KFit buys Groupon Malaysia

KFit co-founder Joel Neoh

Three months after acquiring Groupon Indonesia, fitness startup KFit today announced that it has bought the ecommerce group’s Malaysia operations.

The move solidifies KFit’s foray into the deals space. Prior to this transaction, the company added deals for massage and spa on its app, and launched a separate deals app called Fave.

Fave offers people vouchers for food and certain activities, with discounts ranging from 10 to 70 percent. It’s available in Kuala Lumpur, Jakarta, and Singapore, listing over 3,200 businesses across these cities.

The Groupon acquisitions will be absorbed into Fave early next year, and “expand Fave’s offerings to cover restaurants, beauty, wellness, gyms, studios, hotels, holidays, leisure, entertainment, and professional services,” KFit co-founder and CEO Joel Neoh tells us in a phone interview.

Founded in 2015, KFit gained popularity by offering unlimited gym and fitness classes for a fixed monthly fee. It tweaked its model this year, limiting membership to 10 classes per month, and then branched out into deals for massage, spa, and beauty services in a bid to gain a new revenue stream.

Joel has his roots in Groupon Malaysia, where he served as CEO in 2010. He later on stepped up to head Groupon’s Asia-Pacific operations.

Reviving deals

With the Groupon buys, KFit seems to be going for a business model that’s outdated. Deals sites, including Groupon in the US, have downsized their operations in the past couple of years following fatigue among consumers.

Groupon itself exited several countries, laid off staff, and was forced to evolve into a full-blown ecommerce company, with product retail operations and an online marketplace, to keep going.

Joel says Fave right now is 90 percent the original Groupon. “I myself ask the question of whether there’s a future before I sleep,” he candidly shares.

But he believes the direction they’re taking makes sense. “We didn’t acquire Groupon to be just Groupon.”

He says they plan to succeed where the US deals giant failed – which is to innovate and localize well.

In Indonesia, Joel says Groupon’s achieved “nearly 2x growth since our acquisition” because they made the product into something merchants were comfortable to use.

“When we acquired Groupon Indonesia in August, only 5 percent of the merchants on the platform had digital voucher redemption and 95 percent still used paper. Today, 80 percent accept digital,” he claims. “The merchants had different things they needed and we were able to come up with a tool that captured most of their requirements.”