Can Yoga Brand Lululemon Play A Good Strategy In China's Market Layout?

According to the world clothing and shoe net, after entering Chengdu, Lululemon The number of stores in China has expanded to 6, and for some 5 years in China, the pace seems slow. On the other hand, CEO said in the interview that it plans to open 4 years of new stores in the year and expand its number of stores in China to 10. This top Yoga brand Is it possible to strike a good China strategy?

After two years of warming up yoga in Chengdu, Canada Sportswear Brand Lulu lemon (lululemon) finally opened its first physical store in the local core business district recently. This is also the first store in Southwest China.

In accordance with the idea of "first warming up and then opening stores", lululemon is developing the Chinese market in an orderly way, which is somewhat similar to the custom of "making friends first and discussing business again". Before opening the door, lululemon often organized various activities locally to get to know the audiences in advance.

Recently, lululemon global CEOLaurentPotdevin revealed in a reporter's interview the new phase of the shop plan: this year it will open 4 new stores in the Greater China region, plus 6 of them, and 10 by the end of this year.

Lululemon formally entered the Chinese market in 2013 and took the lead in Shanghai and Beijing to engage with domestic consumers in the form of "ShowRoom". It was not until the end of 2016 that lululemon formally opened its stores to China, and opened three stores in Pudong, Shanghai, Pudong, Jingan, Kerry and Sanlitun, Beijing.

The top location is consistent with its brand positioning and target audience, which means that lululemon has to pay high rent and labor costs. But for the lululemon, who is confident of doing business in the Chinese market, prudently opening the shop rhythm can buffer the current cost pressure, and online business income is also showing a positive trend, so there is no need to worry too much about the profits of the stores.

LaurentPotdevin said: "we have made a detailed preparation for entering a market. From a retail perspective, China's electricity supplier market is ahead of the world. Opening hundreds of stores is not our idea of expansion. We are not eager to speed up, but to fully understand how many consumers in the market accept our brand, which includes not only existing physical stores or online businesses, but also some new channels for the future.

The good news is that lululemon has been welcomed by Chinese consumers in existing channels. According to lululemon's second quarter earnings report, the company's revenue is on the rise. The Asian market's two quarter performance has increased by 70% over the same period, and the Chinese market is 350%. It is said that the single store business of Chinese retail stores is better than that of North America, with a profit of 15000 US dollars per square meter.

During the reporting period, lululemon's total revenue was 581 million US dollars, gross profit exceeded 297 million US dollars, accounting for 51.2% of net income, which accounted for a slight increase in 49.4% compared to the same period last year, indicating that the company's sales costs and other operating costs are climbing. As a result, net profit in the lululemon period decreased by 9% to 48 million 700 thousand US dollars over the same period. In the first quarter, net profit fell by more than 30%. But the drop in profits is not entirely due to the cost of sales. It is said that lululemon's children's clothing business restructuring cost US $3 million 200 thousand.

At the same time, the future of lululemon, the main female yoga, will also be poured into men's sporting goods and international market, so the current high cost consumption will continue.

Earlier, lululemon set the target to achieve $4 billion in revenue by 2020. The Chinese market will be the key to achieving its goals, and it is also a good time for lululemon to make a difference in China. As LaurentPotdevin said in the above interview, the market for ordinary sports products such as tennis, badminton, running and so on may be very mature, but for us, now is a good time. The market is ready to accept our vertical products. I haven't seen many challenges in the Chinese market, more opportunities. "

Lululemon keeps slow pace in retail sales, but its rhythm is so fast that it is full of legends when lululemon has not entered China.

Lululemon's promotion practice in China is now well known to the industry, that is, through the "opinion leaders" and "social economy" to locate the target population accurately, and then bind it with the latter. At this level, lululemon is taking on the role of "mentor".

In the past two years, lululemon will regularly hold yoga classes to attract local Yoga communities and enthusiasts, and maintain cooperation with the yoga centers around the world. The BrandAmbassador Brand Ambassadors will be used to lead the community to target the population in a targeted way.

It is understood that lululemon has more than 1600 brand ambassadors in the world, including three global Yoga ambassadors, elite ambassadors and store ambassadors. Their main function is to experience products and promote social interaction. Lululemon hopes to create a unique brand image in the minds of consumers through this unique and targeted "intensive farming".

"For example, in the Beijing community, we have brand community managers in the community and fitness coaches, yoga hall, sports hall and other links, and help to expand brand awareness in the community." LaurentPotdevin explains, "we generally do not do traditional market research, mainly by understanding the market and local brand ambassadors, such as knowing the hottest health food in the locals, the hottest yoga studio, the hottest Road, the most popular shopping mall, and choosing the most suitable lululemon area."

LaurentPotdevin also said, "social media and online channels can reflect the understanding and demand for lululemon. For example, this year we held the "UnrollChina Yoga Party" and voted on WeChat to let consumers decide to host a city.

TITIKA, a woman sports brand started from Canada, is also facing a different situation for the Chinese market.

From brand design to product pricing, TITIKA is relatively small, and there are no physical stores in the Chinese market, but only with some fitness studios, and more are interacting with Chinese high-end female consumers through Taobao, Jingdong and other giant business channels. Eileen, the founder of TITIKA brand, told reporters earlier that the company will look for financing in the future to set up the offline outlet of the Chinese market.

Although the volume is different, lululemon and TITIKA both rely on individuals to achieve brand proliferation, especially in the female sports market. "Image" and "emotion" are more important than the "function" and become more durable needs of female consumers. Although how much cash flow and how long it will last, how much of this community operation will last, it will be unknown. But now this trend is really meeting the sports needs or emotional needs of some high-ranking women in the city.

As the reporter has described before, the lululemon, which has been achieved in the community economy, will ultimately rely on the payment of the electricity supplier and the line to complete the revenue. The community is only a tool. Only cash income is a hard currency.

At present, lululemon is being developed in Japan and Korea, or the same method applied in China. All in all, the earlier exploration is more correct. Later expectations of its "cash gift" are higher. Lululemon, which opened 10 stores in China, will directly affect its global distribution rhythm.

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