Kr-Asia is all about actionable insights for entrepreneurs. And through this post, you’re about to find out:
1. On a market where users take a dislike to paying for contents, how could those startups built around contents achieve and maintain a healthy cash flow?
2. What is the normal development path for workout apps?
Daily Yoga (每日瑜伽) , a yoga app, told KrASIA that it has just completed a ¥60 million (approx. US$9.36 million) Series A financing round from Orchid Asia. According to Li Zupeng, founder of Daily Yoga, the capital will be mainly used to scale up its current business, speed up global expansion and develop new businesses.
Daily Yoga hads, up till 2017, racked up more than 40 million users worldwide, up 30% from 2016. It hasn’t made any noise on the fundraising scene for the last two years. Yet, all of its businesses are yielding profits.
Geared specifically towards light workout, all courses on Daily Yoga are scheduled for only around an hour so that its users could do a quick workout during fragmented time.
According to statistics released in 2016 White Paper on Spending on Yoga, Chinese yoga industry had been growing at a compound annual growth rate of 58.3%, and yoga had grown into an industry worth over ¥40 billion (approx. US$6.24 billion). In the meantime, the number of yoga practitioners had ballooned to tens of millions, and the number of yoga studios had surged to a record 40,000.
Chinese & international market:
The huge number of opportunities the big market may hold have invited a growing number of workout apps.
In contrast to other Chinese workout apps, which usually operate solely in China, Daily Yoga, founded in 2012, has been marking its territories in both China and abroad. The users in Europe and America show a high level of willingness to pay for online contents, and this has helped produce a healthy cash flow for Daily Yoga. Its overseas workout app can now be found in as many as 192 countries around the globe.
Interestingly though, the Daily Yoga’s rival product Keep, though being the first workout app in China to have garnered over 100 million users, is still making losses.
The vision that a workout app should gradually evolve from an app that provides solely training courses into a platform that encompasses user community and e-commerce is almost received among all workout app operators. Daily Yoga, of course, is no exception.
Currently, the market share of the contents delivered by Daily Yoga has exceeded over 50%. With the help of KOL and also by leveraging both PGC and UGC, Daily Yoga has, as of now, brought onto its app more than 300 series of yoga training courses. Additionally, the daily PV of its user community in China has reached 5 million, and that on the overseas market has exceeded 2 million.
After building its audience and contents, Daily Yoga went on to extend into more business areas including paid content, advertising, e-commerce, and brick-and-mortar yoga studios. In 2017, all businesses of Daily Yoga together generated, in total, tens of millions of revenue and the number of its transactions, compared with that of 2016, also increased three folds.
Content has now become a main source of revenue for Daily Yoga, as the users in China grow increasingly used to the idea of paying for contents. Currently, Daily Yoga has, on its app, around 100,000 users. Furthermore, the repeat purchase rate of its courses on the overseas market has exceeded 50%, which is a notch above that in China.
In the early days, Daily Yoga had only a user points system for its users to exchange for products based on their accumulated points. That, undoubtedly, could be barely called e-commerce. But, things have changed. That system has now morphed into a full-fledged e-commerce platform where products of Daily Yoga’s own brand name and of other vendors are sold. And it is also looking to double down on refining its own brand for providing its users with better products.
Last year (2017) has seen those workout apps veer increasingly towards vertical areas, rather than angling for all users in the workout world. Meanwhile, the brick-and-mortar yoga studios, riding on the tide of new retail, have also embarked on building their businesses online. The fusion of online and offline businesses is happening, and it seems unlikely that it’s going to stop.
Daily Yoga also embraced this trend and opened up its brick-and-mortar yoga studios in 2017, thus completing its online to offline fusion.
As Li Zupeng sees it, its yoga studio has an advantage over traditional brick-and-mortar yoga studios, that is, it has already built a large pool of loyal customers through its online operation. So its brick-and-mortar yoga studio could get off the ground more easily. Its first yoga studio, which is located in Xi’an, has so far served thousands of customers and is making profits.