GOQii: Finally someone took right lessons from iTunes


Disclaimer: These days I am looking for a ‘workout & sleep monitoring band’ and today I stumbled upon GOQii bands. No, I haven’t bought it yet. Hence I am not recommending it as a product, yet. However, their business model amazed me. This post is ONLY about their business model. This post is NOT a recommendation to buy GOQii fitness band, at least not yet.

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Since last one year, wearable computing is a part of news almost everyday, courtesy wearable devices like Smart Watches, and then Health & Fitness Bands. If you do a simple search on popular e-commerce websites for health & fitness bands, you will see nothing less than 50 brands each trying to get your attention. Really, the time has arrived for these health & fitness bands to go mainstream.

So, today I got a chance to peep into the GOQii website and find what they are doing and how they are different from other fitness bands, and to my surprise they have left an impression on me. I suddenly got a feeling that someone is selling me an iPod like stuff. My experience with iPod was terrific not because it was cool to use one in year 2005, but because the raw power it had because of iTunes.

If you really believe iPod became successful because of its music technology or really awesome technology in those few grams, you could just appreciate half their success mantra. The platform along with the technology was their real power, and which made Apple the most successful music company ever.

And right now while evaluating which fitness band to own, I am finding that each and every fitness band has similar technology in their band which captures data while your move, sleep, run, take stairs, etc and at then at some point during the day the data syncs with the mobile App. I believe that these App+Hardware combination is something which is a minimal expectation of every user. But what is that EXTRA in all these fitness bands? No one had the answer yet, which GOQii seems to have discovered and already implemented. (Although, some questions remain in my mind about GOQii’s platform offerings, which I will ask if only someone really wants to know.)

GOQii is offering a full fitness platform which records what you do, syncs with the smartphone. And then the real business begins – The Data Analysis! The data which you earn and record in the device while sweating makes GOQii learn amazing things about you and your health. And in most cases not even a doctor would know what this device would know in a matter of days. Actually any device will learn so many things about your health as and when you start using it regularly, but then why is no one exploring that data? What good does it do to just record the data and then do nothing about it? Thankfully, GOQii chose to do something with that data, and that too for your good – they talk back to you! They recommend, they guide, and they prevent you. They plan to become your personal health monitors in real sense.

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But why did I get so excited? After all this is not rocket science. Exactly! that’s my point – This is nothing rocket science, and yet no one else could built it. No fitness band could create a platform to sell you things which are good for you. Everyone got content after selling you a piece of hardware and a complementary smartphone App. No one could believe that a subscription model can be built which earns a regular income for the company (and hence the hardware price can be subsidized, unlike others fitness bands which are extremely costly). All this, my friends, make this an awesome business model to roll out.

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GOQii, if nothing else, has learnt some good lessons from iPod. And much like iTunes, which accelerated the profit margins of Apple, GOQii’s profitability is hidden inside the platform they have built – Doctors, Coaches, Data based recommendations, all coming to you at a monthly payment. Indeed, this business model is worthy of getting funded by someone like Mr Ratan Tata.

[Before you quit this page, I have a request to make – If you have ever used a fitness band, do share your experience with the hardware. I am really curious to know the quality of these devices and understand how accurate is their data recording ability. And if you have ever used GOQii bands, I welcome you to share your feedback of the device and the platform on my email ID: hi@sarsij.in]

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Amazon 2.0 : Private Labels!


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A recent report by Recode.net suggests that Amazon will soon start selling its own brand of snacks, diapers and detergents. And it is just a matter of time when Amazon Prime members will exclusively get the first taste of Amazon’s brands like Happy Belly and Mama Bear. And prima facie, this move by Amazon can not to be taken lightly by any of those companies who are going to turn into competitors of Amazon pretty soon.

Two factors which actually intensifies the situation are – a) The increasing penetration of online buying for daily needs across the globe; and b) The impressive reach of Amazon in the major markets, including more than 50% of US e-commerce market. This move is sure going to be a trend-changer, or a trend  maker.

While it might not be anything new for a company to adopt Private Label route to increase its effectiveness in the market, the timing of doing so is what makes the whole difference and brings the impact. In past, we have seen companies adopt this route to cut costs, or increase its profitability, or to eliminate their dependence on specific brands. But how many times have you seen a company adopt private label route to establish an increased ‘dominance’ in the market? Probably none so far. I have little or absolutely no doubt that this move by Amazon is certainly going to impact the revenues of several companies, including the ones who are selling on Amazon platform since years. And this also enables Amazon, at least theoretically, to expand its presence beyond the online arena and compete with these consumer brands on their home turf – the offline retail.

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Having shared my thoughts on the Amazon’s masterstroke, a question which remains in my mind – Is it an ethical move? As a platform whose primary goal was to enable retailers/manufacturers sell anything and everything from a single outlet, wasn’t neutrality (towards all its sellers) the founding pillar of the business? Will owning a brand and selling it on the same platform not translate to conflict of interest? To me, it certainly appears like overriding the very founding principles on which the whole company flourished. And some repercussions will soon appear from different segments with-in the market segments.

What is most interesting is that now, it is going to become de-facto strategy for most of the marketplaces across the world (including Indian e-commerce marketplaces) to adopt and promote private label items on their platform to meet the profitability and penetration targets. Like, I can imagine Flipkart racing towards its own line of Fashion & Accessories brands (apart from what it already owns at Myntra), or SnapDeal employing Chinese companies to manufacture SmartPhones for them. All this is bound to happen.

[As a side note, its not that Indian e-Commerce companies were not trying similar things earlier. They approached this problem by incubating suppliers like WS Retail, CloudTail etc. Which was another form of Private Label. However, the recent regulatory move by Government of India has restricted the role of such incubated private label sellers. However, now the chances are very high that private labels floated by these e-commerce biggies will open the floodgates.]

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But how will Amazon India benefit from it? Well, that depends on what Flipkart & SnapDeal (and others like ShopClues & Jabong) choose to do. Let’s say, all these home grown brands adopt the private label route and flood the market. In such a case, Amazon India will become a de-facto platform for selling those originally popular brands to Indian consumers, and hence making Amazon India attract a more price insensitive consumers, and hence lift the company towards profitability & dominance. [If they adopt private label route, Amazon India won’t take that route for sure.]

And what if the e-Commerce biggies of India do not take the the private label route and continue to operate as always? Amazon India will have to suppress its itch to adopt private labels in India, and continue playing its patient game while watching Flipkart & SnapDeal bleed every day.

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Is there anyone who remains unaffected by Amazon’s private label adoption strategy? Well yes, the Chinese e-Commerce companies. They were anyway playing the game behind the secured boundaries provided by the Chinese government. They will continue get ideas from Amazon to up their game in the domestic as well international markets, but remain absolutely unaffected when it comes to serving those 1.3 billion consumer at home.