Lulu Lemon Harvests Chinese Celebrities And Sells Yoga Pants To Sky High Prices

The picture in the mirror is satisfactory. The ratio of hip and leg wrapped by tights is perfect, round and straight, and it is graceful and slender. That's it! The girl did not hesitate to go to the cashier's desk, in front of beauty, the number on the price tag seemed nothing.

Located in the West Lake of Hangzhou, lululemon lakeside Yintai in77 store has been opened for less than three months, and there are a lot of people on weekdays. Adjacent to it are luxury brands such as Gucci and YSL, which are quite in line with their reputation of "Hermes in yoga clothes".

Who is lululemon?

It's a strange name for Lu. But it can sell yoga pants to 1000 yuan, which makes Chinese middle-class upstarts and sports celebrities chase after each other. They stand at the top of the contempt chain, and are proud of Nike and Adidas.

In 2007, when the founder of NASDAQ lumondak went on the market, the price of the company rose by 17 times.

Lululemon is well positioned to make $4 billion a year with fewer than 500 stores worldwide (fy19 data). In 2017, the annual sales of lululemon's Direct stores were as high as 17000 US dollars (about 120000 yuan) per square meter, and Nike was even less than a third of it.

Well known retail stores in the United States: Huatai Securities

Now, the fierce lululemon is expanding against the trend. Is Nike ADI afraid?

China's e-commerce penetration rate is 42%

Not long ago, it announced the acquisition of lumon home fitness company for $500 million.

Under the epidemic situation, many international sports giants have been impacted, tightening their belts to survive, while lululemon is expanding against the trend.

Look at Nike, Adidas. From March to may, Nike reported a net loss of US $790 million, equivalent to RMB 5.6 billion, and announced that it was about to lay off staff. Nike's new CEO took office in January this year. Unexpectedly, layoffs became his first fire.

Adidas, the first quarter profit fell 96% year-on-year, the board of directors issued an early warning that the performance of the second quarter may be more impacted, and the operating profit may even be negative. As long as 1.6 billion euro of self operated and self operated inventory of Adidas, it may take about 1.6 billion euro to digest the inventory of Swiss dealers.

Lululemon is also inevitably affected. The epidemic has cut off the double-digit growth momentum of its revenue and profit for several consecutive quarters. From March to may, its revenue fell 17% year-on-year to US $652 million. Although there was no loss, its net profit fell by more than 60 million US dollars.

But there is also good news. In the quarter ending May 3, lululemon's e-commerce sales increased by 70% year-on-year, contributing $352 million in revenue, making up for the loss in store sales. And the store's business is also recovering rapidly. The company's management disclosed at the financial report analysis meeting that the compound growth rate of sales in lululemon's stores in China has reached 20%.

This is also the basis for lululemon's rapid expansion.

From February to May this year, lululemon opened four new stores around the world, three in China. It has significantly accelerated its presence in China, where the total number of stores (including Hong Kong) has nearly doubled from 22 in February last year to 41.

Now, China has become the largest number of lululemon stores outside the United States and Canada.

According to the relevant person in charge of lululemon in China, through tmall's flagship store, its e-commerce penetration rate in China has reached 42%, "our online business is largely from cities that cannot be covered by these stores, which guarantees that we can still improve online rapidly within three to five years."

In April, lululemon made its first live broadcast on Taobao. Now it is broadcast every week, and plans to transform the third city of Shanghai Xintiandi store into a live studio. Lululemon also invested in tmall 618 a month ago at an unprecedented discount, with a turnover much higher than last year.

Lululemon is also in favor of capital markets.

Since March, lululemon's share price has risen steadily. By the end of July 21, American Eastern time, its market value has exceeded US $40 billion, further approaching Adidas (US $54.6 billion), a little far from Nike (US $153 billion), ranking third in the global sports brand.

Why is lululemon suddenly on fire

Compared with Nike and Adidas, lululemon is a little strange and minority to Chinese people. After all, it only made its debut as a display shop in 2014. It entered tmall in 2015 and opened China's first store in Sanlitun, Beijing in 2016. It has only been six years since it entered China.

However, lululemon's growth rate is very fast. In 2018, the growth rate of e-commerce in the Chinese market will reach 140%. In Q4 of fiscal year 2019 (the quarter to February 2, 2020), the growth rate of China's overall market will reach 70%, far higher than 19% of North America and 25% of the whole international market.

The article "lululemon sports pants addicts" describes that a yoga pants with a price of about 1000 yuan stands at the top of the disdain chain, making middle-class and celebrities flock to it. "Wearing this brand of Yoga suit is tantamount to telling the world:" I have time to exercise and look at my body. " Some even compare it to Hermes, "I'm going to wear lululemon on my back for life."

It is revealed that 80% of the consumers are from high education and high income in China.

In the eyes of straight men, lululemon is an incredible existence - what? Yoga pants can actually be put on the street, this is not a sexual harassment of men? what? It's 1000 yuan for one. Isn't it a robbery for a purse?

But lululemon girls will give you 100 reasons to choose lululemon.

"It's like not wearing pants!" This is how Jessie describes lululemon's classic nude series. When she was interviewed by lumon, she was wearing a series of amazing tights. Jessie said that because it was too comfortable, she would simply use them as autumn trousers in winter. In her wardrobe, there were more than 100 lululemon lying.

