China's revenue rose 30%, did Lululemon win steadily?

From women's clothing to men's clothing

Developed from a single category to multi -category

It's not easy for Lululemon

Lululemon is definitely one.

Recently, Lululemon released the second quarter of fiscal year in fiscal year, showing that the company's net revenue increased by 29%in the second quarter to $ 1.9 billion.

With a strong development momentum, Lululemon proposed the "New Five -Year Plan" -the target of US $ 12.5 billion in fiscal 2026, including: double men's business revenue, double business revenue, the international market Revenue increases four times.

Some media interpret the key to achieving this goal: men's clothing, e -commerce, and Chinese market.

It is not surprising that the "Chinese market" is alone. In the second quarter of this year, Lululemon's net revenue in the market in mainland China increased by 30%, and the three -year compound annual growth rate was close to 70%. "China" was repeatedly mentioned at the company's telephone financial report in the second quarter of 2022.

Lululemon Fuzhou Vientiane City Store

On the one hand, the performance is unlimited, and the other side is the rapid growth of inventory and many complaints. The second quarter financial report shows that as of the end of July 31, 2022, Lululemon's inventory increased by 85%year -on -year.

Is it inevitable for brand development, or does the terminal market consumption weaken and consumption return rationality? Can Lululemon's five -year plan be achieved smoothly? Can the development of the Chinese market be smooth?

Diversified development and betting on the men's clothing market,

Yoga pants touch the ceiling?

Compared with traditional sports brands such as Nike, Adidas, Andma, Lululemon is a "new species".

The first is the new "age". Lululemon was born in 1998 than Adidas and Nike, which was almost 50 years later and 30 years respectively. Sports costumes, and from the beginning, they have clear their own positioning: middle -class women.

According to the data, Lululemon's target users have clear portraits: women with an annual income of more than $ 80,000 between the age of 24 and 36, have a high education level, have their own house, have an hour and a half every day to exercise, life attitude attitude Motivated.

In response to this segment, Lululemon is highly consistent with middle -class women from product design to online marketing to store style.

Relying on this differentiated play, Lululemon has established a market value of more than 40 billion US dollars in just over 20 years, becoming the world's second largest sports apparel brand second only to Nike.

Although the trail is good, it is easier to touch the ceiling, thereby restricting the development of the brand. So since 2019, Lululemon has successively launched men's and high street luxury brands LAB and personal care series; Mirror, a fitness mirror company in 2020; March this year, Lululemon also launched shoe series, tennis series, men's golf series, and Hiking series products.

Chinese professional golf player Dou Zecheng wearing Lululemon

But from women's clothing to men's clothing, from a single category to multi -category, it is not easy for Lululemon.

From the perspective of men's clothing business, the financial report shows that in the second quarter of 2022, Lululemon's men's business increased by 27%, and the three -year compound growth rate has Super Lady's business. However, the proportion of male category revenue in the past three years has been around 23%-24%. This number is lower in Tmall, mainly female users. According to the magic mirror market intelligence, the overall GMV of the Lululemon men's product line in its Tmall channel was only 14.3%in its Tmall channel.

In July of this year, Lululemon opened the flagship store of Jingdong, and the main audience of the Jingdong platform was male. However, from the perspective of hot -selling products, as of press time, the top 16 sales are women's products. The best -selling men's suit jacket, only 84 evaluations.

It is undeniable that the men's sports market has long been the world of Nike and Adidas. Whether it is basketball, running, comprehensive training, etc., Nike and Adidas have far surpassed Lululemon from mature and comprehensive product categories to SKU numbers. Lululemon wants to enter the men's sports market, obviously unable to be positive with the other party on Nike and Adidas.

On the other hand, the outdoor category of Lululemon's active expansion has already had brand layout.

In the outdoor field, there are Nike and Article of running. There are Kaile Stone, Mengxiang, and Turkish Rats on foot. High -end business has the a little bird. The trend has The North Face. Circle culture.

In contrast, Lululemon's advantage lies in design.

Lululemon told the interesting report to enter the diversified category, and its advantage comes from the design concept of "Science of Feel". This concept is based on the brand's profound insight into guests, understanding the movements they are participating and the feelings they want from it. The brand will spend a lot of time to wear the product to ensure that it is unique when pushing the product to the market, and it can truly solve the needs of guests' unsatisfactory needs. For example, before entering the shoe market, Lululemon noticed that most sports shoes on the market are designed by "he" as first. Women's sneakers have changed slightly on this basis. However, women's feet are different from men. , Their heels are narrow, the front palms are wider, and the toes are short. Therefore, Lululemon's women's shoes are based on millions of women's foot data and cooperate with biomechanics and morphological experts to use different upper materials, foaming, structural design and color to achieve cushioning and supporting balance.

