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GLOBAL EXPANSION STRATEGY
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Group Lululand
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Executive Summary
Overview of global market and North America market: What is Athleisure and what’s it like?

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External Analysis
Since the North America market, where lululemon originated, is saturating, global expansion is critical.

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Introduction: lululemon’s history and product matrix

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Internal Analysis Analysis: Take a closer look at each activity in the company’s value chain, and figure out the sustainable competitive
advantages of lululemon

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Problem Key issue: How should lululemon leverage its sustainable competitive advantages and dynamically adjust its intrinsic

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Statement resources to global markets, taking into account the slowdown in growth amid fierce competition?
Scenario Planning: Give strategies on entering and development in different markets.
Chinese market features: Japanese market features: India market features:
• Rapidly growing market, many players, • Consumers do not have a strong • Mature yoga culture, and

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Market Analysis
mature e-commerce culture, seek for exercise habit, care less about price, consumers have a preference for
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personalized experience
According strategy:
and tend to have high brand loyalty
According strategy:
• What to do
membership
According strategy:
• What to do
• What to do
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• What not to do • What not to do • What not to do
Mideast market features: Africa market features:
European market features: Latin America market features:
• Progress in promoting gender • Lower purchasing power
• Strong local competitor • Gen Z demand ”Latinidad”
Recommendation equality, and Physical stores and higher bargaining
in European market (Latinness) from fashion
remains strong power
According strategy: According strategy:
According strategy: According strategy:
• What to do • What to do
• What to do • What to do
• What not to do • What not to do
• What not to do • What not to do

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Table of Contents

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1 External Analysis Global & North America Sportswear Market

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2 Company Overview Company History and Product Matrix

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3 Internal Analysis Company Value Chain
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4 Problem Identification Way to Perform Global Expansion

5 Strategies Plans in Each Country/Region

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Global Sportswear Market
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Overview

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Global Apparel Market Overview
Apparel Is Increasing Slowly, Driven by Sportswear
Apparel Non-Sport Sportswear

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1,200 - Global Apparel Market size remained in slow increasement

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+2%
1,100 - Current market size is about $1380bn

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1,000
900 - In 2008, Apparel Market had a downturn (Financial Crisis)

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+7%
- In 2015, Downturn happened again

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300
- In 2020, the market is affected by COVID-19

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200 European
Migrant
Financial COVID-19
100 and Debt
Crisis
Crisis - The market size now just recovered to the 2017 level
0

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2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Apparel Non-Sport Sportswear

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1,500 Sportswear Becomes the Driver of
0%
Apparel Market
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1,400 -3% 1,373
1,354
1,300 - Sportswear Industry is increasing faster than the whole
77% 75% 74% 73%
Apparel Market
1,200 81% 81% 80% 80% 79% 78% 77%
- The Share of Sportswear increased 50% from 2008 to 2022
300
82% 81% 81% 75% - From 2016 to 2019, the CAGR of sportswear is 7%, but it’s
19% 19% 20% 20% 21% 22% 23% 23%
25% 25% 26% 27% only 2% for the non-sport apparel
18% 19% 19%
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Source: Euromonitor
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Discussion 1:

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Do you know what is “athleisure”?
Have you ever tried it?
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Will you choose it as OOTD(Outfit Of The Day)?
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Why would you choose it?

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The Development of Athleisure Apparel: Athletic + Leisure
From the Minority to Majority, Athleisure Is a Trend

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By Adidas, By Kanye West,

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In collaboration with First collaboration with
NIKE then Adidas

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Yohji Yamamoto

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2001 2014

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2003 2014
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TopShop Athletic
Topshop x Beyoncé launches
Velvet tracksuits are
sportswear as traditional casual
gradually becoming
wear companies start to ramp
more popular
up in the athleisure market

Athleisure Started from the 2000s, and prospered since 2014

Source: Lululand Analysis
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Global Sportswear Market Overview — Why Athleisure is a Trend
Millennials Turned Athleisure into Fashion

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Millennials are the largest demographic

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Performance Apparel Outdoor Apparel Sports-inspired Apparel around the globe, comprising 23% of
world’s population and have 1.8bn people

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• They increased health consciousness, and

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made a cultural shift in the workplace
39% 41%

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45% 44% 43% 44%

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• According to The Harris poll, 72% of
millennials prefer to spend their money on
16% 15% 13% experiences, rather than material things

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2008 2022 2026E • Athleisure clothing is typically worn for an
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Athleisure Becomes More and More Popular Since 2015 experience(comfortableness), and they are
more often than an outdoor experience
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• The rise of fitness-conscious consumers who consider athletics
not only as a hobby but also as an all-around lifestyle
Millennials Turned the
Athleisure Market to Be a • The desire for clothing to be comfortable, even when it's
Prosperous One supposed to be functional, like formal wear in professional
situations
Source: Euromonitor 8
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Global Sportswear Market Overview — Why Athleisure is a Trend
Social Media with Celebrity Endorsement

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The Rise of Social Media Celebrity Endorsement

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• Though social media appeared long ago, but they • Beyoncé and Rihanna are considered the key influencers to

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skyrocketed with smartphones penetration rate bring athleisure into the mainstream
increases • These celebrities can display every aspect of their daily life.

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• e.g., Instagram was launched at 2010, but by The social media traditions like ‘behind the scenes’ coverage

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2012, it only has ~10m users, the number in have motivated their millions of followers to adopt the more
2014 turned to ~200m laidback and casual way of living

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IN O Technology
Amplified
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The
Social
Influence

In the year of 2015, “Athleisure” was added to Merriam-Webster Dictionary

Source: Internet Data, Lululand Analysis
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Global Sportswear Market Trend — Slower Growth
The “Cake” of Nondurable Goods Market Stops Growing
120
US Europe Durable goods Nondurable goods

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30 100

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20 80

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10 7.00 60
2.10

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40
0

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0.90

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-10 -1.60
0
-20 -20

-30 -40

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Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2019 2020 2021 2022 2023 2019 2020 2021 2022 2023
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GDP Growth is Getting Slower Since 2022
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US Consumer Expenditures on Goods Are Decreasing

• GDP Growth Rate of America is now only 2% and still dropping, for
Europe, the growth rate is maintained at a relatively low level. Consumers are less willingly
• Private consumption takes ~70% of US GDP and ~60% of Europe GDP to spend money on Non-
• Personal consumption expenditures of nondurable goods’ growth rate durable goods
in US are negative in 2022 and below 1% in 2023
• History low consumption expenditure
Source: U.S. Bureau of Economic Analysis; Eurostat
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Global Sportswear Market Trend — Slower Growth
US High Inflation Rate Even Worsen the Situation
7 6.62

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OECD USA

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6

5 5

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5.01
4

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3

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2

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2019 2020 2021 2022 2023 2019 2020 2021 2022 2023
US CPI since 2019
IN O US Consumer Confidence Index Compared with OECD

• Consumer Price Index(CPI) climbs since 2022 and reached 6.62% early 2023
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• Currently it still remains above 5%, which is considered a dangerous red
line.
Due to high CPI,
• 2~3% are considered as healthy CPI, if it’s higher than 5%, inflation
takes place
Consumers are losing
• Price of all goods are getting higher, but wage is temporarily sticked to the confidence in consumption
current level.
• Less purchasing power of the money.
Source: U.S. Bureau of Economic Analysis
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Global Sportswear Market Trend — Slower Growth
Multiple Reasons Deeply Affected the Industry, the Industry Now Faces Challenges

Corporate Social Responsibility (CSR): Geopolitics

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• Political pressure on • The collision between Russia and

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companies to be more Ukraine

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socially responsible has • The Israeli–Palestinian conflict

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30,702
grown in recent years.

