Canadian activewear label Lululemon’s Q2 earning results beat Wall Street’s estimates with a “strong” sales spike in China by 61% to 277 million USD, according to the brand’s CEO Calvin McDonald on the earnings call on 31 August.
This is a doubled growth rate compared to the 30% growth in the region in the same quarter last year and makes China, which is already the third-largest market for Lululemon, also the brand’s fastest-growing global marketplace.
Attributing the momentum to an “incredibly well-performed” e-commerce and in-store sales, the CEO also revealed that Lululemon now has a total of 107 physical stores installed across the country. Of the 35 new openings the brand plans to introduce internationally in the current fiscal year, the majority will be located in the region.
“In terms of China, over the longer term, we’ve set approximately 200 stores at the end of our five-year plan,” said Meghan Frank, Chief Financial Officer at Lululemon. Highlighting the Power of Three x2 road map, which is the brand’s five-year growth plan, Frank added China would be “a key focus” of Lululemon’s global market expansion, with efforts in improving guest experience and omni capabilities being at the forefront in achieving the goal.
Noticeably, 2023 also marks the tenth anniversary of Lululemon’s entry into the Chinese market. During the first nine years, the brand primarily followed a ‘slow and steady’ development pace, opening only three stores in the first three years. However, since 2022, Lululemon appears to have ramped up the expansion of its footprint, adding 39 new stores, with an average of one new store opening every 15 days.
The past decade was regarded as a period that saw the rise of women’s fitness in China. With a target audience of middle-to-high-income young and middle-aged female urbanists, the “golden decade” is also believed to have contributed to Lululemon’s smooth sailing in the region.
However, in vain of seeking further growth, the brand has shown attempts in increasing its appeal to the country’s male consumers. Such an endeavour is expected to be fuelled by the arrival of Vuori, a California-based athletic clothing brand, which is dubbed the “men’s version of Lululemon” in China. The new player launched its first pop-up event in Asia at Jiali Centre in Shanghai’s Jing’an district, which also houses Lululemon’s largest flagship store in Asia Pacific that opened in March. The landing is believed to spice up the competition of impressing China’s male fitness enthusiasts.