Promotion costs rise in 2Q 2015
Fitbit (FIT) products are carried in over 45,000 retail stores and in more than 50 countries. They’re also available via retailers’ websites, through the company’s online store, and through its corporate wellness offering.
To build global awareness, Fitbit is directing the majority of its operational spending to sales and advertising. For 2Q 2015, Fitbit reported $70 million spent on sales and advertising. In comparison, the firm spent only $13 million on sales and advertising in 2Q 2014.
Fitbit (FIT) generates a considerable amount of revenue from wearable, connected health and fitness devices. In 2Q 2015 Fitbit sold 4.4 million devices compared to 1.7 million during the same period last year.
Fitbit intends to sell its products and services in new and existing international markets by expanding its distribution channels with retailers and by forming strategic partnerships. Investing across all geographic regions is the focus of the firm’s Sales & Marketing, Global Advertising segment. Fitbit is also investing in infrastructure that will support its international expansion.
Many companies operate in the wearable health and fitness devices market. Some of these include Garmin (GRMN), Jawbone, and Misfit, as well as traditional health and fitness company, Adidas. Large electronics companies such as Apple, LG, Microsoft (MSFT), and Samsung are also vying for market share in this space. For example, the Apple Watch possesses broad functionality, including some health and fitness-tracking features.