The top domestic brand of home fitness equipment in China expands to overseas markets and achieves a sales volume of 700 million yuan | Insight Global

Editor's Note: When going global becomes a core strategy for a Chinese company, how to conquer the global market becomes an extremely professional topic. In the evolution of globalization, many Chinese brands have emerged at the forefront. In view of this, Hardcore has launched the "Insight Global" column to explore the cutting-edge directions and opportunities of Chinese brands going global from the perspective of brand growth and change, providing thoughts and inspiration for companies going global and the industry.

This is the 35th issue of our column - Starting to engage in the field of home fitness technology in 2018, obtaining nearly 100 million yuan in Series A financing in 2022, and going global in the same year; this year, the overseas revenue is expected to reach 700 million yuan, and the products have been sold to more than 30 countries and regions around the world... How does the Chinese sports and fitness brand expand the overseas home fitness market? Based on this, we had a chat with Xue Youwei, the co-founder of Merach Technology.

Author | Lin Qingqing

Editor | Yuan Silai

After several fitness equipment categories of the company have firmly occupied the top position in the domestic market, Xue Youwei, the co-founder of Merach, knows that it is time to set his sights on a broader battlefield.

Initially, Xue Youwei started from customer service work and gradually delved into the supply chain and product development of the fitness industry. Luo Weibo has practical experience in the e-commerce field. He once sold toys in the Shantou industrial belt and contributed 1 billion online sales to a well-known sports brand, with a keen perception of market changes.

In 2018, the life trajectories of these two high school classmates intersected. Based on their recognition of the growth potential of the home fitness market, they jointly founded Merach Technology in Hangzhou.

In four years, Merach has become the brand with the highest market share in the home sports and fitness industry in major domestic e-commerce platforms such as JD.com and Tmall during events like "618" and "Double 11", with an annual GMV of over 1 billion yuan.

Starting in 2023, Merach officially went global. In just one year, its cross-border business has achieved a several-hundred-fold growth. According to the brand's person in charge, Gongyuan, this year Merach's overseas revenue is expected to reach about 700 million yuan.

Specifically, Merach's performance in the Amazon and TikTok Shop US regions is particularly outstanding. On Amazon, Merach's smart rowing machine Q1S has consecutively topped the list as the champion in a single category on Amazon; on TikTok Shop US region, Merach's cumulative sales have exceeded 7 million US dollars.

How did Merach, which has already established a firm foothold in the domestic market, open up and occupy the overseas market? With these questions, we had a chat with Xue Youwei, the co-founder of Merach Technology.

Selling 7 Million US Dollars on TikTok

Merach's ambition is not limited to the domestic market.

After the domestic market was stabilized, at the end of 2022, Merach began to lay out overseas business to seek a larger incremental market.

"Going global was a strategic choice that Merach had to make at that time," Xue Youwei told Hardcore.

Affected by factors such as the domestic home fitness market not being fully mature, Merach's home fitness equipment is mainly concentrated on the two major e-commerce platforms, Tmall and JD.com, and has not been involved in Douyin too much.

However, when Merach went global, TikTok became a key boost for expansion.

Due to its e-commerce genes rooted in Hangzhou, Merach has had a clear operational strategy from the beginning - to do content e-commerce on TikTok.

Starting from reaching users with self-made short videos, this is only a small step for the brand to gain visibility. Subsequently, through cooperation with internet celebrities, Merach successfully expanded its influence to a wider group of precise home fitness users.

On TikTok, Merach selectively chose a group of fitness internet celebrities, sent samples of fitness equipment, and collaborated with them on content. During this period, Merach maximized the autonomy of content creation, allowing the other party to produce a large number of real experiences about Merach products and share "unboxing and practical testing" videos.

Also because of the high autonomy, the content produced by the celebrities from various countries can be deeply integrated into the local culture.

At the same time, Merach's product design takes into account both practicality and aesthetics, not only meeting functional needs but also catering to the local market's preference for home decoration aesthetics. This makes Merach's products not only exist as fitness tools but also as a "delicate" item in the home environment.

Today, the thousands of celebrities who have long-term cooperation with Merach have woven a huge short-video promotion network. And Merach is also trying more content e-commerce models.

In March this year, the overseas team led by Xue Youwei officially began to build the TikTok live-streaming business, and the live-streaming room fully simulates the real fitness environment of foreign families. In the live-streaming room, the anchor uses Merach's equipment for exercise while answering the audience's questions in real-time through the bullet screen to promptly respond to user needs.