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• Companies are expected to
operate ethically, ensuring
fair labor practices and

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11,889
community engagement.
IN O 2021 2022 2023
The World Uncertainty Index
Higher International Trade Restrictions
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Sustainability
Index Oct. 2022 Oct. 2021 YoY
Tariff Measures 112 11 ↑101 Geopolitics, Political
Trade Remedy 69 38 ↑31 Events, Trade Restrictions
Technical Trade 147 74 ↑73 and Sustainability
Import and Export Restrictions 814 9 ↑805 Requirements will
Other Restrictions 213 99 ↑114
hinder the growth
Source: The Global Economic and Trade Measures Index; The World Uncertainty Index
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Take a Closer Look at
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North America Market

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North America Athleisure Industry Value Chain
The Broad Picture, Boundaries Inside Upstream and Downstream Are Blurring

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Upstream - Manufacturing Midstream - Brands Downstream - Retailers

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Fabrics Tinting Knitting Online Offline

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Low Profitability
IN O High Profitability Relatively High Profitability

• Upstream manufacturing: Many supply chains are global, and basically not
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Profitability
23% Shares located in the US or Canada. The margins are relatively low.
32%
• Midstream Brands: Take the designing, marketing, etc. processes, takes most of
Upstream the margins. Some of the brands are going DTC, trying to bypass retailers.
Midstream • Downstream Retailers: The line between online and offline are blurring, retailers
46% Downstream are operating these two channels simultaneously. The margins are preferrable.

Source: Lululand Analysis

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North America Athleisure Market Suppliers
Spreader Suppliers Distribution Is the Trend, and Low Margins Too
# of Suppliers Asia%

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450 80

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400 60

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350 40

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300 20

0 0
2016 2018 2020 2022

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Adidas is increasing the number of suppliers
IN O Nike‘s suppliers are spread over Asia, South
and decreasing the concentration rate of Asia America, Africa, Europe And North America
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Spreader suppliers distribution is the trend, and matured company adopted it

Gross Margin 2022 2021 2020 2019 Gross margin for upstream suppliers
Huali Industrial Group 25.86 27.23 23.88 23.48 are around 25%, which is lower than
the brands and retailers
Shenzhou Intl. Holdings Limited 22.05 24.28 31.24 30.34 *These Suppliers already covered a long chain of manufacturing,
the real margins for small manufacturers will be even lower
Eclat 27.85 26.43 28.67 28.85
Source: Nike; Adidas; Company Financial Reports
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North America Athleisure Market Retailers
Profitable but Brands Are Trying to Bypass Them

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Gross Margin 2022 2021 2020 2019 2018 2017

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Foot Locker 32.01% 34.46% 28.98% 31.77% 31.84% 31.56%

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Big Five 34.27% 37.51% 33.54% 31.31% 30.46% 32.02%

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Dick's 34.42% 35.25% 36.19% 34.64% 34.22% 35.55%

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Retailers are earning ~35% gross margin, which is higher than the upstream manufacturing’s

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Giants Moving To DTC Strategy, Bypassing the retailers
DTC would drive more than 80% of the

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In 2010, DTC made up just 15% of
company’s net sales growth over the next
Nike’s total revenue. By 2020, the
IN O four years as it shifts away from some
number grown to 35%.
wholesale partners
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In Q4 of 2020, DTC grew Committed to 100% Company
11%, and the momentum investing more operated stores
has continued since then in DTC in North America

For brands, backwards integration is feasible, it can let the brand earn more gross margins
DTC mode is more attracting, also with other benefits like gathering consumer direct feedbacks
Source: Retail Dive
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North America Athleisure Market Channels
E-commerce Is Expected to See a Slow Growth After a Decade’s Upsurge
• Why E-commerce boomed with a growth of over 30% in the last decade?

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Reason1: Technology Development Reason 2: Consumer Preference

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➢ Rise of smartphones and tablets ➢ Usually cheaper price to lift customers’ affordability

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➢ Growth of social media ➢ Convenience for customers to browse and purchase clothes at home

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➢ Improvement of logistics and delivery ➢ A wider selection of clothes than traditional brick-and-mortar stores

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• Why slower progress in E-commerce is expected after 2020?

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Saturation of E-Commerce Market End of COVID-19 and Consumers Returning to Offline
➢ More competition among e-commerce ➢ As the COVID-19 pandemic subsides, more people are returning to
retailers, and more difficult to attract shopping in stores, especially apparel shoppers, who want to be

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and retain customers able to try on clothes before buying
Offline E-Commerce
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61% 62%
75% 73% 60%
84% 82% 78%
90% 90% 88% 87%
92% 92% 91%

40% 39% 38%

18% 22% 25% 27%
8% 8% 9% 10% 10% 12% 13% 16%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Source: Euromonitor, Lululand Analysis

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North America Athleisure Market Channels
“Phygital”, a Combination of Physical and Digital Stores, Could Be the Long-term Trend

• Growth of E-Commerce doesn’t mean brick-and-mortar stores are becoming irrelevant. It just means the

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role of offline touchpoints is changing from a point of sale to a point of experience and service.

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• Leveraging the power of physical stores helps brands boost awareness and loyalty, which encourage

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customers to make purchasing decisions across all channels.

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➢ 79% of Gen Z are still influenced by stores and the number is higher in other age groups

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➢ Interactions and in-store technology are two things customers value the most and can’t be substituted by online
shopping

An Example of In-store Technology

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—A Smart Mirror in H&M Stores IN O
• Customers can get personalized styling
recommendations from the mirror as it
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senses what products — including their
size and color — shoppers brought in
• Customers can request new items to be
sent to their dressing room without
needing to leave the space.

