Lululemon Athletica wants to explore China’s untapped cities more to grow the brand despite slow consumer spending.
San Yan Ng, Lululemon’s country Manager Director, said there are still many untapped opportunities in China. “If you go to second-tier and third-tier cities, it’s vastly different.” She made these comments at the Future China Business Forum in Singapore.
When questioned about China’s slow economy, the Lululemon executive said one shouldn’t focus on the broad numbers. “There’s a need to focus on where the growth opportunities are and where we can expand,” Ng highlighted. “Chinese customers care more about the experience. It’s no longer about buying a t-shirt for the sake of the t-shirt, there’s a shift from material goods to experience.”
Rachel Wolff, an Emarketer analyst, said China continues to be a major growth engine for Lululemon. The retailer takes advantage of a relative lack of competition to establish itself as a dominant premium athleisure brand in the market.
Adrienne Yih, an analyst at Barclays, said Lululemon is positioning itself in Shanghai as a premium brand, in the athletic category, and as a luxury brand. It’s resonating with consumers through localized community messaging focused on empowerment. Yih said Lululemon’s management sees China mainland as a $33 billion athleisure market likely to experience tailwinds from Beijing’s ‘Healthy China 2030’ directive supporting physical well-being.
Lululemon has laid out a strategy to reach its goal of international sales representing half of sales predominantly by China. Market analysts agree that the brand carries credibility in tier 1 markets such as Shanghai.
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