With this acquisition, we have a strong base to deliver on the value proposition of pricing and discounts, says KFit Founder Joel Neoh
KFit Group Founder Joel Neoh
Large multi-national companies acquiring startups or small businesses is not a major news. But when small fishes devour big ones, media go crazy because such things don’t happen very often.
KFit Group is one such venture that has just pulled out a rabbit out of its hat. This one-year-old fitness-sharing platform has just snapped Groupon’s Malaysian business for an undisclosed sum. This comes in less than six months after KFit acquired Groupon Indonesia. e27 talked to KFit’s Founder Joel Neoh to know more about the deal, his future plans and the O2O industry in Southeast Asia.
Here are the edited excerpts: Fitness industry itself is a huge untapped market. What triggered your foray into other verticals?
After signing up over 60 per cent of gyms and studios in each city, we see a complementary benefit by increasing the broader lifestyle selection of local businesses including spas, salons, restaurants and more, to benefit users through discovery, savings — and increasing spend of wallet. It becomes less about our customers tightening their belts and more about reshaping their view of value through a wider offering. Groupon is an established multi-billion dollar business with operations in almost 28 countries. Being just a startup, how did you manage to seal this deal?
Unfortunately, we’re unable to comment on Groupon’s behalf. However, we can share that this opportunity came at the right time and sees Groupon become a strategic partner of KFit. Groupon Indonesia and now Groupon Malaysia, what is next on your table now?
With this acquisition, we have a strong base to deliver on the value proposition of pricing and discounts. We plan to build upon this foundation by adding a compelling value proposition of convenience. We see this combination as a key driver in the success of Chinese O2O companies. We will be rolling out some exciting offerings soon, so do keep a lookout for that. How does Groupon benefit from this deal? Does this deal mean Groupon is gradually losing the ground and winding up its business in Asia?
Unfortunately, we’re unable to comment on behalf of Groupon on this matter. However, Groupon is a strategic partner with KFit, so as we become more successful, so will they. How has been the O2O industry in Malaysia faring? How do you compare it with that of Indonesia?
In Malaysia, O2O appears to be quite fragmented. There are currently many different players across various categories, with no clear leader providing a single multi-category O2O commerce platform. Malaysia’s mobile penetration also has plenty of room to grow compared to Indonesia, where approximately 70 per cent of internet traffic happens on mobile.
In terms of GDP, Malaysia is at US$313 billion with a US$10,500 GDP per capita. Indonesia has a GDP of US$868 billion with a US$3,500 GDP per capita. Undeniably, SEA is one of the fastest growing regions with Indonesia taking the lead. In Asia, China is leading the O2O revolution. Do you have plans to enter this market?
No, we don’t have plans to enter the China market at this point. Our focus for now is within key Southeast Asian markets. You recently sealed a big funding deal with Venturra etc. Are there new plans to secure next rounding?
We are selective in terms of the partners we work with, but are always open to discussing opportunities with strategic partners and investors that can add value to our mission of building the #1 O2O company in SEA. What is the future of O2O business in Asia. What are the trends?
Overall, we expect more local businesses to benefit from O2O and adopt new technology. We foresee that the technological advancements for O2O will shift in a way that will make operations more convenient for both customers and businesses. This will also enable businesses to gather more data from their customers, allowing them to build more intimate relationships with them. Mobile payments will also be a big piece and we expect to see key players driving the education of mobile payments very soon.
Image Credit: KFit
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