Earn 500 million by winning medals! How did Keep suddenly become profitable? !

One day, when you suddenly feel like working out, you open Keep, and what comes into view is not just various fitness courses with dynamic rhythms and slogans, but online running activities with exquisite medals. And this medal is not a commemorative medal with numbers or words in your mind, but a "new trendy toy" with various styles and co-branded with major IPs, and there is always a "new trendy toy" that will capture your "heart". Keep became popular with a medal and is rumored to have made 500 million yuan. Can it keep relying on medals?

Recently, senior Internet operator @韩叙HanXu posted on Weibo that Keep has made 500 million yuan by selling medals, which is a case of insight into user needs that subverts cognition. Although Keep responded that "it is not true that Keep has made 500 million yuan by selling medals," the data of this Weibo post still exploded, with more than 3.2 million reads, more than 3,000 reposts, and more than 6,000 likes, and it also triggered heated discussions in the industry.

As a leading company in the industry, Keep has been working hard to figure out ways to monetize since its launch in 2015. From selling classes through live streaming, launching paid memberships, to selling fitness equipment, and even opening offline gyms and selling light meals, Keep has been constantly exploring new ways to make profits. However, the "anti-human" initial bug still caused it to be in a loss-making state for years. It has submitted a prospectus to the Hong Kong Stock Exchange twice, but has not yet successfully passed the hurdle.

At a loss, it accidentally discovered a business that could be monetized by marketing physical medals. This business not only attracted a lot of attention and made Keep famous, but also successfully found the "Nine Yin Manual" it had been looking for - the highlight in the IPO prospectus, and also allowed it to reach more "fitness newbies" users, expand the user circle, and successfully "go out of the circle".

1. A comeback with a medal

1. The industry leader, but still making losses year after year

According to data released by Keep in 2021, its number of registered users has reached 300 million, with an average monthly active user base of 34.4 million, of which 3.3 million are average monthly paying members. Keep has become China's largest social sports platform.

However, being the king of a niche track does not mean that you can really make money. Keep's public prospectus shows that the adjusted net losses of Keep from 2019 to the first three quarters of 2021 were 366 million yuan, 106 million yuan, and 696 million yuan, respectively, with a cumulative loss of nearly 1.2 billion yuan, and profitability is still a long way off. This not only makes Keep's business model questioned by the market, but also makes the industry re-examine whether "fitness is a good business."

At the end of 2019, the arrival of the epidemic brought new challenges to the fitness industry. However, no one expected that a medal would become Keep's life-saving medicine.

2. 520 became popular and successfully broke the circle

In fact, Keep’s medal business began in 2015. Its original intention was to satisfy the marathon dreams of core runners. It hoped that through online running events, more runners who were unable to participate in offline running events for various reasons would have more opportunities to participate.

At that time, online running activities had taken shape, and Keep had launched products such as medals and certificates since then, and launched online running activities at important time points. In addition, it also authorized city marathon events. However, online running activities have not yet successfully broken through the circle, and its core users are still ordinary runners.

The turning point came in 2021, when a user gave his 520 medal to his partner after an online running event on May 20, recorded a video and uploaded it to Douyin, which became a popular video. This "accidental popularity" not only made more people aware of Keep's online running event, but also made Keep realize that the value of medals to users can definitely successfully motivate more marginalized people to take action.

It was also from this event that more and more "fitness newbies" entered the online running circle and began to "show off their medals" on social media platforms such as Xiaohongshu and Douyin, making the Keep medal successfully break out of the circle and become popular.

Keep medal collection on Xiaohongshu

2. Open up the Ren and Du meridians and grasp the traffic code

Since then, Keep seems to have opened up its Ren and Du meridians, accurately understood user needs, and firmly grasped the "hearts" of users. In terms of the theme and style of the medals, Keep strives to launch diversified designs to hit the consumer psychology of users in different dimensions, achieving a relatively comprehensive multi-level user coverage.

1. Co-branded IP, there is always one suitable for you

Some people say that the end of Keep is Pop Mart, which is true. Keep's medal themes include not only Kuromi and Big Eared Dog, which are loved by cute girls, but also well-known game IPs such as "Honor of Kings" and "Love and Maker". It also had in-depth cooperation with "Snow Sword" and "Dream of Hualu" during the popular TV series.

By grasping the trend and exploring high-quality IPs for joint ventures, Keep has awakened more potential users and successfully harvested new communication heat with the help of the natural traffic of these IPs and trendy culture. The continuous exploration of new themes has also led to the continuous superposition of audience circles, giving old users a sense of "killing monsters and upgrading", and developing a "collection addiction" mentality for the exciting medals like collecting Pop Mart.

From animation, games, film and television to online literature, for Keep, there are still many unexplored and under-explored areas. It can be said that every new growth point may be buried in the original user circle or in the related interest circle.

Online running medals have a variety of themes

2. The grass-planting economy gives more social attributes

The popularity of the Keep medal is inseparable from the help of social platforms such as Xiaohongshu and Douyin. After all, Pop Mart has enjoyed enough dividends from the "grass planting" thing. As a sports medal that is also trendy and easy to plant, it quickly found the right direction and put more effort into the dissemination on social platforms.

In addition to the original users such as cute girls, classic IP, and subculture enthusiasts, medal collections are posted on platforms such as Xiaohongshu, triggering more "tap water" advertisements to follow suit and post brand names.