In the eyes of Lululemon, Lululemon's advantage is that its style makes up for the gap between urban leisure and professional sports/outdoor, the fabric is comfortable, and the version can attend ordinary business occasions. From a price point of view, the price of Lululemon thousands of yuan is between Uniqlo and the maiden birds. Light luxury positioning is in line with urban middle -class.

In this regard, Zhang Yi, CEO of Ai Media Consultation, said that in the long run, the strategy of the diversified development of Lululemon is the inevitable development of enterprises to a certain scale. Only through the horizontal product matrix can we have the opportunity to greater the enterprise.

However, some people in the industry have expressed concerns about Lululemon's diversified development direction. Cheng Weixiong, an independent analyst in the shoe and clothing industry, believes that in the Chinese market where consumer demand is changing, the category brands with more segmented scenes are easy to stand out, and all category brands will not be differentiated and personalized. Diversified development is a big challenge for Lululemon.

On the road of diversified, Lululemon is also unable to go around the inventory problem.

The financial report shows that as of the two quarters of July 31, 2022, Lululemon's operating cash flow was net outflow of US $ 145.6 million, and the same period last year was US $ 499.9 million. Among them, Inventories (inventory) is as high as $ 510 million. At the end of July 31, 2022, the company's inventory increased by 85%year -on -year.

In Cheng Weixiong's view, the rapid growth of inventory often accompanies three problems: one is that the product development is too much beyond sales expectations; the other is the lack of new product operation capabilities; the third is that the revenue from new channel development is lower than the plan.

Deeper into the Chinese market,

Localization operation is the key

The increase in the number of stores is another place for Lululemon to value the Chinese market.

In the second quarter of this year, Lululemon opened 21 new self -operated stores worldwide, including 12 in the Asia -Pacific region and 8 in mainland China, including the first city store in Fuzhou and Haikou. At present, Lululemon already has more than 80 stores in mainland China, and the number of second -tier and third -tier cities occupies half of the rivers.

Lululemon goes deep into second- and third -tier cities, can consumers accept the price of thousands of yuan?

Calvin McDonald, CEO of Lululemon, said at the company's telephone financial report in the second quarter of 2022 that there was no price reduction plan. The brand has adopted a moderate price growth on about 10%of the year. So far, no price resistance has been encountered.

However, according to observation, from the price point of view, the price of Lululemon except for yoga clothing is higher than similar brands. In terms of its accessories, shoes and other categories, the price is not much different from the current mid -to -high -end brands on the market. Its hot-selling belt bag is priced at 300-400 yuan, which actually lowered its price line.

In this regard, Cheng Weixiong said that the channel strategy of Lululemon's sinking layout in the second- and third -tier market channels such as Fuzhou and Haikou is correct. China, which really has huge consumption capabilities and consumption scale in China, is in the second and third line markets. Very high, and the consumption of beauty in daily women is not much comparison.

In contrast, Lululemon's biggest difficulty in the Chinese market is actually localized operations.

Data show that in the second quarter of 2022, Lululemon's e -commerce traffic increased by more than 40%. According to financial reports, Lululemon's online e -commerce business revenue accounted for 41.5%. Adidas, Anta, and Li Ning's e -commerce revenue accounted for 20%, 17.6%, and 28.5%, respectively. There is no doubt that online channels have become the core of Lululemon's revenue growth.

However, since 2022, there are 67 complaints about Lululemon on the Black Cat Complaint Platform. Most of them are about quality, price and after -sales service. usually.

According to the data, in May this year, Lululemon was fined 81.42 million yuan by the Beijing Xicheng Market Supervision and Administration Bureau for "good charging". In June this year, Lululemon was complained by consumers because online prices were expensive than product labels.

In this regard, Zhang Yi said that the increase in the number of customers needs to be divided into two. The sales volume has gone, and a certain percentage of the percentage will exist. Lululemon's priority is to set up a marketing team familiar with localized rules. In terms of quality and customer service, it needs to be done more finely, which is conducive to the brand's future growth.

The yoga pants market is windy,

Lululemon has no replacement?

