I. A Brief Summary of the Core Content
This article uses the classic sports analogy of "turning a penalty into gold" to explain the development of the fitness app Keep over the past eight years. In its early days, Keep accumulated tens of millions of users through free fitness tutorials, with ambitious plans to become a "Chinese Nike" that covered both online and offline services, as well as all aspects of hardware and software. However, the number of users continued to decline, and the company was on the brink of bankruptcy. Later, it made tough decisions to close physical stores, reduce the use of expensive equipment, and lay off nearly a quarter of its staff. Finally, it managed to turn a profit for the first time since going public last year, but its revenue remained stagnant with almost no growth. Now, Keep is betting its future on AI, hoping to use AI-powered fitness coaches to encourage users to pay for services. However, so far, AI has only helped reduce the costs associated with creating fitness courses and has not yet proven its ability to attract more users or generate additional revenue. Keep has solved the problem of not losing money, but it still hasn't found a way to grow again.
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II. A Detailed Analysis of Each Point
1. **Keep's Self-Saving Measures: Going from "Fat" to "Skinny"**
At its peak in 2022, Keep had 36.39 million monthly active users, which means one in every 30 Chinese people used the app. At that time, typical internet companies would try to maximize profits by expanding into various areas, such as opening physical fitness gyms (Keepland), selling expensive treadmills, producing sports clothing, and organizing marathon events, aiming to cover every aspect of users' fitness needs. However, these new businesses were unprofitable, and existing users gradually stopped using the app. By the first half of 2026, the number of monthly active users had dropped to 18.58 million, a 50% reduction in just four years. Wang Ning then realized the need to focus on more profitable activities. They cut back on unprofitable and low-profit businesses, stopped selling expensive equipment, closed physical stores, and reduced the workforce from over 800 to just over 600. As a result, the company achieved its first annual profit in 2025, and the loss in the first half of 2026 was only 12 million yuan, a significant improvement from previous years. However, the cost was also high: total revenue in 2025 dropped by 20%, and revenue in the first half of 2026 was virtually stagnant. Wang Ning explained that the company had moved from a "fat" state (high costs and low profits) to a "skinny" state (lower costs but still no significant growth).
2. **Keep's Transformation from an Internet Company to a Fitness Retailer**
Many people haven't noticed, but Keep's revenue structure has completely changed. In the first half of this year, more than half of its revenue came from selling small fitness products such as yoga mats, dumbbells, and resistance bands, accounting for nearly 60% of total sales, with gross margins increasing from over 30% to 40%. Keep no longer relies solely on its app for sales; its revenue from sales on platforms like TikTok has increased by 50%, and it even sells products overseas through Amazon. This shift means that users can purchase products without even using the Keep app. From a business perspective, this is a success, as the company can continue to generate revenue even if users no longer use the app. However, the most valuable part of Keep's business used to be its online membership model, which offered high margins without much additional effort (no production, logistics, or shipping costs). Now, the company is relying on product sales, with lower margins. For example, selling a $100 dumbbell results in costs such as manufacturing, storage, shipping, and commissions, leaving only a small profit of around 40 yuan. The stock market has reacted negatively to this change: Keep's market value has dropped from HK$22 billion to less than HK$900 million, reflecting the perception that it has transformed from a high-margin internet company into a regular consumer goods company.
3. **AI as a Cost-Saving Tool, Not a Lifesaver**
Last year, Wang Ning announced a full commitment to AI, promising that AI-related revenue would exceed 200 million yuan by 2026 (about 10% of total revenue). While AI has helped reduce costs by automating course creation, it hasn't significantly increased revenue. The current super membership, which includes AI features, costs 68 yuan per month, an additional 49 yuan compared to the regular membership. Users have complained about inaccurate AI recognition of movements and generic training plans that don't suit their needs, making the extra cost seem unworthy. The half-year report doesn't provide details on how much money AI has generated or how many super members have been acquired, suggesting that the initial AI revenue targets are unlikely to be met. In short, while AI has helped Keep reduce costs, it hasn't led to new user growth or increased existing users' spending.
4. **The Biggest Problem: Knowing How to Avoid Losses, but Not How to Win**
The article's opening analogy with the sports movie "Point Break" is apt: the team's efforts were not just about avoiding losses but about using a smaller budget to find winning strategies. Keep's current measures—reducing unprofitable businesses, laying off staff, and focusing on product sales—are all aimed at minimizing losses. While these steps have helped the company survive, they haven't led to growth. The goal was to create a fitness ecosystem similar to Nike's, but Keep has become a small brand that focuses on affordable fitness equipment. While it's still operating, it's far from its initial vision. The real challenge is to develop AI features that can attract and retain users and generate additional revenue.
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In summary, Keep has made significant changes to survive, but it hasn't found a sustainable path to growth. While AI has helped reduce costs, it hasn't been a catalyst for new user acquisition or increased spending. The company still faces the challenge of developing strategies that can drive both user growth and profitability.