Most women with the hobby of fitness in the western countries wouldn’t mind owning a piece from Lululemon.

A great deal of fitness enthusiasts, who are women, in the western culture would never mind having an extra piece from Lululemon

Lululemon is a high-end sportswear brand established within Canada in 1998. The consistent brand image and reputation of healthy lifestyle, it has rapidly caught the attention of the female population in the western countries, outshining other sportswear brands.

In 2015 when Lululemon first entered the Chinese market, the popularity sportswear industry in the western countries was slowly regressing. While sportswear in western countries were regressing, the sportswear industry was swiftly progressing.

According to the marketing analysis by Euromonitor, statistics have shown that since 2014 to 2015, sportswear industry have grown from 239 billion USD to 266 billion USD. The international marketing agency, Mintel, also estimated the value of the sportswear industry in China for 1254 billion Yuan, and up to 2200 billion Yuan before year 2020.

In the general perspective, the sports equipment and sportswear in China is progressing in its value. And with the quality of life is advancing, there’s a growing population for health and fitness, and consumers demands have revealed a new business opportunity for entrepreneurs.

As Lululemon have hit its plateau in the western countries presently, oversea expansion is necessary and crucial. With a population of 1.3 billion people, such as China, have shown Lululemon its potential. Lululemon anticipates a 25% revenue generation from Asia by 2020, while expanding product line to improve total revenue internationally.

How to have a place in the industry

Community Development

In the plan to enter the Chinese industry, Lululemon first created a hype for the brand by opening showrooms. In 2013, Lululemon opened three showrooms displaying all product lines in Beijing and Shanghai, while educating consumers of health awareness, and fitness to build brand awareness and increase brand exposure.

Unlike the traditional marketing strategy, Lululemon is focused on work of community, culture and engagement for its conversions.

Through the hosting of yoga studios and fitness centre with free fitness classes, like yoga, cardio, kick-boxing to create their own community and group of consumers.

Following a completed session of yoga, Lululemon is able to leave a remark in the consumers, of their product, brand philosophy, while allowing Lululemon to gain data of the targeted audience behaviour and type of audiences.

Taking Beijing for an example, Lululemon has specialized brand managers, trainers, yoga studios, fitness centres to reach out to the community, while introducing the brand to the community. Lululemon also accounts the popular healthy food selection, yoga studio, street intersections, and shopping malls to finalize a suitable revenue for its events.

In 2016, Lululemon hosted a yoga session in the Forbidden City of Beijing, Shanghai, and Chengdu with over thousands of individual participated in the yoga session together. In the continuation of the yoga session, there were over 10,000 participants in 2017 within the city of Shanghai, Hangzhou, Guangzhou, Chengdu, Shenzhen and Beijing.

With over three years of fitness education and preparation, Lululemon have opened three stores in Shanghai and Beijing in the December of 2016, with its Chinese online website.

KOL (Key Opinion Leaders)

The difference between Lululemon and other sportswear brand is that, Lululemon prefers to make use of influencers highly relevant to target audiences, such as using yoga instructor to influence consumers. Lululemon also sponsored 20 of the most popular yoga instructors, trainer, fitness influencers in the area during the opening period of the store to further brand exposure within the community.

The key opinion leaders (KOL) of the fitness field directly influence their followers and student, offering them an opportunity to get to know the brand, while the instructor will also gain followers and become more popular as well, obtaining a win-win outcome for both parties.

This is the difference of Adidas, Nike and other sportswear brand, who expenses over billion dollars of USD to appoint famous sportspeople for advertisement. Lululemon uses the influence of KOL and their followers to know the brand, while collecting feedback to improve their products.

In the promotional video produced by Lululemon in 2016, targeting the Chinese market, several sports ambassadors of China were invited to be filmed for their aspiration on the journey of sports. These brand ambassadors were carefully chosen by Lululemon, such as, Min Lin, a yoga instructor who is in a national ping pong women’s team, an outstanding diving athlete from China name Ao Lin Wang, and more. The video has been exposed 24000 times and 2600 views.

Online Marketing

TMall have become the crucial platform for branding and sales channel for Lululemon in China.

Before entering the Chinese market, Lululemon have set their eyes on the middle-class consumers of TMall. Fortunately, the health awareness of the TMall consumers is well matched with the brand target audience.

After partnering with TMall since November of 2015, the online sales of Lululemon in China have increased up to 350%. In 2016, TMall yearly sales for Lululemon have increased by 50%. And in 2017, there is a 175% increase in traffic, which is over doubling the previous records, with an extremely high conversion rate.

According to Laurent Potdevin, the cause for a sudden revenue generation for Lululemon is promoted by the opening of the new store and increase of TMall sales.  With the combination of the fitness studio and digital sales channel, Lululemon have successfully pin down the demands of the consumers and market.

