With diversified products, Lululemon reaps juicy awards

Lululemon Athletica Inc, a Canadian maker of sports leggings and tops, is on track to quadruple its international business by 2023 if not sooner, with China serving as a "key market with good growth", company executives said.

Robust momentum is particularly seen in men's clothing, a category which it is on course to double its sales between 2018 and 2023.

The remarks of the executives came as the athletic apparel company reported stronger-than-expected profits and revenue for the fiscal second quarter ending on July 31, when international business surged 49 percent year-on-year.

"China in particular is a market where we have leaned in on an investment," CEO Calvin McDonald said in an analyst call last month. "We've opened a head office in Shanghai. We are leaning in and hiring and supporting local teams within that market and in our store expansion as well as our digital innovation in support."

As of Monday, Lululemon had 59 stores in the Chinese mainland. The company is rosy about the bountiful opportunities of Chinese business, said Chief Financial Officer Meghan Frank.

"We are particularly pleased with the growth rate we're experiencing in China and see opportunity for both revenue and gross margin expansion and operating margin expense," Frank said in the call. Lululemon did not provide a breakdown of China's share in its $4.4 billion business by fiscal year 2020.

COVID-19 is pushing up demand for "athleisure"－a portmanteau of athletics and leisure wear that can be worn both during workouts and while simply relaxing and lounging around. A research report by McKinsey earlier this year called it "the new default and a competitive battleground" in the consumption realm.

"Athleisure was a megatrend before COVID-19, but the pandemic has served to further blur the lines between work and free time, and there is a rising acceptance of comfortable wear in previously more formal contexts," said McKinsey consultant Sabine Becker.

As such, Lululemon has started incorporating multiple sporting needs such as Yoga, running and training into the design journey, while balancing functionality and fashion at the same time, said San Yan Ng, senior vice-president of Lululemon China.

To ride the booming demand for men's apparel, the company has rolled out pants using a new fabric called Utilitech that suits multiple occasions. This summer, it also sold apparel with limited-edition patterns dedicated to China's Valentine's Day.

To up the ante in China, Lululemon is also employing a community-based marketing approach to build brand awareness and enhance customer loyalty. A multi-faceted strategy includes leveraging local teams, store ambassadors, digital marketing and social media, and in-store community boards aim to get shoppers glued to its portfolio of product launches and activities.

"It's a unique, community-based operation model that we are advocating to allow Chinese guests to support each other and lead a positive, healthy lifestyle," Ng said.

In its latest endeavor, Lululemon is unveiling what it claims to be the largest, fully integrated global ad campaign titled "Feel".

The China version of the campaign is working with celebrity ambassadors such as actress Celina Jade and former NBA and Chinese Basketball Association star Stephon Marbury.

In October, the company introduced omnichannel sessions of training, health-related tip-sharing and interviews. Some are livestreamed via mobile portals to foster greater well-being across physical, mental and social dimensions.

"As a sports lifestyle brand, we hope to start a dialogue with target audiences of different generations and dual genders … leveraging a rich array of social media and community activities to boost our recognition and reputation here," Ng said.

A ranking of global brands by advertisement and public relations agency WPP and consultancy Kantar last year showed Lululemon was one of the fastest risers in performance, having shifted its focus from yoga-inspired athleisure to work-appropriate clothing, as well as offering online classes for people at home.