Jessie has a great figure. The waist is only 57cm, but the hip is protruding. Many tight pants will be empty at the back of the waist. Lululemon's tights are very fit. She specializes in yoga with a wide range of movements. The material of lululemon tights is malleable and quick to dry. She can exercise for a long time without binding and sticky sweat.

Lululemon girls will collect tights of different colors and styles, sports underwear, training clothes and even headbands, and fill the wardrobe with dozens of them. As long as lululemon is available in the mall, they will never go home empty handed.

With their own radar, they can identify the same species from the crowd at a glance. In Sanlitun, Beijing, where the tide people gather, lululemon is a sacred instrument for street photographing and swaggers through the market with honey peach hips wrapped in bee waist.

"Category killer"

In lululemon, the common price of a pair of tights is 850 yuan, which is about two or three times that of Nike and endma, and seven or eight times that of decathlon.

For Wilson, the price is three times as high as it is for a woman. "I know that after five years of owning lululemon, women will know that this is the best investment they have ever made."

Lululemon is born of yoga. It cuts into the sports market from a small incision to the extreme and becomes a "category killer".

Wilson Wilson, 42, fell in love with yoga at the age of 42 in 1998. But it wasn't long before he found out that there was no suitable yoga pants in the market. Yoga teacher recommended dance clothes have many shortcomings, such as the fabric is too thin, do stretching, transparent "like a light bulb.".

Chip Wilson is a sportsman. He is crazy about sportswear. "I'm keen to solve the problem of testicular compression when I'm cycling or sedentary, and I want to understand how different sizes of breasts affect the performance of different movements."

Wilson Qipu smell the market for yoga clothes. After several months of research and development, lumon launched a large number of yoga pants from customers

Unique material, avoid tight pants because of excessive extension and transparent;

Three dimensional tailoring, diamond lining is used to solve the problem of "Hump toe" (traces of women's private parts being pulled out when wearing tight pants);

The Japanese flat lock sewing machine is used for the external suture, which can pull the suture to the outside, avoid the abrasion caused by frequent movement, and highlight the hip leg curve of women at the same time.

Chip Wilson is proud of his work. In 2018, he published his autobiography, little black stretch pants, in honor of lululemon's first generation.

Chip Wilson was impeached by the board of directors a few years ago and quit the management because of his bad words. However, several "strange" rules he set up for the store have continued to this day.

So far, we have to provide customers with more than one store, which means that they can only see the effect of their own products in one store, that is to say, they should be able to buy more than one product in one store, that is to say, they should be able to buy more than six products in one store The education officer will have 13 seconds to introduce, otherwise, don't disturb customers.

It is these "rules" that make the customer experience in lululemon unique.

The store Ambassador doesn't make money

Lululemon harvests China's middle class. It does not rely on advertising and stars, but on community KOL and activities to subtly transform potential customers.

The first thing lululemon did in China was not to open a store, but to become a community. It recruited all kinds of sports and fitness KOLs in China to make them brand ambassadors of lululemon, including store ambassadors, regional ambassadors and global ambassadors.

Jessie first took part in lululemon's Yoga "immersion Tour" in Beijing's Mogan mountain in the summer of 2016. At that time, lululemon's shop in Sanlitun had not opened yet.

"Lululemon's events are not about selling goods, they're really about making you feel the sport." Jessie said that affected by the event, she was determined to quit her job in her hometown bank and devote herself to the creation of sports we media.

She has been one of the first store ambassadors since 2017. At least once a month, she participates in lululemon's community activities, taking people to sports.

Jessie told me that being a store ambassador for lululemon was definitely not about making money and there was no signing fee. Compared with material incentives, store ambassadors pay more attention to lululemon's international brand effect, communication platform for national and even global sports talent, and personal growth opportunities.

There are two specific tasks of store ambassador, community activities and product testing.

Store ambassadors will take their customers to participate in various sports activities, such as yoga and morning running, which are held every two weeks and are open to customers free of charge. In Hangzhou, every time the activities of lululemon's three stores are online, the appointment quota is almost empty, which is very popular.

"We hope that through these activities, everyone can know what the meaning of the product is. I need to push the product to you, because many products are functional. Why do they breathe well, why they don't stink, and how to do yoga won't let you go." In 2018, said Zhang Xiaoyan, marketing director of lululemon in China.

Another job is product testing. Lululemon requires each ambassador to test at least eight pieces of clothing, wear them for at least two weeks for work, travel and commuting; at least five washes, excluding machine wash in cold water, air drying or low-temperature drying; and size adjustment by a pattern expert.

Lululemon has opened up a "Asian tailoring" product line in China, with shorter pants and smaller waistlines, which has something to do with Chinese store ambassadors.

It can be found that lululemon selected the high growth middle waist KOL and patiently accompanied them to grow. This kind of marketing strategy is not instant, but it can be accumulated. Lululemon's growth curve in China is the best proof.

Lululemon has great expectations for China, but it is not without challenges.

First, compared with Nike and Adidas, lululemon's popularity in China is still limited. With more than 40 stores, lululemon is still a "niche" brand;

Second, lululemon's price is still too high for Chinese bodybuilders to accept;

Third, lululemon's women's clothing accounts for more than 70% of its total revenue, and its men's product line is weak and has yet to impress consumers.

But in any case, lululemon's growth story in China tells entrepreneurs how a brand can shape the irreplaceability of a product and make users irresistible.