Source: McKinsey 2021 New Age Customer Survey 2 Impulse Network Focus Group of Gen Z ,
McKinsey 2022 Sporting Goods, Lululand Analysis 18
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North America Athleisure Market Competition
Fiercer Competition Among Brands from Both Sportswear and Fashion Sectors
• At the early stage of Athleisure Market, brands specialized in different niche markets and offer products

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with different features. Additionally, big brands like Nike and Adidas have few offerings on female products

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• But now, brands are offering similar products, e.g. Nike offers leggings while lululemon offers hoodies

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2000s Now

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Competitors Competitors

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Yoga Specialty Brand Yoga Specialty Brand

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Sportswear Brand Sportswear Brand
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Fashion Brand Fashion Brand

Source: Case Materials, Lululand Analysis

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North America Athleisure Market Competition
Fiercer Competition has Put Pressure on Average Price of the Products
• In early 2000s, sportswear market was dominated by two brands—Nike and Adidas, and other brands

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only took a small share of the market

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• However, the emergence of Athleisure has given new brands a chance to grow and there hasn’t appeared

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2000s
dominant brands in this Now
market. In 2022, CR5 of Athleisure market is only 31.1%

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• More brands compete in the market has led to a decline in the average price of Athleisure products, a fall

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from >$50 in 2014 to approximately $20 in 2017

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Sportswear Market in 2000s Athleisure Market in 2022 Average Price of Athleisure Market ($)

Nike Lululemon Under Armour

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Adidas Skechers 55
35% 4% 4%
IN O 7% 3% 50
45
Nike
14% 40
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35
20% 30
25
Adidas
20

45% 69% 0
2014 2015 2016 2017 2018 2019 2020 2021 2022
Others Others

Source: Euromonitor, Lululand Analysis

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North America Athleisure Market Substitutes
Broader Substitutes Since People Can Wear Athleisure in More Occasions
• In early 2000s, Athleisure is worn in workouts or casual occasions so performance sportswear and casual

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wear like polos and jeans are the substitutes

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• But now, Athleisure can be worn in extended occasions, so more fashion clothing becomes the substitutes

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2000s Now

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Workout Some of occasions added:

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Shopping

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Casual Occasions
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Workplace

Source: Case Materials, Lululand Analysis

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North America Athleisure Market Entry Barriers
Brand Loyalty Is Hard to Build for Both Comprehensive and Niche Brands
Top 5 brands of Athleisure market invest heavily on building their brand images every year. Their selling expenses often take

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more than 30% of total revenues.

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Comprehensive Sports Brands Niche Sports Brands

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• Cover a wide range of products, and each product has • Achieve success by expanding into underserved

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high professional requirements for technology and markets, but the market size of niche sports is limited,

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supply chain and only one brand can often emerge as the leader

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• Be associated with top-tier sports resources, such as • Need to engage in a lot of offline, down-to-earth
the NBA and the Premier League activities with vertical sports enthusiasts

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Rate of Selling Expenses of Top 5 Brands
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50%
Nike Adidas Lululemon Under Armour Skechers
45%
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40%

35%

30%
0%
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Source: Case Materials, Research Report, Annual Report of Each Company, Lululand Analysis
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 Discussion 2:
If you want to start an Athleisure Apparel Company, What’s your proposal?

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Notes:

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Each group is a business team. Each team needs to complete the discussion and draw your

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proposal into a poster within 20 minutes. The content should include:

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1. Introduction of your company: name, logo, main business .etc.

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2. How to organize the internal resources? Internal resources can be analyzed from the
following perspectives, and give your reasons:

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• *Due to the limitation of funds, you can only choose one factor of each resources that
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you will invest.(e.g. Supply chain-digital, channels- online, …)
• Supply chain: rely on supplier or not? Spread supply chain?
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• Channels: offline? e-commerce? digital management?
• Marketing: promotion, activities, pricing
• R&D: innovation, patents
• Human resources and organizational structure
The external environment you faced is described above.
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The Development Of lululemon
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And Its Product Matrix

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lululemon’s Development Overview
More Than 20 Years of Development, Accompanied by Several Strategic Transformations
Founding Period Rapid Development Period Tortuous Development Period Recovery Period

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Find business opportunities Global store expansion Constant controversies in the Clarify the "Power of three"
in yoga wear pain points process of development five-year strategic plan

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Close franchise stores - Product innovation

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Target the middle class Frequent product quality problems, - Omni guest experiences
female market continued management turmoil, and - Market expansion

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Develop new product lines

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and DTC E-commerce poor stock performance
Core fabric Luon was born channels Acquire other brands, make
New product launches were weaker up for the shortcomings of
than expected, dragging down profits fabric patents, and enhance

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business collaboration
Lululemon continues to expand
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F globally, entering the Chinese and
European markets

First store opened in Luon yoga pants are

Products are Settle in Tmall
Vancouver Launch the too transparent
expanded from yoga Full transition to flagship store
wear brand ivivva direct operation
First store opened in Open offline stores Put forward "power
London in China of three"

1998 2000 2003 2005 2008 2009 2011 2013 2014 2015 2016 2017 2019
Reduce Launch ABC Large-scale product

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Enter the US market
franchise stores men's pants problem again
Source: Company official website , Lululand analysis
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From “Power of Three” to “Power of Three ×2”
Exceeded Expectations, The Next Phase Continues to Provide Momentum for Business Growth
"Power of Three" was completed beyond expectations

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Brand &
Community It is expected to quadruple from
Market development: Globalization

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2018 to 2022

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Total customer experience: DTC+E- Triple DTC revenue from 2019 to
Power of Three

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Innovation
commerce 2021

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User
Product Experie
nce Doubling men’s wear revenue two
Product Innovation: Men's business years ahead of schedule

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Strategy prototype in 2015 Achieve the target ahead of
IN O “Power of Three” in 2019
schedule by 2022
"Power of Three × 2" Continues to Drive Business Growth
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Cross-category innovation, such as footwear and Double the men’s wear
Product Innovation other new categories of products business by 2026

Create the most immersive fitness market in the Double the DTC by 2026
Power of Three × 2 Customer Experience industry

Develop core markets and expand into countries not Quadruple international
Market Expansion covered by Asia Pacific and Europe revenue by 2026
Source: Company official website , Lululand analysis
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lululemon’s Product Matrix
Starting from Women Yoga Clothing, Expand into Men’s Clothes and Athleisure to Accelerate the Product Range
Women’s Clothes Men’s Clothes

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TOPS

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Coats & Hoodies & Coats & Hoodies &
Sports Bras Shirts Sweaters Shirts Sweaters
Jackets Sweatshirts Jackets Sweatshirts

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$79-$598 $29-$108 $19-$188 $59-$168 $59-$198 $79-$398 $29-$198 $79-$198 $59-$248

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BOTTOMS

Dresses Pants Shorts Socks Skirts Pants Shorts Socks Swim Trunks Underwear

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$44-$148 $39-$168 $29-$119 $9-$68 $19-$188 $59-$248 $39-$148 $9-$58 $59-$98 $19-$158
IN O Shoes
SHOES

