Peloton shares rose about 10% in pre-market trading after the news was announced.
This comes about six months after Peloton rebranded itself as a fitness company “for everyone” and launched a tiered pricing strategy for its implementation. The changes are designed to position Peloton as more than just a bike company and bring in new customers who might not otherwise be able to afford expensive connected fitness equipment but might be interested in a monthly subscription for its content.
“On the one hand, there's a long-term goal around changing perceptions of who Peloton is for multiple different types of audiences, and I think one of the real strengths of TikTok…is that it increasingly reaches everyone, including younger audiences.” Ollie Snoddy, vice president of consumer marketing at Peloton, told CNBC in an interview. In the short term, the partnership will seek to build on what Peloton says is a successful relaunch by boosting metrics like app downloads and conversions, Snoddy said.
During the Covid-19 pandemic, Peloton became a darling on Wall Street after gyms closed and consumers flocked to buy its stationary bikes and home treadmills. But demand declined when the virus receded and consumers returned to their normal lives.
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 ago at the height of the pandemic.
Peloton CEO Barry McCarthy, who replaced company co-founder John Foley in February 2022, is working to get the business right and position it for long-term growth and profitability. He has focused on growing Peloton subscribers and opening new paths to owning Peloton equipment by offering rentals and refurbished options.
While the initiatives are showing early signs of progress, Peloton still isn't making money from its members, making partnerships with companies like TikTok and Lululemon crucial to its long-term success.
“We have over a billion users worldwide across all demographics,” Sofia Hernandez, global head of business marketing at TikTok, told CNBC. “People between the ages of 16 and 60 are on the platform and when I think about it [Peloton’s] “Anyone, Anywhere” campaign, there is no better place to reach this level of audience we have, this level of diverse audience.”
Hernandez noted that the partnership will go beyond workout videos and include “behind the scenes” videos like “Get Ready with Me” clips and other fitness-related content that gives people on TikTok an inside look at Peloton and its trainers. Initially, the content will feature popular trainers like Cody Rigsby and Ally Love, but the partnership also hopes to introduce some of Peloton's lesser-known trainers to a wider audience and boost their following.
“We know that when people try the Peloton experience, they really get it, and they fall in love,” Snoddy said. “It's really about taking the coaches and the content we have and kind of dimensioning it to a broader audience on TikTok.”
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