Source: New Entropy (ID:baooliaohui) Author: Yu Songye Editor: Yuejian
In the Chinese market, lululemon needs to constantly find reasons for consumers to buy it.
lululemon seems to be in the middle of business anxiety.
The business for middle-class consumers has always been the most difficult to do. Unlike luxury goods that are strong with a deep brand background, and also from small and medium-sized brands that enjoy consumers at low prices, lululemon, which is mainly aimed at middle-class consumers, we need to constantly find reasons for consumers to buy it.
At first, lululemon became popular in the overseas market with its advantages such as high quality, large-size body friendly, and community construction. The yoga craze driven by the repeated epidemic and the rise of indoor sports has also accelerated the emergence of lululemon in the domestic market.
lululemon2022 fiscal year second quarter financial report shows that as of July 31, 2022, the company's revenue increased by 29% compared with the same period last year, to US$1.9 billion, and its net profit reached US$289 million. The mainland Chinese market has also ushered in rapid growth. In the second quarter, the net revenue of business increased by more than 30% year-on-year, with a three-year compound annual growth rate of nearly 70%. In addition, 8 new stores have been opened in mainland China, with a total of 70 stores, ranking second in the world. The importance of the Chinese market to lululemon is self-evident.
lululemon's popularity in China is actually a major impact on the domestic consumer market in the niche consumer field. But in the Chinese market, lululemon will inevitably encounter a market "black hole", that is, under the background of China's strong clothing industry belt, local brands will continue to imitate and try to surpass outsiders until they "screw out" the outsiders.
In the Chinese market where life and death are extremely cruel and cruel, lululemon has had to strengthen his storytelling ability. Recently, lululemon began to emphasize "elite", "happiness" and "good state". Whether it is European and American socialites wearing lululemon, or the master's degree who resigned and worked as a clerk in Lululemon, they have invisibly raised lululemon's "fashion" to a new level.
Consumers are always impulsive, but they will eventually return to rationality. No matter how gorgeous the lululemon's shell is, it is difficult to conceal the controversy of low cost performance, declining quality, and high domestic price compared to foreign countries.
It is not easy to maintain this glory through lululemon, which is targeted to export to the Chinese middle class and has rapidly risen in the Chinese market in a short period of time.
01 A lululemon quality tug-of-war
lululemon became popular in China at the beginning of this year. Due to its excellent quality and style, it was once praised by Chinese consumers on the altar. But in just a few months, there have been more and more doubts about lululemon recently.
In early June, a consumer complained on Xiaohongshu that he spent more than 3,000 yuan to buy two sets of lululemon yoga clothes, one of which was pilled after wearing them for two days. This post resonates with many consumers, complaining that it is of average quality, too high price, and low cost performance. It is better to choose a substitute (a affordable alternative to high-priced products).
A large number of consumers are noisy lululemon yoga pants pilling
In fact, regarding the quality of lululemon, a protracted tug-of-war has begun between middle-class women. Consumers who think that lululemon quality will compare the flat products they purchased and demonstrate from details such as wiring that lululemon has achieved the ultimate in the details, and will not feel cheap when worn.
. Consumers who think that lululemon are of poor quality listed various quality problems of lululemon, including yoga suit zipper not durable, yoga pants pilling, poor quality of underwear breast pads, and hair loss in sports vests.
Senior consumers with lululemon gave another insight. Canadian Chinese Li Xuan said: "The quality of lululemon is definitely declining. I still have a T-shirt from more than ten years ago, and I have not deformed it for many years. However, the new products I bought in recent years have a service life of as little as half a year and as much as two or three years."
. Regarding the reasons for the continuous decline in the quality of lululemon products, many domestic and foreign consumers believe that the brand has implemented the "planned scrapping", that is, it intends to shorten the service life of the product to improve the repurchase rate and sales.
