作者｜Magic Li 编辑｜Mos Wu
Image source: Lululemon
At the opening ceremony of the 2024 Paris Olympics, Lululemon's Olympic jersey for the Canada team became the focus of heated discussions, and netizens said that it was "far worse than the previous one". Coincidentally, in the past two years, the Lululemon brand itself has gone through a rollercoaster of ups and downs.
With the brand's stock price volatile, Lululemon has been on the cusp of the sports brand buzz. In 2023, Lululemon's share price climbed from $320 per share to $511 per share, an increase of 60%. However, since the beginning of August, Lululemon's stock price has fallen from $505 per share at the beginning of the year to $249 per share, a drop of 51%, due to the departure of Chief Product Officer Sun Choe and the restructuring of the company's product and brand teams.
Although Lululemon's stock price has fallen sharply this year, the brand is still vibrant in the Chinese market. Recently, in addition to the official announcement of the brand's cooperation with Jia Ling, the largest store in North China set up in Chengdu also ushered in a grand opening at the end of June. A brand that originated in North America and Canada has ushered in the most vigorous vitality in the Chinese market.
Chinese market
Lululemon 的未来之地
At the beginning of June this year, Lululemon released its first-quarter earnings report, in which Chinese mainland revenue increased by 45% year-on-year to $304 million; The United States market grew by only 2%, and the Canada market grew by 11%, ultimately leading to a 3% increase in the Americas. It can be seen that Lululemon's stock price has been "sung" mainly due to the sluggish development of North America. At present, the weakness of the brand in the North American market and the rapid growth in the Chinese market have begun to show a clear gap and unevenness.
In North America, Lululemon's growth rate has already shown signs of slowing: brand revenue growth was 29% year-over-year in 2022, while revenue growth slowed to 12% year-over-year in 2023. The slowdown in the North American market can be attributed to the middle-class spending cuts due to inflation and rising prices, and the relatively high-priced Lululemon is beyond the budget of some people.
On the other hand, Lululemon is also facing pressure from competitors who are designing more youthfully. Among them, Alo Yoga, known as "Lululemon's number one rival", is increasingly becoming a new choice for "rich girls" in North America. Alo Yoga's design is more in line with the aesthetics of today's young people, and it is more fashionable and fashionable, and at the same time, Alo Yoga is also more topical under the outfit demonstration of social media celebrities such as Kendall Jenner and Hailey Bieber. The Wall Street Journal once called Alo Yoga "the most representative outfit of our time."
Known as "Lululemon's number one rival", Alo Yoga is increasingly becoming the new choice for "rich girls" in North America.
Image credit: Alo Yoga
On the other hand, in China, Lululemon still has a lot of room for development. In a conference call after the release of the brand's first-quarter earnings report, Lululemon CEO Calvin McDonald pointed out: "We are still in the early stages of development in Chinese mainland, and there is huge room for growth in terms of store expansion, digital business, brand awareness, etc. ”
Lululemon's development in Chinese mainland is unparalleled, and brand CFO Meghan Frank also indicated in the conference that Lululemon expects to open 35 to 40 self-operated stores in fiscal 2024, except for 5 to 10 stores in the American market, the rest of the stores will be mainly concentrated in Chinese mainland.
Calvin McDonald, CEO of Lululemon, once pointed out: "We are still in the early stages of development in Chinese mainland, and there is huge room for growth in terms of store expansion, digital business, brand awareness, etc. ”
Image source: Lululemon
It can be seen that the Chinese mainland market will become the main position for Lululemon's future development. However, the development of this sports brand in China, which has ushered in the explosive growth of "yoga wear", is gradually reaching a plateau, and the brand is actively planning a new strategic plan.
From "Yoga Pants Brand"
to the multi-sport brand
Lululemon's ability to enjoy the "dividend" in the Chinese market is due to the brand's early entry into the market and the fact that it has established a user mental barrier in the yoga industry. Looking at the global data performance last year, Lululemon's Chinese market growth rate was as high as 67.2%, while other brands such as Alo Yoga, which is hot in North America, have not yet launched a strategic layout in the Chinese market.