Back to Lululemon's main yoga track, as Lululemon brought fire yoga pants, the yoga market continued to expand.

GWI's "Global Sports Fitness Economy Report" shows that under the impact of the epidemic, the global sports market has declined in recent years, but the static sports penetration rate mainly based on yoga and Prate has increased from 3.78%in 2018 to 2020 in 2020 5.25%; the market size increased from US $ 29.1 billion in 2018 to $ 29.6 billion in 2020.

The yoga market is already a red sea, and in recent years, brands have continued to influx.

According to public information, Nike divided yoga products into independent brands in 2019, and launched the Infinalon Yoga series and Nike Yoga series products priced between 200-500 yuan; Adidas invited the former CEO of Lululemon as its women's business strategic consultant, and Multi-category products such as women's sports bras and tight pants are launched; yoga pants priced at 39-59 yuan of Decathlon Tmall flagship stores have already commented on more than 10,000 buyers.

In addition to sports brands, yoga pants products are also launched under the banana of sun protection, with a single sales of more than 10,000; Urban leisure fields, Uniqlo contributed to yoga tracks, with over 10 yoga -related clothing.

However, Lululemon's larger "threat" comes from domestic professional yoga brands that touched Lululemon crossing the river.

According to iResearch data, in the first half of 2021-2021, there were 27 investment and financing related to yoga clothing, and it was mainly concentrated in A round. The total investment and financing amount of the industry exceeded 660 million yuan.

In recent years, new brands in the domestic yoga market have frequently emerged. There are Jiaoma, MAIA Active, particle fanaticism, and rags, as well as the price of 300 yuan. The common characteristics of these brands are all the sinking markets.

However, some assessment agencies compare the yoga pants of different brands together. Compared with the difference in the shape of yoga pants, the shape, craftsmanship, and wearing experience are far from Lululemon.

In this regard, Lululemon explained the research and development of NULU ™ fabrics as an example. At the beginning of the design, Lululemon's product designer has been considering what kind of dressing experience do Yoga practitioners want to get? The answer is: skin -friendly nakedness, unrestrained, as if nothing.

To this end, Lululemon started the research and development of Nulu ™ fabrics. The design team continuously adjusts the proportion of nylon and elastic fibers, adds Lycra® amino ammonia to make it more compatible with four sides. In addition, the design team also innovatively used a unique hair grinding technology to make a new improvement in the dressing experience. During the research and development, Lululemon continued to invite guests to try on the experience, including many yoga practitioners and athletes, and continued to optimize iteration.

However, from Kevin, the product manager of the NERFASSY sports fabric in Italy, Chinese manufacturing in the field of clothing has not been unable to do and do not do well. In the final analysis, there are two words: cost.

From the perspective of its Align's fabric, the fabric uses Nilit yarn + LYCRA® spandex combination, which is the ceiling of the yoga fabric industry. Israel imported Nilit Nylon 66 'yarn, with the ultra -light and soft and fluffy characteristics, wearing experience like "second layer of skin". The disadvantage is that this yarn is particularly expensive, and only some brands with high -end positioning will choose.

Another example is the hair grinding process. The most common hair grinding process on the market is sand grinding and carbon grinding. The processing costs are low, but it is easy to cause uneven fabric grinding hair, frizzy, and clothing easily. The hair grinding process adopted by Lululemon can better enhance the wearing experience of nude feeling. The disadvantage is that the equipment is very expensive and the processing costs are particularly high.

In this regard, Zhang Yi said that Lululemon's firm status in the yoga market is the result of deep cultivation for many years. From the material workmanship to the user's personalized experience, all work, such as Adidas, Nike, Uniqlo and other brands. Although they also make yoga pants, they lack accumulation. Make yoga pants that compete with Lululemon.

In Cheng Weixiong's opinion, there are still a difference in the segmentation of women's yoga movements. Lululemon already has the brand's premissions advantage in the mid -to -high -end layout. The industrial advantages and market advantages may be more important than the extension of sports scenarios such as running, hiking, and tennis in the traditional fields of Nike and Adidas.

Reference materials:

Yoga pants with fire disk, e -commerce proportion exceeds Nike Adi | Titanium Media

A pair of yoga pants hit the world, why did Lululemon super the market value super Adi? | "Finance" magazine

The picture of this article is provided by the interviewed brand

Author: Jia Shihui

Head map design: Wang Huan

Editor on duty: Wang Lin

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