According to incomplete statistics, lululemon has recalled products twice overseas. In China, lululemon affiliate Lululemon Trading (Shanghai) Co., Ltd. has been punished for product quality issues. Three times, the punishment reasons were " was adulterated and adulterated in product , using fake as real, inferior as good as good, or using unqualified products as qualified products."
lululemon was punished for unqualified sampling quality in March this year for
, which always hurt the nerves of middle-class consumers. The reason why they are willing to buy mid-to-high-end brand products is based on the "consumption security" . When mid-to-high-end brands cannot provide this sense of security, middle-class consumers will naturally turn to other brands.
, and what makes middle-class people even more unbearable is that lululemon has been tricked in the domestic market. On Black Cat Complaints , some consumers said that the lululemon products they purchased online are inconsistent with the fabric of the same product in offline stores. There are also many consumers complain that lululemon online flagship store price is higher than that of offline stores It is expensive, and it is suspected that the offline price of 950 yuan is labeled as 1,080 yuan and sold online.
In the black cat complaint, consumers complained about lululemon
In addition, more and more consumers have chosen to purchase agents. Many purchasing agents contacted by "New Entropy" said that in Canada, the price of lululemon is converted into RMB, which is only about half of the domestic price. Even with the commission on purchasing agents, the price of consumers is still hundreds of yuan cheaper than that of domestically, which undoubtedly has an impact on lululemon's domestic price system and brand positioning.
So, more and more middle-class people began to realize that lululemon's popularity is likely to be a precise marketing targeting the Chinese middle-class people. Liu Zhi, an overseas Chinese in Germany, said: "In Germany, you can hardly see this brand. Nike and Under Armour are the brands with high public recognition."
At present, it seems that lululemon is still limited in Europe and the United States, and the number of Instagram followers of first-line brands such as Nike and adidash are far more than lululemon.
On Instagram, the number of posts of the three major sports brands
As of 2021, lululemon's global market share was 1.3%, ranking 8th among the world's major sportswear brands. It has only risen by 11 years, with a slow growth rate, but at present, its market value has surpassed adidas and has become the second sports brand with market value in the world. It can be seen that lululemon's popularity in China has made its market value even more popular. But whether this fire is virtual fire needs to be proved by lululemon using time and strength.
02 The many difficulties in the business
lululemon rose in Europe and the United States, thanks to the growth of the consumption power of the middle-class women. in the country, lululemon has also attracted the attention of middle-class female consumers who love yoga. But the problem is that the main line of yoga pants will quickly lead to the growth of lululemon's market.
Take the Chinese market as an example. There are about 77 million middle-class women, and about 5% of the total population in China. Therefore, conservative estimates are that the number of middle-class women among yoga enthusiasts is about 4 million. If we consider the factor that women account for a higher proportion among yoga enthusiasts, the actual number will be more. But overall, the audience of lululemon yoga pants is still not large.
lululemon has also realized this dilemma, so in recent years, it has begun to explore new markets such as men's clothing, shoes, and personal care.
In 2015, lululemon tried the men's clothing category and began to transform to a comprehensive clothing brand through lululemon, which rose to "her economy". In 2018, among the sku, men's clothing accounted for 28%. lululemon men's clothing FY accounts for 24.55% in 2022, with revenue increasing by 61.13% year-on-year. The men's clothing market is expected to become the new growth curve of lululemon.
But at present, lululemon is still a brand with strong women's consumption colors, and its exploration in the men's clothing market has also reached the deep waters.
Posts under the tags related to lululemon are still mostly shared by female consumers, and are mainly yoga exercises. On YouTube, we also share lululemon-related content for female fitness bloggers. In contrast, it is difficult to find male consumers and male KOLs on social media. This is not because female consumers are more keen to share on social media. Among Nike and adidas related content, the proportion of content shared by male and female consumers is not much different.
Entering 2022, lululemon will focus on shoes. Lululemon released its first women's running shoes in March, and launched a multi-functional women's sneakers in July, followed by women's training shoes and slippers, etc.
Since this year, lululemon's overseas and Chinese official websites have highlighted the shoe category. In the official official official account of lululemon, there is even an independent entrance to the shoe category, but no independent entrance to the clothing category. It is not difficult to see that lululemon seems to regard the newly-started shoe category as an existence that can match the clothing business in the future.
lululemon attaches abnormal importance to shoe categories. The fundamental reason is that shoes can help lululemon open the male consumer market that cannot be captured for a long time.
