Lululemon, the well-known activewear brand, is focused on appealing to new customers in international markets and it seems to be flexing the right muscles as it makes its way into China.
Analyst Rick Patel from Needham believes that Lululemon’s approach to expanding in China is commendable. The company has learned from its earlier mistakes in Asia and has taken a measured approach this time. Instead of opening numerous stores right away, Lululemon started by operating “showrooms” across China to gauge interest in the brand and build awareness. The company now has a few stores on the mainland and also sells its products on Tmall, an Alibaba shopping site.
Following its successful strategy implemented in the U.S. and the U.K., Lululemon has been organizing events in China to introduce more people to its brand and encourage participation in yoga. Patel highlights that the company’s first yoga event in China was sold out overnight, and the second event had an impressive turnout of over 10,000 participants due to live-streaming.
Although there is a possibility that Lululemon’s alternative approach may have negative consequences down the line, the initial response has been very positive. The events are drawing large crowds, and sales productivity in key international locations is surpassing company averages.
Overall, the Chinese market holds great potential for activewear. A recent survey reveals that Chinese shoppers plan to increase spending on health products in the coming year instead of luxury goods. Additionally, a study conducted a few years ago projected that the sportswear market in China would surpass its luxury market by 2020.
In Summary: Lululemon’s strategic moves suggest that the brand is on the right track to expand successfully in China.