F
Running Workout Casual On the Move Training Hiking Travel Yoga
$74-$158 $69-$148 $49-$58 $49-$58 $69-$148 $99-$158 $49-$128 $49-$58
Accessories
OTHERS

Wallets &
Bags Backpacks Totes Caps Hair Ties Headbands Mat Straps
Pouches
$9-$198 $34-$198 $28-$48 $38-$148 $14-$78 $9-$32 $9-$28 $18-$34

Source: Company official website , Lululand analysis

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The Value Chain of lululemon
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——Where Lies Our Strength

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Value Chain
Overview

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Strengths and Weaknesses in Resources

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Supply Chain Analysis Channel Analysis Marketing

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• E-commerce channels • Community
• Dependence on suppliers
• Company-operated retail • Educator

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• Digital supply chain
Primary stores • Ambassador
system
IN O
Activities • Online channels • Activities
• Quality control measures
• Customer relationship • Social media
• Inventory management
F
management system • Sales and Pricing

Supportive Research and Development Human Resources

Activities Product innovation, Seasonal team, Patents Culture, Talents, Organization

Source: Lululand Analysis

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Supply Chain Management Dive in
Positioned as a Vertical Retailer and Adopt the Light-asset Model
The Production Process Of lululemon Outsourcing

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Fabric Product Material Product

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Selection Design Supplier Purchase Manufacturing

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Distribution

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Marketing &
Logistics
Sales

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Localized Industrial Chain
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Key steps Spinning fiber Fabric Apparel Sales
F
Nylon filament,
Main content Elastic material Yoga wear DTC store
Polyester filament

Representative Taihua New

Best Pacific lululemon lululemon store
company Material Co., Ltd.

*In this context, the “Vertical Retailer” emphasizes that lululemon vertically integrates downstream distributors, selling products directly to consumers.
Source: Annual report, CICC 30
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Supply Chain Management Dive in
The Number of Suppliers Is Stable with Underlying Risk of Over-dependence on Certain Suppliers
The Number and Concentration Degree Of Material Suppliers The Geographic Distribution of Fabric Suppliers

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China Sri Lanka Other region
Numbers CR5 CR1 %
70 76 80 • The number of
21% 21% 22% 22%

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60 65 65 65 65 60 70 material suppliers
Ø 66 • Fabric suppliers are
60 fluctuates in a stable 19% 16% 11% 16%

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50
50
mainly concentrated
40 range in the Asia-Pacific

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40
30 • Dependence on the

M
30
67%
region
20 20 biggest supplier is 60% 63% 62%
10 10 gradually declining
0 0
2017 2018 2019 2020 2021 2022

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2019 2020 2021 2022

The Number and Concentration Degree Of Vendors The Geographic Distribution of Vendors

70
Numbers CR5
IN O
CR1 %
50
Vietnam
Cambodia
Sri Lanka
China
Bangladesh
Indonesia
Other region

• Mainly concentrated
47
• lululemon has put
F
44 45
60 39
40 41 45
Ø 43 12%
20%
in the Asia-Pacific
40 efforts to reduce 26% 25%
50 35
11%
7% region
30 dependence on top 15% 9% 7%
11%
8%
• In FY22, lululemon
40 12% 12%
25 vendors, as the CR5 16%
17% added new vendors
30 20 20% 14%
15
and CR1 have been in Indonesia and
20
10
10 gradually declining 46%
33% 40% 39% Bangladesh
5
0 0
2017 2018 2019 2020 2021 2022 2019 2020 2021 2022

Source: Annual report, Bloomberg

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Supply Chain Management Dive in
Improve Management through Digital Supply Chain System and Strict Quality Control Measures
Problem Identification Measures Taken 1

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• In March 2013, lululemon faced quality issues that Digital Supply Chain Management
forced the company to recall and halt the sale of its

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How To Do:
popular products.
• Product lifecycle management (PLM) software

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• As a result, lululemon experienced a series of personnel
changes. − This tech helps retailers ensure that the journey products take

RN i
from idea stage to creation and development is tracked in one

M
• lululemon missed the entire peak buying period in
2013. central place across different territories and departments,
• Led to an accumulation of inventory and affected the optimizing supply chains as a result.
launch of new products in 2014. What Can Be Achieved:

TE R
IN O React more quickly and align closely with market
demand
Poor quality control
F
Allow better vertical integration
Slow market response
Enhance the product development and respond swiftly
Delayed production plans to the market
Allow manufacturers to forecast in advance, stock up
Slow supply chain response earlier and improve efficiency

Source: Global research, Lululand analysis

32
LuluLand
Supply Chain Management Dive in
Improve Management through Digital Supply Chain System and Strict Quality Control Measures
Measures Taken 2 Outcome

N L 23
SE
Quality Control Our ongoing commitment is to create and build upon

O A M
• VCoE safe, healthy, and equitable environments with our
• What is VCoE: Vendor Code of Ethics outlines the company’s

LY U
suppliers and manufacturing partners.
commitment to respect human and labor rights, and to

RN i
promote safe and fair working conditions for people in the

M
supply chain.
• What is VCoE used for: lululemon’s finished goods and mill
suppliers are assessed against the VCoE prior to forming a
Finished Goods Raw Materials 70%+

TE R
business relationship. 200,000+
• Pre-Production Assessment IN O Produced In Produced In Supplier Female
• Before engage in a new partnership, suppliers sign the VCoE, 17* Countries 17 Countries Workers Workers
and lululemon conduct a full assessment.
F
• Evaluate the Performance of suppliers
• On-time delivery, quality, sustainability, and corporate social
responsibility are the most important Key Performance Our supplier relationships go beyond labor compliance.
Indicators (KPIs). Together, we collaborate to support worker wellbeing
• Establish long-term strategic partnership with suppliers which can through workplace practices and community support
meet the requirements initiatives.

LuluLand
*Date as of April 2023
Source: Company website
33
Supply Chain Management Dive in
High-Tech Application Enables Better Inventory Management Compared with Competitors
Performance of lululemon’s Inventory Management What Does lululemon Do?

N L 23
SE
• Due to the longer transportation distance and influence of pandemic, RFID tech applied in inventory management
the inventory increased by ~43% in FY22 compared to FY21, with

O A M
Upper Management:
nearly 2% of the inventory in transit. decision-making for greater

LY U
efficiency
• lululemon also intended to increase its inventory mainly aims to

RN i
meet the sales demands worldwide and the peak shopping season

M
Regional
during the fourth quarter holidays in the US. Management: Precise Customers: Reduce
visibility of stockouts, increase
• lululemon's inventory turnover management efficiency is better
store/regional satisfaction
than other major sports giant brands including Nike, Adidas, etc.

