In the second quarter of this year, lululemon‘s revenue for yoga leggings in the Chinese market was $277 million (about 2 billion RMB), a year-on-year increase of 61%. So far, the Chinese market revenue in the first half of this year has reached $527 million (about 3.8 billion RMB), a year-on-year increase of 69%, making it the fastest growing region in the world.
On September 1, lululemon announced its financial report for the second quarter of fiscal year 2023-sales increased by 18% year-on-year to $2.21 billion (about 16.052 billion yuan). Among them, the most striking is the Chinese market.
Why do a pair of yoga pants priced at thousands of dollars sell well in China? Many consumer investors have studied lululemon in depth, trying to find successful experiences that can be replicated. In recent years, this sportswear brand from Canada has broken into the lives of Chinese women and has become one of the three treasures of middle-class women.
After ten years in China, a pair of thousand-yuan yoga pants has swept middle-class women.
This year marks the 10th anniversary of lululemon entering China.
Back in 2013, lululemon established a company in China – Lululemon Trading (Shanghai) Co., Ltd. to enter the Chinese market. Subsequently, lululemon opened its first showroom in mainland China in Xintiandi, Shanghai.
In the following three years, lululemon only had showrooms, organized various free community events and fitness classes, and promoted the beauty of yoga. In September 2014, lululemon opened a second showroom in Shanghai Mall. In October 2015, lululemon opened its first showroom in Beijing in Sanlitun, Beijing.
As for profitability, lululemon is not in a hurry; brand penetration is the first step. Before consumers fall in love with the brand, they should fall in love with yoga or even sports. This is lululemon’s first step.
Finally, on a weekend in mid-December 2016, lululemon opened 3 stores at once—Shanghai Pudong International Finance Center, Shanghai Jing’an Kerry Center, and Beijing Sanlitun store opened almost simultaneously. The fans accumulated over three years became the first batch of customers, quickly spreading word of mouth.
Subsequently, lululemon started the pace of rapid domestic expansion, especially in 2022, with an average of one lululemon store opening every 15 days. According to the official website, in six years, lululemon has opened 126 stores in China, making it the fastest growing country in the world.
While opening stores, lululemon has been operating its best “community activities” very well. In the past ten years, lululemon has signed 143 store ambassadors from 23 cities in China, who are also known as “product education officers”.
These product education officers not only regularly recommend suitable products to consumers but also take them to participate in store activities to promote yoga culture. In large-scale group activities, they introduce lululemon’s professionalism, preference for women, and encouragement of self-worth exploration.
After repeated exposure, consumers gradually stop caring about the price of a pair of yoga pants worth thousands of yuan and pay more attention to value recognition.
Amanda Casgar, director of lululemon’s Asia-Pacific brand and community, once said, “I guarantee you that in the near future you will see Chinese people abandoning Prada high heels and designer bags but enjoying brunch in yoga pants.”
Judging from the results, lululemon has achieved this. Today, lululemon is no longer limited to the yoga scene. It is more like a value symbol preferred by the middle class, appearing in various scenes, whether it is on the way to shopping, in the coffee shop on the corner of the street, or in the CBD office scene, lululemon can be seen everywhere, and it has even replaced jeans in the hearts of some women.
The Chinese market is also becoming more and more important to lululemon. Originally lululemon divided the regional market into the United States, Canada, and other regions outside North America, but since the fourth fiscal quarter of 2022, the Chinese market has been listed separately because China’s contribution has gradually caught up with its native Canadian market and surpassed it in the second quarter of fiscal year 2023.
However, the Chinese story belonging to lululemon is far from over.
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