Canadian yogawear company Lululemon Athletica Inc. is taking its first steps toward global expansion into the potentially lucrative Chinese market.
Last February, the company appointed Hong Kong-based Ken Lee as its general manager for Asia, and already maintains seven “showrooms” on the continent. These are spaces that sell a limited selection of Lululemon merchandise, including tank tops, shorts, yoga pants, and T-shirts, and allow customers to interact with staff.
“Sales are not the main goal [of the showroom], it’s just to test the waters for our product, our culture,” Lee explained in an interview with Women’s Wear Daily.
Though some customers have complained about the small range of merchandise available, Lululemon’s full collection is available for purchase online from the company’s Hong Kong or US websites. Overall, the showrooms have proved to be a success in China, with four in Hong Kong and one in Shanghai. A second showroom will open in Shanghai inside the Shanghai Centre on West Nanjing Road later this month, and one will also open in Beijing sometime next year.
According to Matthew Crabbe, an analyst with global market research company Mintel Group Ltd., there are an estimated 10 million people in China who practice yoga, and the discipline has had a recent spike in popularity in the country.
“[Yoga] has come back more recently in China [and] I think that’s partly because a lot of consumers are looking for healthier lifestyles. The whole bourgeois, bohemian, you know, the bobo concept, and people trying to tune out of the rat race, that sort of thing,” Crabbe says.
Lee similarly notes that middle-class Chinese are looking to yoga as a means of achieving spiritual balance in their lives, and that the typical customer profile for his company is a professional woman between the ages of 25 and 40.
Lululemon is also preparing to expand well beyond the limits of its showrooms in the near future. Customer reception of the company has been so positive that the brand’s first “full-fledged” Asian store may open as soon as the end of this year, either in Singapore or Hong Kong. By the middle of 2015, the company hopes to have its first Chinese-language website up and running. Lee also hopes to further expand e-commerce opportunities by creating a shop for the company in Alibaba’s Tmall.
Although Lululemon faces considerable market competition, both with global companies like Adidas and Nike and local Chinese brands like Li Ning and Hosa, Lee believes that the high quality and functionality of his company’s product will make it popular among even the more discriminating consumers. Taking a non-arrogant approach and conducting expansion efforts slowly but steadily are key to success, he says.
“This company is not a superaggressive company, trying to open 2,000 stores in two years. We want to make sure that we do something right, do something right for the community.”
image credit: lululemon