The US continues to drive revenues for Fitbit
In the United States, Fitbit’s (FIT) biggest focus is on the significant expansion of its shelf space. Fitbit expects the top four retailers in the US to increase the linear footage of its displays by over 50% to accommodate leading products such as Blaze, Alta, and related accessories.
The revenue Fitbit generated in the US rose by 32.6% in 1Q16 to $351.68 million, which was up from its $265.30 million in 1Q15. Fitbit grew its store count in Canada and expects shelf space expansions here as well.
China important for revenue growth
In Europe (EFA), the Middle East, and Africa, or EMEA, Fitbit continues to see substantial growth due to increases in adoption driven by interest in new products, marketing activities, and stronger relationships with key retailers. EMEA accounted for 15% of 1Q16 revenues, as compared to 10% in 1Q15. Revenues from this region grew by 113% YoY (year-over-year) in 1Q16.
The UK and Asia-Pacific
The United Kingdom remains the largest market in Europe, and its revenues grew by 54% YoY in 1Q16. But revenues from Germany (EWG) rose by 385% YoY.
Asia-Pacific accounted for 11% of 1Q16 revenues and grew by 142% YoY. Fitbit stated that it continues to focus on expanding distribution and driving marketing activities in the more nascent Asia-Pacific countries. In India, it has a good distribution through Amazon.com (AMZN) and the Reliance retail chain.
Language and localization customization
Fitbit had previously stressed the importance of language and localization customization to compete in China, Japan, and Korea. The firm announced that some of these customizations will be launched in 2Q16. Last week, Fitbit announced its intent to enter into a strategic partnership with Alibaba (BABA).
Notably, Fitbit CEO James Park stated that “We believe the opportunity for us in China is significant, and we’re excited about reaching millions of Chinese consumers through our partnership with Alibaba’s Tmall platform.”