China is a daunting but critical market for international brands. A key driver of global luxury goods sales, a Bain &Co. analysis predicts Chinese shoppers will account for 40% of all luxury consumers globally by 2030. Cracking, sticking and expanding into the country’s stuffed and saturated marketplace comes with its own set of challenges that even the biggest brands struggle to overcome.
Google was locked in an awkward tango in the Chinese mainland for over four years before being outpaced by Baidu and abruptly shutting down in 2010. Uber lasted less than two years, eBay retreated in four as well.
Despite the challenges and the long list of its predecessors’ death toll acting as a bugbear, Canada-based high-end athleisure brand, Lululemon has cracked the China code to identify the right brand positioning that resonates with the local consumer and has managed to ace the sophisticated omnichannel landscape to reach them.
Business success speaks for itself. The brand ended 2022 with net revenue at US $8.1 billion—posting a 30% increase from 2021. In Q4, its revenue in mainland China increased more than 30% versus last year. That’s not all, if current growth trajectory continues, China will be the brand’s second-largest market worldwide by 2026 marking a larger retail footprint, expanding product portfolio and enhanced omnichannel community engagement.
Celebrating its milestone 10th year in mainland China and the opening of its 100th brick-and-mortar store in the country, Lululemon is going all out with the “Worn By Us” campaign with 10 diverse ambassadors to tell the brand story behind the much-loved products.
For the digital campaign, prominent names like athletes like British boxer Michele Aboro, Shanghai-based triathlete Peter Wolkowicz and F1 driver Zhou Guanyu — as well as celebrities such as American singer Amber Liu, Hong Kong actress Celina Jade, and mainland actress Cici Wang will make an appearance, followed by a book launch and a host of community events to further the engagement with consumers.
“We had a humble beginning in China, we started with one showroom in Shanghai that only opened three days a week,” recalls Lynn Cheah, Lululemon’s VP of brand marketing and community in China, who recently made her debut in Campaign’s 2023 Power List. Without big marketing dollars or an aggressive marketing strategy, it was an uphill task to win popularity in one of the hardest-to-crack markets in the world.
Cheah explains the noticeable differences in the various demographics of Chinese provinces, the populations, the change in tastes and preferences, earnings and infrastructure access that was key to a brand’s success rate in the country. The winning formula ultimately boiled down to the messaging that is used, the influencers that are roped in and how the community is engaged.
Today, Lululemon’s popularity on Red largely comes from content creators who genuinely love the products and share their recommendations through #OOTD posts (#今天穿lululemon) that have garnered over 94 million views.
Cutting-edge lifestyle has become an essential part of the Chinese consumer and that paves the way for niche brands to survive. Lululemon’s success mantra is also down to the strategy of directly owning and controlling its brick-and-mortar throughout the world. Without a franchise in the middle, the strategy helps in controlling a niche positioning and preventing any dilution of brand experience at the stores.
Ahead of the rolling 10th-anniversary celebrations, Campaign sat down with Cheah to understand the brand’s growth strategies and road ahead to thrive in a rapidly evolving environment.
Campaign: Chinese mainland has reached its 100-store milestone recently and will continue to open new stores this year. China has become the third most important market after US and Canada. What's your 2023 marketing plan?
Lynn Cheah: I always say that we are just beginning. 100 stores, that's a great milestone, but not a big number compared to others. I will say that whatever future campaigns are, we will always have the element of the community in it. I think that's really what is unique to us, and we hope that we can continue to foster that kind of relationship and trust between the people that work together with us and guests who will live the sweaty life in our community with us.
Over the next ten years, I can only say we will continue to celebrate products in a big way. We will continue to celebrate people, our people, in a big way. We will continue to advocate for this lifestyle of being well, we think that's our role to play. We are not about competition and achieving your personal best. We just want people to move with us, come and hang out in our community and take time for themselves. Those are basically the three messages.
I will add one more thing, which is I think a lot of women know us really well. We also have a lot of men who are in love with us and who are very loyal to us. But there are fewer men compared to women. So one of the trajectories looking forward is how can we attract our male guests to be part of our community and play a more significant role in our story. We've got some great products like the ABC pants, which are a favourite amongst men who know it, but there are still a lot of men who have yet to discover it. That's the time to come. I'm sure I'm looking forward to more product development from the product team.
Tell us about the story and creative thought process that went behind the 10th-anniversary campaign.
The idea was to celebrate all the people who joined us a decade back and continue to support us even today. In all of our sweat activities, our initiatives, our stores, the educators and the ambassadors that have been with us have unique stories and motivations to share and we wanted to highlight those.
People say that before trying on our Align pants, they weren’t into yoga, but now they can even convince their mums to do yoga. It’s these stories that we don't talk about too often. We just wanted to celebrate all these stories that guests are spontaneously sharing with us.