TE R
inventory
Days of inventory turnover
IN O
Lululemon Under Armour Nike Adidas 175
180 Employees: Reduce Others: Timely
F
repetitive tasks delivery of goods
160
139 138 139 131 141 140
140 128 125
120 119 106
120 112 110 109 • Allow store staff to leverage “real-time, accurate data”
100
96 93 91 93 96 • Support the company’s fulfilment offerings such as buy
84
80
online, pick up in store
• 500+ stores adopted, 98% accuracy achieved
60
FY2016 FY2017 FY2018 FY2019 FY2020 FY2021

Source: Bloomberg
34
LuluLand
Supply Chain Management Dive in
Well Organized Distribution Center and Transportation System Enables Better Product Delivery
Distribution Center Transportation Methods

N L 23
•

SE
• Operate and distribute finished products from distribution Strike a balance between efficiency and cost: lululemon has
facilities in the United States, Canada, and Australia. gradually increased its use of pricier air freight to get its products

O A M
• lululemon owns distribution center in Columbus, Ohio, and lease to market due to the congestion in Asian ports
other distribution facilities.

LY U
• Access offshore resources: (1) Enables faster response. By
• Utilize third-party logistics providers to warehouse and collaborating with suppliers in Central America, goods can be

RN i
distribute finished products from their warehouse locations in

M
transported by waterway to Miami in just 3 to 4 days. In
the United States, the PRC, and the Netherlands.
comparison, shipping from Asia to the United States takes 30 to
• Regularly evaluate the distribution infrastructure and
40 days by sea. (2) Collaborating with offshore suppliers allows
consolidate or expand distribution capacity appropriate for the

TE R
operations and to meet anticipated needs the use of DDP, resulting in better control of the supply chain
IN O efficiency.
Ten thousand square feet
lululemon International Distribution Center
40
31 As a vertical retailer, lululemon has established a close
F
30
relationship with its suppliers, achieved a better inventory
20 15 16 management, and built a global logistics system.
10
However, these capabilities are some temporary
5 competitive advantages that has also been owned by
0 many other giants like Nike and Adidas, and it should
Columbus, OH Sumner, WA Vancouver, BC Melbourne, VIC
Owned logistics Leased constantly put resource and efforts to maintain these
warehouse warehouse capabilities for better development.

Source: Annual report, Xinan Securities, Lululand analysis

35
LuluLand
Channels Dive In
Revenue by Channel and Company Operated Stores Distribution
Country Number stores

N L 23
United States 350
China 117

SE
Company-Operated stores E-Commerce Others Canada 69
Australia 32

O A M
UK 20
9% South Korea 16
11%

LY U
Germany 10
New Zealand 8
45%

RN i
Singapore 8
45% Japan 7

M
46% France 4
Ireland 4
44% Spain 3
Malaysia 2
Sweden 2

TE R
Netherlands 1
2022 2021 Norway 1
IN O Switzerland 1
F
• The company's sales channels consist of Company • lululemon has a substantial global presence, with
operated stores, E-Commerce, and other channels. stores in various countries and regions.
• Company operated stores and E-Commerce • Among these, the highest number of lululemon
channels contribute to ~90% of its revenue. stores can typically be found in the United States,
• The company‘s other channels primarily refer to Canada, China, and Australia.
outlets and temporary sales points.

Source :Annual report, Lululand analysis

36
LuluLand
Company Operated Stores
The Number of Company-operated Stores Is Expanding, and Store Space Is Steadily Increasing
700 Store area (square feet) Number of stores 655

N L 23
3,100

SE
600 574
521 3,000
500 491 • The number of company-operated stores is

O A M
440 2,900 steadily expanding, and store space is steadily
406 404
400 363

LY U
2,800 increasing.
302
300 254 2,700 • The company continues to enhance its store

RN i
211

M
200 174 2,600 image, with the average store space
133
100 2,500
increasing year by year since FY2011.
0 2,400

TE R
10 11 12 13 14 15 16 17 18 19 20 21 22
IN O
Use sales per square foot to assess the
F
performance of their company-operated
stores.

3 times than that of Nike

Source :Annual report, Company website

37
LuluLand
Company Operated Stores
Flagship Stores Enrich Shopping Experience. Regular Stores Offer Core Product Lines
Flagship Store Regular Store

N L 23
SE
O A M
LY U
RN i
M
TE R
IN O
F
Regular stores are the primary and most common type
Flagship stores are large retail locations, often located of lululemon retail locations. They are in various cities
in major cities or prime shopping destinations. and shopping centers.

Showcase a wider selection of products

Offer lululemon's core product lines
Offer an enriched shopping experience
Source: Annual report, Company website, Lululand analysis
38
LuluLand
Company Operated Stores
Showrooms Test the Waters for Its Products & Lab Introduce Experimental Designs
Showrooms Lab

N L 23
SE
O A M
LY U
RN i
M
TE R
IN O
F
Showrooms are smaller stores with reduced inventory lululemon Lab stores represent an experimental
and fewer opening days. concept, often located in major urban centers.

Test the waters for its products Introduce experimental designs and product lines
Introduce them to a new market
Source: Annual report, Company website, Lululand analysis
39
LuluLand
Company Operated Stores
Lululemon's Largest Store in Chicago's Lincoln Park Neighborhood
Product Sales Exercise Areas Dining Options

N L 23
SE
Attracting Off-Hour Visitors
Effectively draws in visitors during

O A M
non-peak hours, with notable

LY U
increases in the percentage of

RN i
morning and evening visitors

M
TE R
Increased Visitor Engagement
Visitors to the new branch spend
IN O
F 16% more time on-site compared
to other high-performing locations

-Meditation studio Immersive Experience

-Women's items Company's first-ever
-Yoga studio restaurant called "Fuel"
-Men's assortments
-Workout studio
Source: Retail Info Systems
40
LuluLand
Lululemon VS Athleta
Lululemon Has More Company Operated Stores Which Are More Design-focused

VS

N L 23
SE
O A M
Store Locations Store Design

LY U
City lululemon Athleta

RN i
California 67 35 lululemon Store

M
Texas 34 16
New York 27 16
Florida 27 13

TE R
Colorado 20 13
New Jersey 15 IN O 13
Massachusetts 15 12
Pennsylvania 14 11
F
Illinois 14 10
Athleta Store
Tennessee 12 10

lululemon has more stores in each U.S. city than lululemon's stores have a distinct design, and Athleta's stores tend to
Athleta does. be more standardized in design.

