BEIJING — Lululemon Athletica Inc.’s new general manager for Asia said this year and next will lay the groundwork for the yogawear company’s global expansion plans as the brand tries to tap into China’s growing interest in the sector.
Hong Kong-based Ken Lee, taking on a brand-new role at the company, will spearhead Lululemon’s Asian expansion push. The brand already has seven “showrooms” in Asia — four in Hong Kong, two in Singapore and one in Shanghai — where staff interact with customers, stage events and sell a limited range of the brand’s merchandise, including apparel and mats. Lee said the response has been so strong that the brand is looking to open its first full-fledged store in Asia, either in Hong Kong or Singapore, possibly as soon as the end of this year. The company is also working on rolling out a Chinese-language Web site by mid-2015. After the Chinese site’s launch, Lee hopes to set up a shop in Alibaba’s Tmall.
“International expansion is relatively new to our company. We’re reinventing ourselves to be a truly global company,” Lee said of the Canadian company’s four-year international strategy. “We [have] 300 stores in North America and [the] only store we have outside North America is London.”
Lee said there are feasibility studies under way for Japan and South Korea but the company’s focus is setting up shop in China. He declined to give sales figures, but said that Lululemon’s China sales have the potential to double those of the brand in America, adding that the profile of the company’s typical customer in China is a professional woman aged 25 to 40.
Lee, who joined Lululemon in February after past stints at Fossil, Coach and Adidas, said the yogawear brand will open a second showroom in Shanghai inside the Shanghai Centre on West Nanjing Road this month. The company is preparing to launch a showroom in Beijing sometime next year as well.
“Sales are not the main goal [of the showroom], it’s just to test the waters for our product, our culture,” said the executive, a triathlete himself.
“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.”
Lee said Asian customers are responding to the showrooms and their staff. The company invited 100 people to an event earlier this year at the ION Orchard Road mall in Singapore and 1,000 people showed up, he recalled.
The showrooms offer a limited selection of items including T-shirts, tank tops, shorts and yoga pants, and the lack of a full assortment has caused some disappointment to customers who visit the showrooms, Lee admitted. However, customers can order the full collection online from the brand’s U.S. or Hong Kong Web sites.
Unofficial estimates suggest 10 million people are practicing yoga in China, according to Matthew Crabbe of Mintel Group Ltd., a global market research company.
Yan said China’s yoga industry is growing three times faster than the U.S. and she is optimistic that foreign labels such as Lululemon will do well if their marketing is done right.
“Before, I feel the yoga clothes [offered in China] were too much like fitness club, there was no difference. But now, since two years, they’ve gotten really beautiful,” Yan said, explaining when she first started her studio a decade ago, practitioners would often wear gym clothes or traditional Chinese garments for Tai Chi.
“Members who are 40 years old, they don’t care about [fashion], they just want to be comfortable, but those who are 26 to 35, they’re very fashionable,” said Yan.
Lululemon faces plenty of competition in China from both international giants like Nike and Adidas and local Chinese sports brands. Chinese athletic brand Hosa considers itself one of the leading yogawear players in China. Chinese sportswear giant Li Ning, named after its founder, a former Olympic gymnast, launched a yoga line in 2009 and teamed with designer Vivienne Tam to create a one-off spring 2012 yoga collection. Pure, one of Hong Kong’s largest and oldest yoga studios, opened a branch in Shanghai in October, bringing its recently launched yoga line to Mainland China. Meanwhile, Taiwanese brand Easyoga moved into the Mainland Chinese market in 2008.
But Lee said he believes the Lululemon product, which mixes premium fabrics, beautiful designs and function, will stand out among the giants. He said the company is considering tailoring products to Asian tastes in terms of colorful fabrics and fashion-forward designs. He added that the company has ramped up quality-control inspections and measures to cater to particularly discriminating Asian consumers.
On the quality note, Lululemon has faced a tumultuous time, most notably with the recall of a range of see-through yoga pants that caused its stock price to plummet, a switch in its top executives and damaged the reputation of its founder, Chip Wilson.
Lee said the company is dealing with its past mistakes but is hopeful that the new team, installed in November, which includes chief executive officer Laurent Potdevin, chief product officer Tara Poseley and himself, will be able to steer the ship forward.
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