Peloton launched a partnership with TikTok on Thursday as part of its strategy to change its public perception and attract a broader array of customers as sales and profits fall.
The partnership will create a new fitness hub on the social media platform dubbed “#TikTokFitness Powered by Peloton.” It will feature short-form fitness videos, longer live classes, content from Peloton’s instructors and collaborations with TikTok creators.
Shares of Peloton surged more than 15% after the news was announced and closed about 14% higher.
It comes about six months after Peloton rebranded itself as a fitness company “for all” and launched a tiered pricing strategy for its app. The changes were designed to position Peloton as more than just a bike company and bring in new customers who may not have been able to afford its pricey connected fitness equipment but could be interested in a monthly subscription for its content.
“On the one hand, there’s a longer-term goal around changing perceptions around who Peloton is for to multiple different types of audiences and I think one of the real strengths of TikTok … is that it increasingly reaches everyone, including the younger audience,” Oli Snoddy, Peloton’s vice president of consumer marketing, told CNBC in an interview. In the short term, the partnership will seek to build on what Peloton says has been a successful relaunch by boosting metrics such as app downloads and conversions, said Snoddy.
During the Covid-19 pandemic, Peloton became a Wall Street darling after gyms shuttered and consumers flocked to buy its stationary bikes and at-home treadmills. But demand plummeted when the virus receded and consumers returned to normalcy.
In the three months that ended Sept. 30, Peloton lost 30,000 members and revenue fell to $595.5 million, down from $757.9 million three years earlier at the height of the pandemic.
Peloton CEO Barry McCarthy, who replaced the company’s co-founder John Foley in February 2022, has been working to rightsize the business and set it up for long-term growth and profitability. He has focused on boosting Peloton’s subscriber count and opening up new pathways to owning Peloton equipment by offering a rental service and refurbished options.
While the initiatives are showing early signs of progress, Peloton still isn’t making money off the members that it has, making partnerships with companies such as TikTok and Lululemon critical to its long-term success.
“We have over a billion users across the globe of all demographics,” Sofia Hernandez, TikTok’s global head of business marketing, told CNBC. “People from 16 to 60 are on the platform and when I think about [Peloton’s] campaign of ‘anyone and anywhere,’ there’s not a better place to reach that level of audience we have, that level of a diverse audience.”
Hernandez noted that the partnership will go beyond workout videos and will include “behind the scenes” videos such as “get ready with me” clips and other fitness-adjacent content that gives people on TikTok an inside look into Peloton and its instructors. At first, the content will feature well-known instructors such as Cody Rigsby and Ally Love, but the partnership also hopes to introduce some of Peloton’s lesser-known instructors to a wider audience and boost their followings.
“We know that when people experience Peloton, they really get it, they fall in love,” said Snoddy. “This is really about taking the instructors and the content we have and kind of dimensionalizing it to a broader audience on TikTok.”
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