the Beijing China Trade Center, and six months later announced its profitability, receiving 35,000 visitors, and some media statistics have shown that the number of people in almost every class is close to full.

Then in March 2019, Keep opened its first store in Shanghai Jing'an Joy City, and like other new gym brands, most of Keepland's stores cover an area of about 300 square meters.

In the past two years, Keepland has opened 15 stores in Beijing and Shanghai, including 12 in Beijing and 3 in Shanghai. Now Li Chongxin, head of Keep's offline space business unit, has been involved in this business since the beginning of the Keepland project. He described Keepland at the time as "a tentative new business."

Image from Keepland's official Weibo.

Since cutting into the offline track, Keepland has always been based on the group exercise class mode. But unlike many competitors, Keepland's group class at that time adopted a "dual-teacher model", which was borrowed from educational institutions such as Xueersi, specifically, the trainees followed the big screen in the exercise room at the same time, and there were coaches on the spot to guide the students.

Initially, the lowest price for a lesson in Keepland was 89 yuan, which was higher than the competitors such as super orangutans and leke at that time.

Judging from the action of Keepland to continue to expand the store after the first store was profitable, Keep was indeed more cautious in the exploration of new business. However, not all self-operated stores have such a large traffic as Huamao, and after entering the Shanghai market for a year, Keep closed all stores, and the person in charge told the media that "at this stage, it is still focused on Beijing."

In the Beijing market, in December 2019, Keep also closed the Damei store on Qingnian Road, and the official reason was that there was a problem with the location. By 2021, Keepland's self-operated stores will remain only 9, all in Beijing, and in the revenue of Keep prospectus, offline services are only classified as "advertising and other services" that account for only 10%.

Therefore, after groping, Keepland changed its original business model, from an asset-heavy self-operated model to a model of cooperation with traditional gyms. Specifically, the traditional gym provides Keepland with an existing gymnasium, which Keepland will retrofit and cover all the costs of group lessons. After the current cost is recouped, these traditional gyms will share a tiered share with Keepland.

It is reported that this new model was conceived by the founder Wang Ning himself. After the epidemic, the decrease in the flow of people has prompted many gyms to be unwilling to spend their costs on the operation of group classes, and constantly cut their expenses, and a large number of group class gyms have been idle. Keep is aiming at this blank space.

Since the second half of 2021, Keepland has been working with 6-7 traditional gyms, and members of these gyms can take Keep's group classes for free, in addition, Keep will attract about 700 new users to each venue every month, increasing traffic by 20%.

In Li Chongxin's view, the asset-light model is conducive to the rapid rollout of offline stores. Since they released their Preferred Gym program in February this year, the offline store has rapidly expanded to 32.

In Shanghai and Beijing, two cities that have been groped, Keep has chosen to start with Beijing. According to Li Chongxin, Shanghai's offline gym market is mainly occupied by large fitness brands such as Yizhao Wade and Wilson, which already has a more mature coaching team, while Beijing's offline gym has a large number of small and medium-sized chain fitness brands, and the willingness to cooperate with Keepland is stronger.

In terms of price, the price of a group class in Keepland has also been reduced from the price of 89-129 yuan to 49 yuan. A user who purchased the keepland lesson package on Singles' Day last year excitedly said on the Little Red Book that his 100 lesson packs instantly doubled to 200 lessons.

Li Chongxin told 36Kr that they would all keep this price for at least a year. "If it's a self-operated store, the price will definitely be a loss." But our current cost model is very light, almost cutting more than 50% of the cost, the natural price can be reduced. “

Keep the official press conference site map

He also mentioned that this year, Keepland plans to focus on expanding hundreds of stores in Beijing. In the second half of the year, depending on the situation, we will choose another city to expand the store.

In the future, Keep may also put its own products into keepland of various lines. Self-operated goods are also currently the largest source of revenue for Keep, accounting for about 60%. A hundred gyms, for Keep, is not only the expansion of the group class business, but also a channel for offline sales.

Catfish effect

Keepland's group class generation operation model is not strictly speaking, a new species.

This model has long been explored by other fitness brands. For example, Justin and Julie Fintness in Shanghai, a fitness brand that has opened its own store, also provides group gymnastics classes for other fitness studios.

But after getting financing, the brand's expansion did not meet expectations. Beijing's local offline fitness brand Shape has also tried to operate group classes before, but it has not been sustainable since then.

Fa, who is familiar with the industry, said to 36Kr that this model may not be as good as imagined, first of all, the time when the gym is willing to cooperate is often not the best time for the flow of people, and secondly, coaching is a scarce resource, whether there are enough coaches to output, itself is also a problem.

36Kr visited one of the gyms that worked with Keep, which had an annual pass price of more than 10,000 yuan, and itself was full of its own group classes from Monday to Friday, and only on weekends, some of the time when classes were not scheduled, it would be arranged for Keepland, so it could only queue four classes a day. So for Keepland, even if each class is full, the revenue ceiling that a Keepland partner store can provide may be relatively low.

However, compared with the opponents who are still financing and expanding, Keep, which has submitted a prospectus, and the support of online business, there is obviously more room for trial and error. On top of that, Keepland cut the price by half, and it's hard not to put pressure on your opponents.

