"China's Identity Quest Lifts Lululemon, Premium Sportswear"

In China, a growing emphasis on self-expression and identity fuels a surge in demand for premium sportswear brands like Lululemon. This trend reflects a broader cultural shift as individuals seek to assert their unique identities and lifestyles, driving sales and popularity for high-quality activewear. Lululemon, in particular, benefits from this trend, positioning itself as a sought-after choice among Chinese consumers embracing fitness and fashion as integral parts of their personal narratives.

Boston Brand Media brings you the latest news - Premium athletic apparel brands are experiencing significant expansion within China as they actively engage with their primary clientele, presenting another challenge to industry giants Nike and Adidas as they contend with domestic rivals in the $55 billion sportswear sector. In China's slow-moving consumer market, sportswear stands out as a beacon of growth, driven by a shift towards health and well-being among upwardly mobile middle-class consumers following the pandemic. Many are embracing activities like yoga, hiking, and running for the first time.

According to Euromonitor data, the market, which ranks as the world's largest after the United States, is projected to expand by 7% this year, reaching $59 billion. This growth rate outpaces the forecasted 0.8% growth in non-sportswear apparel and footwear sectors.

While this development is promising for market frontrunners like Nike, Adidas, Anta, and Li Ning, it's particularly advantageous for higher-end brands such as Lululemon and specialized sneaker manufacturers like On and Hoka. These brands have found success by prioritizing social media influencers and community-focused marketing strategies over the celebrity-driven campaigns typically favored by larger brands.

Ning Zheng, a 33-year-old fitness model with a substantial following on Xiaohongshu, a platform similar to Instagram, noted that many Chinese women are novices to sports and may feel somewhat intimidated. Zheng, who has collaborated with most international sports brands in China to some extent, highlighted that if women see others in their yoga or running communities, or influencers they connect with online, wearing a particular brand, they are more likely to perceive it as suitable for themselves as well.

Boston Brand Media also found that, as relative newcomers to the market, On and Hoka are experiencing growth rates that surpass those of their more established competitors. However, as they continue to capture a larger share of the market, the portion available for other players diminishes. Although On does not provide specific figures for China, its sales growth in the Asia Pacific region surged by 69% in the first quarter, constituting over 10% of its global revenue for the first time. The company's co-CEO stated during a recent earnings call that they anticipate China alone will contribute 10% of the total revenue in the near future.

In contrast, Nike experienced a 4.5% sales increase in the Greater China market during its most recent quarter, albeit from a considerably larger starting point compared to its smaller competitors. In the 2023 fiscal year, Nike reported sales of approximately $7 billion in footwear and apparel across Greater China. Adidas, on the other hand, achieved an 8% growth in its China business in the first quarter. HSBC consumer analyst Lina Yan remarked, "As the market matures, growth will increasingly favor niche categories and niche brands."

In comparison to other premium brands, Lululemon boasts a decade-long presence in China, positioning itself as a seasoned player in the market. Initially adopting a cautious approach to expansion, it celebrated its 10th anniversary last year by opening its 100th store. However, it has since accelerated its growth strategy, aiming to reach 220 stores by 2026. Relying predominantly on targeted marketing, the Canadian yoga wear manufacturer reported an impressive 45% growth in China during the first quarter, making it the company's second-largest market globally. This growth offset sluggish demand in the United States, where sales only grew by 2%. Lululemon's net sales in China nearly reached $1 billion last year.

'SOUL SEARCHING'

Analysts suggest that Chinese consumers, particularly millennials and Gen Z, are increasingly embracing the global health and fitness trend, using sports as a means of self-discovery. Aspirational brands like Amer Sports' outdoor wear label Arc'teryx and Lululemon, often dubbed the "Hermes of yoga" by Chinese consumers, are reaping the benefits. Many newcomers to sports see these brands as the most suitable for their chosen activity. Yaling Jiang, founder of research and strategy consultancy ApertureChina, notes that young Chinese are using consumption and hobbies, such as frisbee, cycling, or yoga, to shape their identities. This trend leads them to invest in premium brands that resonate with their sense of self. Vuori, a premium yoga brand, recently launched its first store in Shanghai, while Authentic Brands Group, which opened a Reebok flagship in Shanghai, aims to expand brands specializing in niche sports like surfing, hiking, and snow sports in China. Josh Perlman, Executive Vice President for Lifestyle at Authentic Brands Group, expresses confidence in the growth potential of these brands in the Chinese market.

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Source: Reuters‍