In China, Lululemon, which often costs more than 1,000 yuan, has long been no longer just a functional item, but has become a status symbol of the "new middle class". However, Lululemon, which broke through the market with yoga pants, found it difficult to get around the Möbius ring it set up for itself, and even had some "restless" flavor: at present, most Chinese consumers' perception of Lululemon is still focused on the yoga pants category, and there are no other "memory points", which will undoubtedly greatly limit the development of the brand.
The brand's development in the Chinese market is also trying to break the stereotype that "Lululemon is a women's yoga wear brand". For example, the brand's new Taikoo Li Chengdu storefront, a three-storey store with an area of more than 1,300 square meters, has a layout that puts the menswear collection on the first floor, interspersed with casual clothing, sports accessories and other items in addition to sports functional products on the first and second floors, and the most classic yoga pants on the third floor.
This layout undoubtedly shows two strategic directions of the brand: First, Lululemon has begun to continue to make efforts in the menswear category. In addition to the above-mentioned increase in the proportion of menswear products, the brand has also continued to launch menswear pop-up stores. In the past year, the brand has successively landed men's pop-up stores in Shanghai Hongqiao Tiandi and Shenzhen Yitian Holiday Plaza.
Lululemon 于今年 6 月底在深圳开启快闪店。
Image source: Lululemon
Secondly, Lululemon is not only for the yoga pants track, but also as a comprehensive sports brand that takes into account the multi-field athleisure scene. From another point of view, such a "big and complete" brand layout and business play may also be because Lululemon has not yet found a core product that can bring the brand the second largest growth advantage in addition to yoga pants, so it has to broaden the overall product development trend horizontally, and this is also a concern for Lululemon - once the inventory quantity becomes high, the brand's profit margin will also be lowered.
Sinking market
Lululemon 的下个增长点
Although the comprehensive development of the brand will bring more growth possibilities for Lululemon, it also faces risks such as inventory problems and profit margins. Therefore, brands may want to explore what kind of sports brands Chinese consumers are more eager for from the perspective of user needs, which may bring new ideas to Lululemon's next growth point.
When urban sports are gradually integrated into people's daily life, sports brands with more diverse designs and higher cost performance will undoubtedly become the first choice of more consumers. China is a manufacturing powerhouse, which means that white-label products such as "Lululemon Pingti" and similar competitors will continue to compete for market share in yoga pants. Domestic brands of 100 yuan yoga pants such as COCOFIT, Particle Fever, VFU, and others are booming. Among them, Particle Fever has completed six rounds of financing, the latest exclusive investment by Hillhouse Capital, with a valuation of 1 billion.
Despite the advantages of the new middle class, the real business opportunities in China will always be in the wider mass market. In this regard, Lululemon also smelled the change in wind direction and began to charge into the sinking market.
First of all, from the perspective of spokespersons, Jia Ling's fan base is not only limited to the middle class, but is more popular, which greatly broadens the brand's popularity. Secondly, the brand continues to increase the layout of e-commerce platforms: in January this year, Lululemon officially launched the official flagship store of Douyin to reach the mass market; In this year's 618 promotion, Lululemon, which had never lowered its price before, also began to participate in discount promotions.
今年一月,Lululemon 正式上线了抖音官方旗舰店。
Image source: Douyin screenshot
Finally, when choosing a location to set up an offline store, brands are also starting to consider more second- and third-tier cities. Since last year, the brand's offline stores in Shijiazhuang, Zhengzhou, Qingdao, Guiyang and Foshan have been opened one after another. However, while the sinking market can bring new business opportunities for Lululemon, it is not a good place to have it. It may be difficult for brands to balance the desire to capture the middle class with superior spending power and the expectation of more consumers in the sinking market.
Whether it is to develop the men's wear category, expand the sports scene and track in multiple fields, or actively open up the sinking market, it can be seen that in the face of the development bottleneck in the Chinese market, Lululemon is actively laying out corresponding strategies. Lululemon has a good market foundation in China due to the advantages of time and place, but if it wants to continue to move forward in a red ocean, the brand may need more market business insights and marketing explosions.