Some clothing industry practitioners told "New Entropy": "Compared to men's clothing, men are more enthusiastic about shoes, and naturally they are more accepting of new brands." In addition, affected by the shoe speculation market, the profit margin of shoes is often greater. Although lululemon has only launched men's slippers at present, it plans to launch more men's shoe series in 2023.
Whether it is men's clothing or shoes, lululemon has maintained its consistent high-end positioning and high price. The high premium foundation of lululemon products is the extended service and social value of the brand. But the problem is that the faith kingdom established by lululemon has been loosened in the overseas market.
Yoga exercise itself is derived from religion. In brand building, lululemon is also accused of having a strong commercial religious color, that is, packaging brand culture into faith.
lululemon early brand packaging and some inspirational slogans in the store, such as "Life for yourself", etc., which resonated with middle-class women. In addition, lululemon has also carried out diversified offline activities in the female consumer circle. In addition to sports activities such as yoga, morning jogging, and cycling, there are also activities closely related to women's physical and mental health, such as women's workplace stress reduction and prevention of breast cancer and .
lululemon community activities carried out in China
Over time, many consumers have become loyal believers of lululemon in subtle way. The convergence and sense of circle identity of middle-class women in consumer choices have also become the logical basis for lululemon to sweep middle-class women.
But the problem is that lululemon's strategy is not very necessary for middle-class consumers with weak social needs and weak emotional needs. If we take away the social and emotional value that lululemon can provide, the shortcomings of lululemon products themselves are still difficult to ignore, and will even backfire on its claimed brand philosophy.
On the overseas review website Trustpilot, lululemon's rating is only 1.9 points (out of 5 points). European and American consumers’ complaints about lululemon are mainly focused on the poor purchasing experience, low cost performance, continuous decline in quality, and concerns about ESG (environmental, social and corporate governance). On
Trustpilot, lululemon's score is very low
, especially the controversy on ESG, is very concerned by European and American consumers. On September 17 this year, thousands of protesters took to the streets to protest lululemon. More than 1,500 protesters from more than 30 countries signed a statement that would force the lululemon factory to convert from traditional energy to clean energy by 2030. Environmental protection organization Stand.Earth pointed out that while lululemon has been catching money in recent years, greenhouse gas emissions have also risen all the way, with emission density 9% higher than in 2020.
protests about ESG have had a major impact on lululemon's belief business.The accusations of European and American consumers have revealed that lululemon's "faith business" is not invincible. In China, where yoga exercises are not as popular as those in Europe and the United States, business related to faith is undoubtedly more difficult to do.
03 The "black hole" of the Chinese market that is difficult to break free
For foreign brands, the Chinese market is a fertile ground with endless potential. But at the same time, there is also a huge "black hole" in the Chinese market, that is, the strong productivity and imitation power of the Chinese market can pose a threat to foreign brands.
Guangdong, Zhejiang, Fujian and other places in China have formed a huge sports clothing industry cluster, providing sufficient soil for the birth of domestic yoga brands. In the past, many of lululemon's products were produced by Chinese OEM factories. Although most of its products are produced by Southeast Asian countries, domestic factories have accumulated the ability to produce mid-to-high-end yoga pants.
On the consumer side, consumers are increasingly liking to find alternative yoga clothes, giving domestic brands room to grow. Chen Yu, a yoga enthusiast in
, said: "About two-thirds of the people in my yoga class, I buy yoga clothes from domestic yoga brands, many of which are lululemon's flat substitutes. Students will also communicate which flat substitutes are better. Many people buy one lululemon, but they will buy multiple flat substitutes." The relatively high price of
lululemon is indeed not enough to become the only choice for most yoga enthusiasts in China.
There are a large number of posts on Xiaohongshu with the keyword "lululemon" as the keyword, among which three forces are the most eye-catching: one is the products of domestic emerging yoga brands, the second is the products of domestic leading sports brands, and the third is the products of Alibaba yoga clothing OEM factory or small brands.