Source: Annual report, Company website, Lululand analysis

41
LuluLand
E-Commerce is Developing
Multiple Online Channels Operate Effectively to Enhance Consumption Experiences
Official Website Mobile Application Third-Party Cooperation Platform

N L 23
SE
O A M
Authorized By lululemon

LY U
RN i
M
Sell In Third-party Platform

Offer membership privileges,

TE R
Offer a complete product range Expanding the international market, Increased the
convenient shopping experiences and
with an emphasis on high quality, brand's international exposure, becoming an important
IN O personalized interactions to meet the
performance and global service part of lululemon's internationalization strategy
needs of young, efficient shoppers
• Direct sales function where • Early purchase chances,
F
customers can buy products convenient in-store checkout, Involve E-commerce channels in 2009
on the website and make personalized recommendations
online payments. Tmall official flagship store opened in 2015
and tracking capabilities.
• Provide detailed product • Check out quickly, save favorite Entered Wechat Mall in 2018
information, sizing guidelines items, view inventory sizes, and
and user reviews. create shared wish lists. Tmall Super Brand Day was launched in 2019

Source: Company official website , Lululand analysis

42
LuluLand
Use CRM to Integrate Omni-channel Data Resources
Online and Offline Channel Linkage to Achieve Cost Reduction and Efficiency

N L 23
SE
Platform E-
Store POS

O A M
commerce LTV Exercise habit
machine
Marketing Marketing Campaign

LY U
platform
Transaction data User interaction

RN i
M
Customer Personalized marketing interaction
Interaction data Data analysis Product
Individual relationship Data insights and predictive analytics recommendation
community
Management

TE R
User data Marketing plan
IN O (CRM) system User personal account browsing

Third-party platform Address media Sales

F
Service
center

Manufacturing
Mail …… …… process
• Quickly understand key business metrics such as Life Time Value (LTV) and engagement metrics.
• Get a 360-degree refined user portrait with over 500+ dimensions based on multi-dimensional data.
• Emphasis on consumer-centric interactions with an unrivaled focus on the consumer experience.
• Buy online, pick up in-store

Source: Company official website, Lululand analysis

43
LuluLand
Channels Dive In
Lululemon’s Company Operated Stores Bring Long Term Competitive Advantage

N L 23
SE
O A M
Perfect Performance：

LY U
Long Term Competitive
• Widespread

RN i
Advantage
• Immersive

M
Company Operated Stores

TE R
IN O
F
• Reach More Consumers Short Term Competitive
• Integrate Data Advantage

Online Channels
Source: Lululand analysis
44
LuluLand
Marketing Strategy Overview
Unique Marketing Approach Allows the Community to Interact Well with the Product Design
Maintain its brand identity while keeping marketing costs low

N L 23
SE
Positive interaction in Get direct feedback from customers Receive discounts

O A M
the design process on fit, fabric, quality and design due to feedback

LY U
Offer an integrated guest experience across channels

RN i
M
Inspiration Activities Products

TE R
• Ambassadors • Ambassadors • Ambassadors
will provide IN O provide experience the
information on educational products
everything programs and
F
themselves,
from product activities give critical
and store through online
feedback, and
and offline
design to how discuss them in
stores and in
it is presented the the context of
in the community. the product
community. range.
Source: Futu Securities, CICC
45
LuluLand
Community-based Marketing
Product Educators and Ambassadors Play an Important Role
• Unlike other athletic brands, the core of lululemon's marketing is a Stores

N L 23
Hire
community campaign mediated by product educators and brand

SE
Educators
ambassadors. Maintain Relationship

O A M
• As of the end of FY2021, the company has more than 20,000 store

LY U
associates and more than 1,500 ambassadors. Organize Activities
Ambassadors

RN i
M
Promote Brand Culture

Product Educators Ambassadors Core Potential

Customers Customers

TE R
• The ambassadors are divided into two
• Product Educators are responsible for
IN O levels: global ambassadors are generally
communicating the brand's mission composed of celebrity athletes or top yoga
and distinctive community culture to masters, and local store ambassadors are
F
customers. generally composed of local opinion
• lululemon is willing to pay higher leaders.
salaries to hire "Super Girls" who love • The company creates a team of
sports and life and are highly ambassadors with KOL attributes, utilizing
compatible with the lululemon brand their social networks to help spread the
philosophy. product in a low-cost and efficient
manner.
Source: CICC, Tianfeng Securities
46
LuluLand
Community-based Marketing
Organize Activities to Maintain a Strong Connection and Increase Consumers Loyalty
Comparision of lululemon and Nike Interactive Activities

N L 23
SE
• Nike activities focus on commercialization • Organize large-scale
• Nike uses high price to hire coaches brand events in different

O A M
• lululemon's ambassadors are completely free to help countries with local

LY U
• The type of lululemon’s activity is more based on the store characteristics

RN i
• Organize Hot Sweat Play

M
VS. Parties in London, UK,
Shenzhen, China and
Activity Comparison lululemon Nike other places, with more

TE R
Operating Model Decentralization Centralization than 1,000 participants
• Organize small
Event Venue
Coach
IN O
Stores
Ambassadors
F Third-party Venues
External Coaches
community activities
such as running, yoga,
and training
Commercialization Low High

Research Found that 98% of People Would Shop Experimental Results in 4 Cities Show: More
On-site at lululemon Stores after Events Engagement, More Sweat, More Consumption

Source: CICC, Case

47
LuluLand
Community-based Marketing
Utilize Social Media to Strengthen Brand Image and Actively Engage with Consumers

N L 23
Reinforce brand identity
•

SE
Communicate brand values
Position • Engage users through a variety of content types such as

O A M
photos, videos, stories and user-generated content,
which helps to nurture loyal consumers

LY U
RN i
M
Target • Young, active social media users and potential

TE R
Group customers interested in sports, health and fashion
IN O
F
Brand-generated Content

• Utilize social media platforms, such as Instagram,

Facebook, and Twitter, to engage with its audience and
Ways
share brand stories, campaign messages and form
communities Professional- User-generated
generated Content
Content

Source: Sealand Securities, Instagram, Facebook, Weibo, Xiaohongshu

48
LuluLand
Related Resources
Educators, Ambassadors and Social Media

N L 23
Educators Ambassadors Social Media

SE
O A M
LY U
RN i
M
• They're employees of lululemon • They’re not employees of lululemon
• Organize valuable events and enhance • Attract a large amount of people to join • Deliver brand value in
online communities

TE R
customer loyalty featured events in different cities
• Lululemon finds candidates by taking • Ambassadors consists of popular • But other competitors
IN O
yoga classes and nurtures them over athletes and yoga masters, other brands also use social media
to actively interact
time to become educators, which would cost a lot to hire these people
F
means competitors need to spend a lot • Unlike its competitors, lululemon’s with consumers
of time developing educators ambassadors participate in activities
• Lululemon sets up incentives to help with consumers, not just shoot
educators advance in rank and salary commercials
• Interact with the organization in design
process

