'Yoga Apparel Chanel' Lululemon, Why It Sells Well Despite High Prices [Hidden Industry Story]

'Fitness Enthusiast' Dennis Chip Wilson, Founder of Yoga Apparel Brand 'Lululemon'
Marketing Strategy Targeting '32-Year-Old Professional Women'
Beneficiary of COVID-19...Sales Increase

Photo by Lululemon website screen capture.

[Asia Economy Reporter Heo Midam] The 'athleisure look,' which breaks down the boundaries between sportswear and everyday wear, remains popular this year as well. Athleisure is a portmanteau of 'athletic' and 'leisure,' referring to clothing styles that are comfortable and functional like sportswear but not awkward as everyday wear. With growing interest in activities such as yoga, Pilates, jogging, and various leisure pursuits, comfortable and practical athleisure wear has gained the spotlight.

Among these, one company often cited as the pioneer of athleisure is drawing attention. That company is the Canadian yoga apparel brand 'Lululemon.' Lululemon's women's yoga pants are priced over 100,000 won per pair, making them more expensive than other brands, but they have a solid fan base thanks to high-quality materials and diverse designs. It is also known that British royal Kate Middleton frequently uses Lululemon products. What is the secret behind Lululemon, often called the 'Chanel of yoga wear,' gaining such popularity?

◆ Yoga Wear Development Started from the Awareness of "Existing Yoga Wear is Uncomfortable"

Lululemon was founded in 1998 by Canadian entrepreneur Dennis Chip Wilson. An enthusiast of skateboarding and snowboarding, Wilson began selling functional sportswear in 1979 and managed the company for 18 years. One day, after attending a yoga class, he felt discomfort with the existing yoga wear. At that time, most yoga clothes were made of cotton, which quickly became soaked with sweat and lacked breathability. Additionally, the tight fit of yoga wear restricted movement during yoga poses.

Wilson then thought about making yoga pants using the same material as the surfing wetsuits he was selling. He began creating various yoga wear that was comfortable to move in and flattering to the body shape. Judging that there was sufficient demand for such clothing, he sold his previous company and established Lululemon.

Early appearance of Lululemon. Photo by Lululemon website capture.

After completing yoga wear that shaped women's bodies, he allowed customers to try them on in stores. Consumers, greatly satisfied with the stylish design and functionality, shared their experiences on social networking services (SNS), spreading word of mouth.

Wilson also actively marketed through fitness communities he frequented, raising brand awareness. As a result, Lululemon recorded sales of $350 million (approximately 391.2 billion won) in 2008, just 10 years after its founding.

Notably, Lululemon went public on the US and Canadian stock exchanges in 2007, and its stock price soared, propelling Wilson into the ranks of billionaires.

However, in 2013, Wilson caused controversy by stating that "Lululemon's yoga pants are not suitable for overweight women," leading to his resignation as CEO. He has since been reduced to a shareholder holding a 9% stake.

◆ Why Lululemon Targeted '32-Year-Old Professional Women'

Lululemon was known for its precise targeting in the early stages of its business. The brand focused on '32-year-old professional women who own condo memberships and enjoy exercise and travel.' Both new product development and marketing strategies were centered on this demographic.

Wilson believed that these women had sufficient financial means to spend more on their fashion and satisfaction. Ultimately, this strategy succeeded, and Lululemon earned the reputation of being the 'Chanel of yoga wear' among female consumers.

However, after Wilson stepped down from management, this strategy was no longer used. Lululemon now offers yoga wear not only for 32-year-old professional women but also for men, and handles a variety of product lines including bags and hats beyond yoga wear.

Despite its not-so-affordable prices, consumers choose Lululemon for its excellent quality. Prioritizing functionality, Lululemon developed proprietary fabrics such as 'Luon,' which has excellent sweat absorption and elasticity, and 'Silverescent,' a silver fiber with secretion sterilization and antibacterial effects.

Lululemon store in California, USA. [Image source=AP Yonhap News]

◆ Lululemon, a Beneficiary of COVID-19, Enjoys Smooth Sales This Year

Recently, Lululemon's popularity has become even more intense. While the fashion industry faces challenges due to COVID-19, Lululemon has maintained its sales thanks to its loyal fan base. In fact, Lululemon is considered a beneficiary of COVID-19. As fitness centers have increasingly closed during the prolonged pandemic, the number of 'home training (home training) enthusiasts' working out at home has grown.

Lululemon's popularity is reflected in its recent performance. The company announced that its first-quarter sales this year reached $1.23 billion (approximately 1.3742 trillion won), an 88% increase from $652 million (approximately 728.4 billion won) in the same period last year.

Fueled by this popularity, the number of stores is also increasing. As of the end of 2019, Lululemon operated 491 stores across 17 countries, and by the end of the third quarter of 2020, the number of stores had risen to 515.