Lululemon makes China prime target in global expansion
Participants practice yoga under the guide of an instructor at an event organized by Lululemon and Keep in Beijing, June 21, 2019.
Athletic apparel retailer Lululemon said on Wednesday it is looking to quadruple its international business by 2026 through a three-pronged approach, in which China is the "primary and biggest opportunity".
The growth of the Chinese mainland will be powered by five pillars to showcase how the company's global-local model plays, Andre Maestrini, executive vice-president of Lululemon's international business, said at an investors' day that charted the course for the company's strategy over the next five years.
Calling the Chinese mainland "the first source of growth" for international business, Maestrini said the company is looking to triple stores to 220 in 2026 from the current 71.
This would feature a combination of flagship stores with full lineups and community-based stores featuring core products. The strategy would unfold by building up presence across relatively affluent first-tier cities like Beijing and Shanghai before penetrating into tier-two cities.
E-commerce is also a focus, with Lululemon on track to partner with local e-commerce giant JD on top of its existing Tmall store, further tap into social commerce through WeChat mini programs and develop its indigenous Chinese website.
It will also launch products tailored to the Asian market and create local collection capsules to resonate with local occasions. Other endeavors include drumming up brand amplification and running a sustainable business.
"It's about telling our stories louder in the market and complement brand awareness by curating local content that resonates with a guest," he said.
International business represented around 15 percent of Lululemon's $6.25 billion revenue by Jan 30. The ambitious target will also be buoyed by growing markets like South Korea and Australia, further scaling existing markets and entering new markets, such as opening a flagship store on Paris' Champs-Elysees.
At the same event, CEO Calvin McDonald announced a plan to double the company's 2021 revenue in the next five years, putting it on track to hit $12.5 billion in sales by 2026.
Apart from quadrupling international revenue, the company aspires to double both its men's revenue and digital sales to achieve that goal.