Then, during the mid-year promotion in July, Merach innovatively tried the "Sun Never Sets" live-streaming room format (that is, continuous live-streaming for 96 hours), making the brand's live-streaming room the first to achieve a single GMV of nearly 100,000 US dollars on TikTok. During the just-ended Black Friday and Cyber Monday promotions, the continuous live-streaming lasted for 394 hours, ranking first in the industry, with a single GMV exceeding 200,000 US dollars.

Although Merach is in the early stage of going global, its target market is positioned in the mid-to-high end. The company's self-developed rowing machine MR-950R1ZH, with its easy-to-move and store design, as well as the built-in interactive function (family members can experience fitness challenges), became the first product to successfully enter the overseas market. This rowing machine is priced at around 400 US dollars, which is a medium-priced product. During the Amazon Prime Day, nearly 5,000 units were sold within two days.

In addition to the main push of the rowing machine, Merach has also successfully hit a lighter and more popular single product. According to Kalodata, in the TikTok US region, Merach's home smart fat-shaking machine called "Shaking Machine" has a daily sales volume of 200,000 US dollars, and the cumulative sales have exceeded 100,000 units so far.

Merach "Shaking Machine"

Today, Merach's account has nearly 60,000 followers, and the highest number of viewers in a single session exceeded 1.26 million. Among them, the GMV on the peak day in July reached 300,000 US dollars, and the GMV in that month exceeded 4 million US dollars.

Getting Closer to Users

Beyond marketing, the product is still the key competitive strength for the brand to go global.

Xue Youwei frankly stated that in the field of home fitness, there are significant differences between Europe, America, and China. "From the perspective of scale and users, the European and American markets are much larger than the domestic market. Therefore, we don't need to spend a lot of time on user education, as the market itself is very mature and stable."

For European and American families, home fitness equipment is more of a consumer product. After users purchase the product and bring it home, the usage frequency is very high, and the replacement cycle is generally about two years. In addition, most European and American families have the habit of moving, and they will also purchase new equipment after moving, which ensures a certain repurchase rate for Merach's customers.

Currently, Merach has no factories or stations abroad, and the products are all shipped from China, with a delivery time of about four to five days. At the logistics level, Merach has made product modifications due to cost issues.

"Our products are large or oversized items, and there are two core issues in terms of cost. The first is the freight for the first leg, and the second is the freight for the last leg. The product size needs to comply with the logistics rules; otherwise, the cost will be very high," Xue Youwei analyzed.

Not only that, but there are also significant differences between European and American users and domestic users in terms of design style and usage habits. "Using the domestic thinking to create popular products is not feasible in overseas markets; directly selling the products that sell well in China to Europeans and Americans is also not feasible," Xue Youwei told Hardcore.

In response to the situation where domestic products may not be well-suited to the overseas market, Merach has made adjustments to its overseas products.

For example, Merach designs products according to the body shapes of Europeans and Americans. Compared to Asians, they are generally taller and heavier. Therefore, for some key components of the products, referring to different ergonomic standards, Merach has made special designs to better adapt to different groups of people. For example, in the setting of the track length of the rowing machine, the overseas products need to be longer than the domestic ones, and the load-bearing performance is also required to be higher.

Merach rowing machine designed according to ergonomics and in line with the body shapes of Europeans and Americans

Currently, Merach's product line covers intelligent hardware and sports accessories such as treadmills, spinning bikes, elliptical machines, rowing machines, and strength stations. Among these categories, Xue Youwei has been focusing on how to create products that are more suitable for home scenarios and improve the user awareness of such products.

To this end, Merach combines some professional sports and fitness courses with interesting games into the hardware equipment, and independently develops two apps, "MERIT Super Fat Burning" and "Shadow Racing". "MERIT Super Fat Burning" is mainly based on courses, including live and recorded courses, as well as self-training immersive scenic track courses from various places; "Shadow Racing" is a fitness game app that contains real-scene tracks from various places. For example, the cycling mode is equipped with the same cycling track as the Asian Games, and it can support multiple people to join the cycling race simultaneously, bringing users an immersive experience and a better fitness experience.

Currently, the export of home fitness equipment is a blue ocean market, and Merach is not the only one standing on this hot trend.

To make a difference and break through, the key is not just to simply replicate the successful domestic model. "As a traditional e-commerce player, our initial advantage in 'rolling out to the sea' at this stage is the product. But in the long run, in addition to product output, our goal should still be to strengthen the brand's influence overseas," Xue Youwei said.