To successfully obtain more consumers, Lululemon, who rarely have discounted items for seasonal items, have adapted to the Chinese culture by having a sale event on November 11 (11-11) on TMall in 2016. During the sale, Lululemon have incorporated lottery and dollars off purchases over certain amount, when Lululemon in the western countries rarely have sale or events on regular seasonal pieces.

In the social media aspect, Lululemon received high level of attention and popularity on Facebook, Twitter, and Instagram. However, Lululemon have selected Wechat as a platform to penetrate the Chinese market. Lululemon have created a Wechat official account to closely interact with the consumer group and community, then later creating an Weibo account, obtaining approximately 100,000 followers at the moment.

Strategic Planning

In comparison to other brands, Lululemon highly prefers feedback from locals and Chinese consumers, because Lululemon is able to cater to the audience from its feedback in selecting address, interior designs, and more.

Many of the Lululemon locations in western countries are mostly located on populated streets with clean and simple interior designs, and some locations closes after 6 P.m. too.

However, in order to cater to the target audience in the Chinese market, the three locations when Lululemon first opened in Beijing, Shanghai, and Hong Kong are all located in a high-end shopping mall. For example, for the Shanghai location, Lululemon is located in the Kerry Centre next to luxury brands such as Boss and Burberry, becoming the only sportswear brand on the floor.

For the Beijing location, Lululemon have set up all the product racks to be maneuverable to adjust to the flow of clients during the weekend.

In terms of the interior design, the Kerry centre location in Shanghai imitated the two large tree pillars, inspired by the trees by the street in the Kerry centre area. The Taikoo Li Sanlitun location incorporated traditional Beijing style. And to celebrate the grand opening of the location, Lululemon have also invited Chinese traditional artist to design several yoga mats.

To celebrate the New years of 2018, Lululemon have created 10 symbolic practices that is suitable for every day, with the traditional Chinese culture as the inspiration. Such as, the lion dance to represent the practice of willpower, giving red pockets as the practice of sharing, practice of traveling to represent curiosity and discovery. Through this concept, Lululemon have shown its care and affection for the Chinese population and culture, while promoting the uniqueness of the brand.

Product Line Expansion

Aside from entering into a new market, Lululemon also has plan to expand the product line, such as New York, many of the sportswear have released men’s sportswear for swimming, running, biking, and more.

As the key focus for Lululemon is China, product line for men is undeniably important.

In the IFC Shanghai location for Lululemon, the men’s sportswear is the focal point of the store, with male education to attract male consumers. Also, to balance for the gender differences, Lululemon have designed black shopping bag for male consumers rather than using the typical shopping bag with red and white.

An Opportunity and a Challenge

In the future, China will become Lululemon’s focused market, but will the market bloom as have the western country is an unknown factor.

Small consumer group

Using the unique marketing strategy and its specific targeted audience, Lululemon have received the interest of yogi (yoga enthusiast), but due to the specificity of the audience, Lululemon attained a narrowed community and consumer group.

The yoga industry in China are largely white-collar population’s favourite, but white-collars not always enthusiasts, therefore fulfilling the minimum is all these hobbyist needs than to invest in products that are yoga designed.

In comparison, brands such as Nike, Under Armour, even Gap or H&M are directly and indirect competition in the sportswear industry, occupying a part of the audiences for running, tennis, fitness related.

High Price Tag

The pricing aspect of Lululemon is quite disadvantageous, especially in China for consumers.

According to observations, the retail price of Lululemon products on TMall is 150% – 180% of the international website. Excluding the taxes and currency differences, there still remains large amount of competition.

For example, one of the best-selling yoga pants called Align Pant is 98 USD dollars in United States, approximately 677 yuan. However, on TMall, the price of Align Pant is 850 yuan, resulting a 25% increase in price difference.

The pricing in China have caused the brand to lose its advantages, also due to the cultural differences, yoga wear is mostly only worn during its practices for the Chinese population, thus lowering value of the yoga wear.

In another aspect, brands such as Nike, Adidas and Under Armour also compete in the market, additionally with other clothing brand that provide sportswear. Under the conditions of lower brand awareness in the entire population and the amount of competition, Lululemon have fallen into some restrictions for its expansion and marketing channels.

The Unique Aspect of the Chinese market

The Chinese market have a unique aspect to it in comparison to other countries, as an foreign business such as Lululemon face more challenges than opportunities.

The trending of casual sportswear style is well-known, but competitive for brands involved.

With the present existence of Nike, Adidas, Under Armour and similar brands of specialized sportswear occupying wide market, and fashion clothing brands like Zara, Uniqlo, and H&M expanding their own sportswear line, causing the sportswear industry to be extremely competitive.

For a brand like Lululemon, that is focused on interaction and experience-based marketing strategy, it’s difficult to have their own spot in a fast-paced industry like China. Although Lululemon is attempting to attract more consumers with new products to expand to other sportswear line, the yoga brand image restricts the type of consumers for their brand. This is an obstacle Lululemon must consider, as the new generation of consumers have displayed the following of tends and sports.