Keep also made efforts at special time points to give medals more connotations. In addition to monthly and solar term activities, Keep also took advantage of the popularity of the 520 and Chinese Valentine's Day, which made it "famous". It launched limited edition Valentine's Day medals, which successfully triggered a craze of "running for girlfriends to win medals". Netizens showed off their medals and affection on platforms such as Xiaohongshu and Douyin, attracting more potential users who are eager to try for Keep.

With the help of IP and the fermentation and broadcast on social platforms, the Keep medals have become a new type of social currency. People with medals can post to show off. The photos and videos filled with medals on Xiaohongshu and Douyin seem to express "I have so many sports medals, I am healthy, and I am fashionable". And those who show off their boyfriends' medals don't forget to show "I have an awesome boyfriend who won medals for me while running".

Netizen shares the medal her boyfriend ran for her

3. Experience Economy and Emotional Value Satisfaction

Keep's medals are priced at only 19.99 yuan (virtual medals) and 39 yuan (physical medals), which can be said to be "good value for money" compared to blind boxes that cost dozens or even hundreds of yuan. Users only need to participate in a commemorative run of 1.990 kilometers to get a medal with their favorite theme through their sweat and full investment and participation. It can be said that it not only satisfies people's pursuit and desire for health, but also satisfies the satisfaction of showing off their sports results on social platforms at a low cost. At the same time, the rewards obtained through hard work are even more precious.

For 39 yuan, you can get a medal by running 1.990 km. When the badge of the IP, which has both good looks and social attributes, is delivered to the user after the sports check-in, it gives a different sense of ritual to the originally boring and "inhumane" sports check-in, and encourages more people to actively participate in the event.

As Han Xu summed it up: "The 39-yuan medal is good-looking, inexpensive, can be posted on social media, and can prove that you have worked out. All of Xiaobai's needs are met."

3. The other side of the medal

When the medal's gorgeous appearance is removed and the Keep online running event is in full swing, the original fitness attributes attached to the medal seem to be gradually diluted by reality.

On social platforms, many users posted complaints about the poor quality and slow delivery of medals. Keep can still solve these problems in terms of product quality and event operation by improving its own business level. However, if marketing is excessive and more non-benign related industries are spawned in the absence of reasonable management rules, it is likely to consume people's novelty and goodwill in advance, which is not only not conducive to the long-term development of online running activities, but also reduces Keep's reputation in the hearts of some core users.

Netizens complained about the poor quality of the medals

Searching for "Keep medals" on social platforms, "running on behalf of others" is prominent in related searches, and there are many related posts. When searching for running on behalf of others on e-commerce platforms, there are many stores with monthly sales of over 100, and even a running on behalf of others industry chain has been formed. When the pursuit of medals gradually changes from boyfriend running for me to running on behalf of others. Users only need to provide their own Keep account, and the runners on behalf of others will sign up and complete the online activities on their behalf. The medals will be mailed directly to the users, and the price will increase with the number of kilometers.

Price list for taking orders

There are many stores with monthly sales exceeding 100

In addition to running for others, the trading activity of medals is also quite high. From the social platform Xiaohongshu to the second-hand trading platform Xianyu, even Taobao and Pinduoduo, you can find scalpers selling medals or users engaging in second-hand transactions.

Medal trading on second-hand trading platform

Such chaos has undoubtedly led more and more people to question whether running on behalf of others violates the original intention of Keep to organize activities to guide people to exercise. Some comments even believe that "a sports company making money by toys is undoubtedly putting the cart before the horse. Such a Keep will not last long." There are also old users of Keep who said that they have never participated in any activities of Keep that require payment to win prizes, and the current excessive publicity has made him feel disgusted.

In addition, the frequent update speed of medals has also caused some users to "cool down", making some users who originally came for the medals gradually feel that "Keep is selling medals."

At this time, Keep was in a dilemma. It was difficult to give up the medal business, which was a great business, and it was difficult to find a new way out. After all, it had been online for eight years, and the medal business could be said to be Keep's only successful and profitable project. It was difficult to change the marketing path, fearing the loss of "novice users" and "IP enthusiasts" with broad market prospects, and it was difficult to formulate better rules to retain the declining reputation and the disappointed old core users.

It can be said that finding a new balance and path is a problem that Keep, which seems to be in a booming situation, has to face at present.

IV. Conclusion

"I once participated in Keep's Mother's Day event. After running, I received a medal and a necklace as gifts for my mother. She was very happy."

"My friend likes Chibi Maruko-chan very much. I signed up for the joint running event and received a medal. I gave it to her. She was very happy and I was very happy too."

In the comment area, there are still many heartwarming and meaningful comments about the online running event. I also believe that Keep's original intention of holding online running events to "provide more activity opportunities for runners to make up for the regret of not being able to participate in offline events" has not changed. The small medal is a "life-saving straw" for Keep to strive to find a diversified development path and a sustainable and suitable business model.

However, how to turn an unexpected breakthrough into a sustainable profit model and a healthy marketing form is still a question that Keep needs to answer in the future. This is not only a test for Keep, but the entire Internet fitness industry is also waiting for Keep's answer.

Author: Bibi (cultural industry critic, researcher at Sanchuanhui Cultural Tourism and Sports Research Institute); Editor: Shi Guang; Editor: Bandao

Source public account: Cultural Industry Review (ID: whcypl), China’s top new media for cultural industry.