Source: CICC, Case

49
LuluLand
Sales Strategy
Layout Around Specific Scenes and People

N L 23
Gym Yoga Studio Athletes

SE
O A M
The company offers wholesale The company provides yoga The company builds good

LY U
to professional venues because studios or clients with some relationships with

RN i
these places provide customers peripherals, such as yoga bricks, professional athlete teams

M
with professional guidance for yoga mats and elastic bands, so as and gives exclusive rates to
their sweaty lives, which is not to vertically and accurately partner teams.
something that traditional increase the exposure in the eyes

TE R
clothing outlets can achieve. of the target audience.
IN O
F

Distinctive Sales Strategies

Source: Sealand Securities
50
LuluLand
Pricing Strategy
Premium Pricing Strategy and Differential Pricing Strategy
High Pricing Leads to High Profits Pricing Varies in Different Countries

N L 23
SE
• lululemon's products are usually more expensive • According to the company’s e-commerce website, the Align
• Pants usually cost no less than $80, which is generally higher Pant selling for $98 in the United States was being sold at

O A M
than Nike's and other products. ¥1080 (approximately $148) in China’s e-commerce market.

LY U
• lululemon's original target market could be defined as educated, Similarly, the Long jacket selling for $398 in the United States

RN i
middle- to high-income, health-conscious women between the was being sold at ¥3280 (approximately $448) in China.

M
ages of 18 and 35. • One possible reason is that the Chinese market is a seller's
• Thanks to its premium pricing strategy, lululemon's gross market with weak bargaining power of consumers.
margins are significantly higher than Nike's.

TE R
Gross margin(%) 58
58 56 56
56 55
54
IN O
F 55

52
50
48 46
46 45 45
44
44 43
year Chinese Price ￥1080
0 Chinese Price ￥3280
2019 2020 2021 2022 2023
Lululemon Nike U.S. Price $98 U.S. Price $398

Source: Sealand Securities, lululemon Website, Case, Wind

51
LuluLand
R&D Dive In
High-Performance and Stylish Product Since Start-up

lululemon digs out

N L 23
Design Traditional sportswear lululemon yoga wear

SE
the unmet needs
•

O A M
The fabric is thin, revealing the
• Used 86% nylon and 14% Lycra
complete underwear

LY U
• Solve the transparency problem,
• The fabric has poor ductility
manage sweat and stink well

RN i
Fabric and is prone to cracking

M
• Spend $80,000 to bring in two
Japanese machines, introduce
• Easy to rub the skin during

TE R
flat seaming technique
exercise and cause rashes
• Padded an additional diamond- Traditional sportswear
• Cut of the crotch makes it easy
IN O shaped inner lining in the pants,
Stitching to strangle the Camel toe
and then solved the awkward
F
camel toe problem

• Composed of tights, elastic

sweatpants, ankle pads,
• Just a top and legging
corsets and belts, which are
Constitution complex to match and wash
lululemon yoga wear

Source: Lululand Analysis

52
LuluLand
R&D Dive In
Satisfying Customers’ Functional and Stylish Needs

Functional Innovation Stylish Design

N L 23
SE
• Ten colors meet the needs of

O A M
women for daily outings
Women's Running • BLISSFEEL is specifically designed to
• The classic brand logo is on the toe

LY U
Shoes fit and feel good on women's feet
and sole of the shoe, adding a touch

RN i
M
of brand

• Stretching the tight vest so that it can

TE R
cover part of the buttocks • Unique designs such as "night flash" and
Yoga Wear •
IN OAll long-sleeved sportswear is designed "reversible" are available
with thumb holes
F
• Modify the abdominal line, making it
• Capture the position changes of the look longer and slimmer
The Enlite Bra breast during exercise to develop high- • Modify the secondary breast problems,
intensity exercise situations and the angle of the side of the chest is
more perfect

Source: Lululand Analysis

53
LuluLand
R&D Dive In
User-centered Strategy is Well Practiced Across the Whole R&D Process

N L 23
Agile connection with Feedback Forum Leverage Ambassador Program Interactive Lab

SE
• It combines the concept of the
• Ambassadors receive

O A M
• This Feedback Forum, includes over laboratory with the physical
development tools and products

LY U
12,000 highly engaged consumers who store, where consumers can
to try out
provide feedback on everything from intuitively observe the design

RN i
• They can provide useful feedback
•

M
product names to in-depth information The best-selling designs in
to the designers in terms of the
on their behaviours and attitudes lululemon Lab could make their
function and style
way into market

TE R
6 Weeks generate guest insights Our ambassadors help us to keep
IN O
1.5 Weeks
F our finger on the pulse of their
communities and provide
valuable feedback.
Standard lululemon —Chip

Management strives to have information flow from the design process to the shelves in retail stores in
a short period of 45 days
Well-organized

Source: Lululand Analysis

54
LuluLand
R&D Dive In
Seasonal Team Dedicated to Product Research and Development

N L 23
Experienced and Talented Team Leader Whitespace Consisting High-tech Talent

SE
Chantelle Murnaghan, Chief Whitespace

O A M
Product Officer

LY U
• Joined Whitespace in 2015 • In 2012, Dr. Waller founded Whitespace, an
R&D center

RN i
• 10+ years of research and teaching

M
expertise in Neuromechanics and • Consist of textile workers, scientists,
focuses on taking a human first physiologists, mechanical engineers
approach to innovation in product

TE R
IN O
Tom Waller, former Chief Science
Committed talent

Officer
F
• Worked in lululemon from 2012-2021 • These talents are committed to researching
• Starter of lululemon Whitespace unsolved demand in sportswear market
• PhD in sports technology and has • Fierce discussions will be conducted before
worked on Olympic swimming and developing new products every quarter
World Cup soccer

Source: Company website, Lululand Analysis

55
LuluLand
R&D Dive In
Plenty Patent, Building Their Patent Wall to Protect Themselves

N L 23
Strong Patent Resources Intellectual Property Protection

SE
Patents that lululemon file every year
lululemon attaches great importance to the

O A M
100 600+ design, cutting process and color

LY U
RN i
50
Over a yoga pant design, 2012

M
Accused fashion house Calvin Klein Inc. of
0 patent infringement over a yoga pant
2012 2014 2016 2018 2020 2022 design in court filing

TE R
1 Competitive advantage
IN O
Can be used to leverage your competitive Sports bra, 2017
position and distinguish your products, Dropped a similar case against Under Armour
F
appearing innovative to the market Inc. that accused the athletic apparel

2 Attract talent Leggings, 2021

Attract technical talent to a company, Infringed on patents for a new line of
protecting research and development leggings and sports bras
investments

Source: Lululand Analysis

56
LuluLand
R&D Dive In
Resources Underlying Lululemon’s Strong Innovation

N L 23
SE
Product Innovation

O A M
LY U
Insightful Customer Research Long Term Competitive Advantage

RN i
M
TE R
Patent Protection
IN O Long Term Competitive
Seasonal Team
Advantage
F
100
100

Temporary Competitive
Advantage

Source: Lululand Analysis

57
LuluLand
Human Resources Dive In
The Core of Lululemon’s Culture Lies in People Development

N L 23
SE
Three Circles of the Hedgehog Concept Purpose:
• We elevate human potential by helping people

O A M
feel their best.

