Lu­l­ule­mon poised to go all-out in China

Cana­dian sports­wear brand eyes rapid ex­pan­sion in the Chi­nese mar­ket fol­low­ing open­ing of first three phys­i­cal stores in the main­land

China Daily (Canada) - - SHANGHAI - By XU JUNQIAN in Shang­hai xu­jun­qian@chi­

Ath­letic ap­parel brand Lu­l­ule­mon wants to achieve growth in China at the fast and fluid pace of power yoga, said its CEO Lau­rent Pot­devin, and it has demon­strated this by open­ing not just one but three stores in the coun­try in the span of a week.

Lu­l­ule­mon made its first pair of pants back in 1998 when yoga was still in a nascent stage in North Amer­ica. The brand has since been con­sid­ered a driv­ing force for yoga across the United States.

The Cana­dian brand first en­tered China with a showroom in Shang­hai three years ago and Pot­devin said that the de­lay in open­ing its first store was down to en­sur­ing that the com­pany was well-pre­pared for the Chi­nese mar­ket.

“What we want is sus­tain­able growth for China. How­ever, sus­tain­able doesn’t mean slow. When I joined Lu­l­ule­mon three years ago, there was no such thing as in­ter­na­tional strat­egy, which is one of the things I am most ex­cited about,” said Pot­devin in mid-De­cem­ber dur­ing the open­ing of the brand’s first store in the Chi­nese main­land.

“Build­ing in­ter­na­tional pres­ence takes time. We build com­mu­nity and en­ergy be­fore build­ing stores. The past few years al­lowed us to re­ally un­der­stand and con­nect with the lo­cal com­mu­nity. Once you have that kind of the mo­men­tum, you know it’s time,” he added.

An ex­am­ple of how the brand has gone about con­nect­ing with the Chi­nese com­mu­nity can be seen in the yoga event held ear­lier in Au­gust where Lu­l­ule­mon’s brand am­bas­sador used video chat app Skype to lead a yoga work­out in­volv­ing 3,500 peo­ple in Shang­hai, Bei­jing, and Chengdu. The event was the largest in the com­pany’s his­tory.

Each of Lu­l­ule­mon’s stores in China — two in Shang­hai and one in Bei­jing — span around 200 square me­ters and are si­t­u­ated in prime lo­ca­tions. More than 90 per­cent of the prod­ucts of­fered at its global out­lets can be found at the China stores, in­di­cat­ing that the com­pany does not see a gap be­tween Chi­nese con­sumers and their in­ter­na­tional peers.

Ac­cord­ing to the com­pany, more shops will be opened in China in 2017, in­clud­ing up to three in Shang­hai.

But while the phys­i­cal shops have only just opened, Lu­l­ule­mon prod­ucts were al­ready avail­able in China in 2015 via its flag­ship store on Tmall, China’s largest on­line shop­ping plat­form by Alibaba.

Dur­ing the Sin­gles’ Day shop­ping fes­ti­val on Nov 11 this year, Lu­l­ule­mon re­ceived more than 10,000 or­ders within 24 hours, mak­ing it one of the fastest-grow­ing brands in Tmall’s sports­wear seg­ment.

Since the launch of its Tmall store, the com­pany has seen a 50 per­cent quar­ter-on­quar­ter growth in sales, and ac­cord­ing to its China of­fice, the trans­ac­tions on Tmall are 20 to 30 per­cent higher than the av­er­age ex­pen­di­ture of its cus­tomers.

“The dig­i­tal land­scape in China is chang­ing very quickly. We don’t have to be in ev­ery mall to be Pot­devin.

“I was re­ally im­pressed by the amount of ex­pe­ri­ences WeChat alone of­fers, such as pay­ing for a cab or a meal. It can also func­tion like In­sta­gram or cre­ate stick­ers. It’s an in­cred­i­ble app but the rest of the world just think it’s just an­other mes­sag­ing app. So, as a com­pany, we re­ally ap­pre­ci­ate the op­por­tu­ni­ties here in China to tai­lor our dig­i­tal strate­gies which might later be ap­plied glob­ally,” he added.

Ac­cord­ing to Lu­l­ule­mon’s five- year plan, the brand is ex­pected to grow from a 2.5-bil­lion-dol­lar com­pany to a 4-bil­lion-dol­lar one by 2020, with the Asia Pa­cific re­gion con­tribut­ing up to a quar­ter of suc­cess­ful,” said its rev­enue. China is ex­pected be a big driver in the re­gion.

Re­search firm Euromon­i­tor In­ter­na­tional es­ti­mated that China’s ath­leisure mar­ket reached a size of $25.3 bil­lion in 2015 and is ex­pected to grow to $43.1 bil­lion by 2020, sur­pass­ing the lux­ury goods mar­ket.

Other ma­jor ath­letic brands are also eye­ing a piece of the mar­ket. Adi­das, for ex­am­ple, said it would add an­other 3,000 more stores in China, bring­ing its to­tal to 12,000 in the next five years. Amer­i­can sports­wear brand Un­der Ar­mour has also said that it is aim­ing to in­crease its sales in China by 25 per­cent per year un­til 2018.

Pot­devin, how­ever, is un­fazed by the com­pe­ti­tion.

“I al­ways think of it this way: we ei­ther have lots of com­peti­tors, or we have no com­peti­tors, be­cause we are so uniquely po­si­tioned at the in­ter­sec­tion of fash­ion and func­tion. As long as we fo­cus on in­no­va­tion, I be­lieve we will con­tinue to lead the mar­ket,” said Pot­devin.

In pre­vi­ous in­ter­views, Pot­devin was quoted as say­ing that the ath­leisure mar­ket is a huge bubble wait­ing to burst. How­ever, he be­lieves that Lu­l­ule­mon’s fu­ture will not be af­fected by this.

“I think ath­leisure is a trend but be­ing ath­letic and mind­ful is more than a trend — it’s a life­style that more peo­ple are try­ing to get into. The trend is ir­rel­e­vant to us,” said Pot­devin.


Lau­rent Pot­devin, CEO of Lu­l­ule­mon

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