Recommended posts for hot yoga clothing on Xiaohongshu
Among the emerging domestic yoga brands, MAIA ACTIVE, PARTICLE FEVER, NEIWAI ACTIVE and other brands have strong development momentum and are all highly popular. This type of brand often takes the mid-to-high-end route, and also has good R&D, design and marketing capabilities. The price is generally above 300 yuan, and the quality can also meet the needs of middle-class women.
It is worth noting that this type of brand is also actively building communities, all of which use first-tier cities as their bases to launch various offline activities, pay attention to women's issues, emphasize emotional connections, which is similar to lululemon's strategy.
From left to right, the community activities of MAIA ACTIVE, PARTICLE FEVER, and NEIWAI ACTIVE are visible. Building a community is the focus of domestic yoga brands moving towards high-end and top-level development. However, building a community requires a lot of manpower and material resources, which invisibly raises the brand's operating cost and passes it on to the commodity price. However, the average price of more than 300 yuan is still strongly competitive compared to the average price of more than 800 yuan.
Riding on the hot wave of lululemon, the yoga clothing of domestic leading sports brands has also begun to be paid attention to by consumers. Anta , Rapdled Loli and other brands have an average price of more than 100 or more 200 yoga pants, which has achieved a good balance in terms of price and quality, and has a high popularity.
As for Alibaba yoga clothing OEM or small brands, the design lacks originality and directly copying the lululemon style is naturally not as good as the top brands in terms of quality, but the price is generally less than 100 yuan, which is enough to penetrate the sinking market.
The above three categories of products cover high, medium and low ends, and penetrate the domestic market in all aspects. The attack from three domestic forces makes it difficult for Lululemon's yoga clothing business to continue to expand its territory in the Chinese market. For example, MAIA ACTIVE, its official flagship store’s hot yoga pants sold 2,000+ per month, which is the same as lululemon. The monthly sales of affordable yoga pants sold on e-commerce platforms range from 10,000 to 100,000 yuan.
lululemon and domestic brands of hot products are no longer comparable to those of
More importantly, even the community construction that makes lululemon proud is also restricted by local factors in China.
Some clothing industry practitioners told "New Entropy": "When I was studying in the United States a few years ago, I already felt that yoga clothes have become more and more common in the United States. Many people will walk and run outdoors in yoga clothes. On the other hand, in recent years, the wave of body anxiety in Europe and the United States has become increasingly popular, so even many people with plump figures dare to wear yoga clothes to go out. But in China, it is still far from this level. Therefore, the development of the domestic yoga clothing market still requires strong brand promotion."
There has not yet been a large environment for wearing yoga clothes in high frequency and multi-scene scenes in China, and it is difficult for lululemon to promote the community activities like abroad. For example, in North America, lululemon users can see scenes of collective yoga and meditation on the grass in many parks, and many passers-by will stop and watch, and then get to know the brand of lululemon and understand its brand spirit.
However, in China, lululemon's yoga activities are currently held indoors, and the intensity of community activities radiating outward has been greatly weakened. "Lululemon used to have many outdoor yoga activities in China, but now there are fewer ones. The epidemic may be a factor that domestic users are unwilling to do yoga outdoors, which is also a key factor." A consumer who has participated in the offline event of lululemon said.
Currently, lululemon's outdoor activities are mostly running, cycling and other activities. Given that many cities have sports groups such as running, cycling and other sports groups, the brand promotion of lululemon in the activities will also be greatly reduced.
Given that lululemon is surrounded by domestic brands and is restricted in domestic community construction, lululemon is difficult to gain old capital in its existing business model. In terms of deepening the middle-class market and strengthening the consensus on middle-class consumption, it requires continuous localization and refined operations.
China's yoga clothing market has just ushered in spring, and lululemon, which was the first to cultivate this fertile land, did not lead too many opponents.
(Li Xuan, Liu Zhi and Chen Yu are all pseudonyms in the article)
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