In fact, Beijing's fitness market has just experienced a round of price increases. Last year, the super orangutan rose by 20 yuan, triggering heated discussion among users, and last month, another local fitness brand Shape also adjusted the price of a minimum 66 yuan a lesson to 75 yuan, and even Leke also increased the monthly price from 199 yuan to 239 yuan in the previous two years, and its group class brand Lovefitt was at least about 69 yuan per lesson.

After the price increase, the price of the super orangutan group class is 89-149 yuan / session

Keepland's wave does not rise but falls, almost only half of the price of competitors, in the current average price of more than 70 yuan in the group class market, or quite attractive.

"In the past, Keepland's self-developed courses such as peach buttocks and battle ropes were OK, but the Laimei course was relatively average because of the lack of more senior coaches. But after the price cut this year, the value for money has become very good. In the view of a senior user who has been spending group classes for many years, "Keep this wave of price cuts is somewhat hurtful." ”

A person familiar with the matter revealed to 36Kr that the super orangutan is also brewing inside, and there may be a certain price reduction in the future. But this is not an easy choice. After all, when the price increase last year, the reason given by super orangutan was that "the operating costs such as store rents have risen year by year and vary greatly from city to city."

In first-tier cities such as Beijing, Shanghai, Guangzhou, and Shenzhen, the cost of rent is already very high to open in a position with a large flow of people, while the number of classes that each store can arrange and the number of students who can serve every day is limited, and the ceiling of the single-store economic model itself is obvious.

According to the person familiar with the matter, last year, Super Orangutan once wanted to store in Wukesongtuo, Beijing, but because the rent was too expensive, it could only retreat and set the new store on the nearby Wanshou Road.

Offline fitness group classes are not a model with high profit imagination space. "In addition to the obvious ceiling of single-store revenue, the scale of the domestic fitness population is limited, and it cannot be compared with the market in Europe and the United States that regards fitness as the consensus of the whole people, and the growth rate is not as fast as expected." An FA who has been paying attention to the fitness group class market told 36Kr.

A senior internal trainer who is already working as a management post in Leke believes: "Keep's goal now may not be to make money, but to take the market first." ”

Coach scramble

Like a catfish, Keepland, which has expanded 30 stores, stirs not only the choice of users in terms of price, but also the most sought-after resource on the market: coaching.

Opening a hundred stores a year means keepland needs to recruit 500 new coaches. Self-built training system will be a long-term thing to do, but in the short term it will obviously not keep up with the current expansion rate. Therefore, while cooperating with external training systems, Keepland has also recruited people from other offline fitness brands, and many coaches from other institutions have reported that they have received calls from Keepland HR.

The image comes from the official Weibo of Leke.

For fitness brands in the group class model, the coach is the core competitiveness. A star coach can gather a group of highly loyal students, so poaching not only means the loss of coaches, but also means that some students will follow the coach to other brands.

The bigger problem is that with the expansion of various brands in recent years, the existing coaching resources in the market have long been in short supply.

The arrival of the epidemic has reshuffled this traditional market, and thousands of gyms have collapsed during the period of closure. A senior coach in Hangzhou told 36Kr that the Hangzhou fitness market after the epidemic is mainly only left with Wilson, Super Orangutan, and Leke.

Therefore, in recent years, fitness brands that have been able to continue to obtain financing have almost accelerated the process of opening stores after the epidemic.

So far, Luck has opened 152 stores in Beijing, of which 50 stores have been opened in the last year. Super Orangutan entered Beijing in 2017, opening only 10 stores in the first two years, but now it has opened a total of 36 stores in Beijing.

Some areas are saturated with fitness stores. A senior group class user told 36Kr that a few years ago, some mainstream group class brands on the market often needed to grab classes at fixed points and fill the whole section, but now, in addition to some popular coaches, most group classes are more than enough to make reservations a day in advance or even on the same day.

In addition, Super Orangutan and Shape have also opened their own personal training business in the past two years, and Leke has also specially opened a personal training monthly library, intending to dig more payment space for individual users vertically in addition to monthly cards and group classes.

As a result, the demand for coaches is increasing day by day, but most of the coaches trained by traditional gyms cannot be directly matched. In recent years, Super Orangutan and Leke have built their own internal training academies, especially the former, which have almost built a set of coach training systems with stable quality control, but they still can't keep up with the speed of expanding stores.

Super Orangutan's self-built coach training academy, picture from the official Weibo.

It is understood that in the more developed Shanghai fitness market, many offline fitness brands, as long as the coach gets the qualification certification of Laimei, without further internal training, you can immediately put on the shelves. In Beijing, there is a similar situation, some fitness brands have been because of the shortage of coaches, can only reduce the scheduling of some stores, which will obviously affect the revenue.

In fact, since last year, the various fitness brands have poached each other from time to time, and even some brand executives have directly gone to the scene of friendly businessmen to add coaches to dig people, and once made trouble to the top on social platforms to hang people and shout. Keepland's scale plan is bound to further heat up the fierce situation of each family grabbing the coach.

Today, Beijing is just the first stop in Keepland's expansion plan. It is foreseeable that in the future, the brand's robbery for coaches and users will also be more intense.