Red is now a social media channel where Lululemon goes viral for “grass planting” and sharing. What's the most important social media channel for Lululemon today?
I think all the channels play their roles in the brand conversation. But there are different types of stories depending on who is on those platforms, where your guests are, and what they are posting. I think we all agree that social media is impactful when there are authentic stories. When you read the social posts on WeChat, all the comments that we have at the bottom of the [Worn by Us] campaign posts – the reason why you enjoy reading them is because they are authentic feedback. It’s not like a brand trying to say all the things, but people get to engage with the brand.
And like all engagement, you hope that most of the time you've done a good job, you've intentionally gone out and done things the right way. I guess it's like all relationships. Different channels are there for different purposes, and people expect different things from different channels too. You just need to meet them on those channels with the kind of content that they are expecting.
Lululemon gets millions of comments. Do you read these consumer posts? And do they serve as inspiration for let's say, the next product launch?
I think you get inspiration everywhere every day. Whenever I'm stuck on a campaign idea, the first thing that I usually do is, go to one of our stores. That's an inspiring reminder of what my job is. As a marketer, my advice to the team is always that the actual battle is won and lost on the store floor when the educator is interacting with the guest. Because that's eventually where the magic actually happens. If you set up everything right and it's all wired together; like the visuals are great, the store is well presented, when people walk in, you've hired the right team, the educators have been well informed, they are engaged, and they love working here, then the interaction is the one that is driving the love for the brand.
When I interact with the educator in our stores, it's really that last mile of interaction that I fall in love with. It's not the billboard or the product that comes first, but actually the educator and interaction in the store that attracts me. And then, when I take the product home, I try it on for my yoga class, that's when I go 'wow'.
That's the journey. You need to have enough people happy people at every touchpoint to create that brand magic.
You joined Lululemon over two years ago, tell us which marketing campaigns stand out for you.
I have three kids. This is like when people ask me who’s your favourite child? Every single campaign is like my own child. First, I have to think about it, and then carry it, birth it and feed it before it can be independent. So, I feel like it's hard for me to choose.
But I guess the campaigns that come to mind, like the most recent one that we feel particularly proud of, is the one that we did in October last year for World Mental Health Day. The projection that we did on the Shanghai Broadway Mansion. The campaign was a labour of love. In order to deliver this baby, it was really hard on many dimensions.
First, it’s because it's a campaign that doesn't really talk about products. It's basically saying looking after your own mental health and your own well-being is important, especially now in this context. And so, what can we do? We are an athletic apparel brand. We're not medical professionals. But we came together as a community and as a collective to advise on three things can help. So, physical health comes first. It is the sweat life. We're saying, get into movement, live a life of movement, get out into nature, do exercises, etc.
Then, we say, doing it with people to have the social connection to not be in isolation, to reach out and go hang out with others, also makes you feel better.
Then the third thing, maybe it's the most abstract and most ambiguous, mental health. For us, it's really about giving space to yourself. And to actually spend some time slowing down and having space to decompress and live in the moment. The mental health piece, what we are trying to advocate for, is this idea of quieting the mind, creating the space and letting yourself be away from all of the demands that we have with modern life.
So, as a brand, we had to think of a way of how we deliver this message in a way that is authentic, and not too complex or complicated to understand.
Lululemon accelerated the 'Power of Three x2' formula last year. Now out of your three strategic pillars of product innovation, guest experience, and market expansion, what will be the most significant in China this year? And how are your upgrading guest experience in the post-pandemic world?
We need to work on all these three pillars hand-in-hand for us to achieve the growth and ambition that we envision in China.
This month, we launched the 'Blissfeel Trail', which is the first trail shoe for women from Lululemon. I'm really excited for people to try these shoes and be in nature because that's also one of the findings from last year's well-being report that being in nature actually contributes to your overall sense of feeling good.
And then I think in fall, I'm excited about the launch that we will do for the ABC pants, which is not a new launch, but we're making style updates here.
We feel like the ABC pants are still relatively unknown to many male consumers. It is a family of styles, not just one pant. Our challenge will be how do we communicate this aspect and get more men to try and experience these pants for themselves.
Of course, we will be doing an activation around World Mental Health Day again in 2023. I hope that more people can join us in this movement and participate in person. Our Chinese New Year rollout will also be special.
Are you doubling down on more offline events now that physical events are no longer a restriction?
We are starting the recruitment or registration for Summer Sweat Games. This is our third year doing Summer Sweat Games. Last year again, we did Summer Sweat Games during Covid but this year, we're hoping to get more people to sign up. Interestingly, it's going to be more like a group sport this time.
There's nothing like being in person to experience the connection of sweating it out and experiencing the joy in movement. And the movement doesn't have to be perfect. It just needs to start.
(The interview has been edited for brevity and clarity.)