LY U
RN i
M
Athletics. Values:
• Courage, connection, inclusion, personal
responsibility and fun.

TE R
People Development
IN O Vision:
Culture
• We create transformative products and
F
experiences that build meaningful connections,
Vertical retail.
Black stretch pants. unlocking greater possibility and wellbeing for all.

Commitments:
• IDEA——Inclusion, Diversity, Equity, and Action.

Source: Lululemon Impact Report 2022

58
LuluLand
Human Resources Dive In
Recruiting Principle and Mindfulness Programs Ensure Employee Cultural Identity

N L 23
The Power of Attraction Mental Training

SE
O A M
“Landmark” Mental

LY U
Awakening Courses

RN i
Training

M
Lululemon Institutions Identification

TE R
Referrers Sales
I wanted Super Girl employees to interact with Super
IN O Influence Dream
Brand
Girl customers. Ambassadors
Educators
—— Chip Wilson
F
Recruiting store educators: Triangular Cultural
• Inviting candidates to attend a class together, “Four-in-one” Operating Cycle System:
observing them during physical activities, and Organizational Operating “Influence
assessing their alignment with lululemon’s values Structure - Dream
through interactions during exercise. - Identification”

Source: Lululand Analysis

59
LuluLand
Human Resources Dive In
Employee Benefits Create Comfortable Working Environment

N L 23
Employee Benefits

SE
Everyone in the team should be happy, and there’s no need
to take life too seriously. For every lululemon employee,

O A M
there are two free classes each week, where employees can Life

LY U
choose from yoga, pole dancing, or comprehensive training,

RN i
Work
all fully covered by the company. We want employees to not

M
spend their entire day working in front of a computer but to
focus more on the work-life balance itself.
—— lululemon’s Community Manager, Flora Zhang

TE R
IN O
Benefits are great and you only have to work • According to employee surveys conducted by
25 hours a week to be considered full time. Glassdoor, in 2018, lululemon ranked 6 in the
F
global list of the best workplace environments.
• lululemon firmly believes that only with an
Great culture and emphasis on personal health improved quality of life for employees can they
with complementary classes in the store for self. effectively give back to their work.

A Cohesive Culture and Talents Aligned with Corporate Values

Source: Glassdoor, Lululand Analysis
60
LuluLand
Human Resources Dive In
Goal Setting Encourages Employees to Grow with Lululemon

N L 23
Goal Setting CHIP WILSON

SE
Number One Goal:
• Within six months of hiring, a person will have taken the

O A M
Landmark Forum and be coached on how to set their

LY U
two, five, and ten-year goals, which include two for

RN i
M
each of health, business and personal growth.

TE R
IN O
• A two-day outing for each person to
Quarterly
F
report on their quarterly summary, set
Team
goals for the next quarter, and undergo
Building
brand culture training.
• Regional managers visit various stores for
Quarterly
in-depth conversations with educators,
Educator
inquiring about work experiences,
Breakfast
suggestions they may have, etc..
Source: Chip Wilson, Lululand Analysis
61
LuluLand
Human Resources Dive In
Various Coaching Sessions Give Employees the Opportunity for Personal Growth

N L 23
Coaching Sessions Number of Total Hours Per Year Employees

SE
Participating in Volunteering, Professional Learning,
People, teams, and the entire organization run better and Development

O A M
when we invest in each other’s growth. Every day we

LY U
provide more people with the skills and experiences

RN i
needed to grow inside and outside of lululemon.

M
258K 4.5M
~17X
2022 2025
Support The Person With Their Personal Growth

TE R
IN O
Strengthen Their Skills In Their Current Role
F
Professional coaching Mentoring
>6,000 sessions in 2022 446 signed up in 2022

Leader series Learning opportunities

Fuel Their Career Progression
> 350 participants in 2022 > 20,000 courses in 2022

A Culture of Learning and Self-growing Talents

Source: Lululemon Impact Report 2022, Lululand Analysis

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Human Resources Dive In
Bottom-up Organizational Structure

N L 23
Traditional Structure Bottom-up Organizational Structure

SE
O A M
LY U
RN i
M
TE R
IN O Advantages:
Unlike Nike, lululemon utilizes a multi-level
F
• Employee Empowerment • Higher Adaptability
governance structure that brings together business
• Improved Customer Focus • Better Resource Allocation
leaders across the enterprise to transform the
• Reduced Workload on Top • Geographic Expansion
current social, environmental, and operational status.
Management • Talent Development

A Decentralized Organizational Structure

Source: Lululand Analysis

63
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Human Resources Dive In
Culture, Talents, Organization are All Valuable Resources for Lululemon

N L 23
SE
People Valuable Human Resources

O A M
Super girl That fosters cohesion and

LY U
Culture
learning

RN i
M
Long Term Competitive Advantage

With aligned values and

TE R
Talents
Culture focus on self-improvement
IN OTalents
Long Term Competitive Advantage
Organization
F
Organization Decentralized structure
Product A high-end retail presence Place
Athleisure DTC Temporary Competitive Advantage
Efficient inventory management
with RFID

Source: Lululand Analysis

64
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Value Chain
Where Lies Our Strengths?

N L 23
SE
O A M
Strengths and Weaknesses in Resources

LY U
RN i
Strengths Weaknesses

M
• Widespread and immersive operated

TE R
stores
IN O • Digital management system
• Educators and ambassadors
• Quality control in supply chain
• Insightful customer research
• Inventory management
F
• Patent protection
• Social media
• Culture that fosters cohesion and learning
• Online channels
• Talents with aligned values and focus on
self-improvement

Source: Lululand Analysis

65
LuluLand
 F
IN OProblem Definition
TE R
M
RN i
O A M
N L 23
LY U
SE
LuluLand
Key Issues
Lululemon Should Dynamically Adjust its Intrinsic Resources Seeking for Global Expansion

N L 23
Global Sportswear Market Trend—Slower Growth

SE
O A M
LY U
RN i
M
North America Athleisure Market under Pressure

Global

TE R
Expansion
IN O
F
Lululemon Boosts Long-term Competitive Advantage
• Company operated stores will bring long term competitive advantage
• Educators, ambassadors and social media
• Insightful customer research

How should lululemon leverage its sustainable competitive advantages and

dynamically adjust its intrinsic resources to other markets, taking into account the
slowdown in growth amid fierce competition?
Source: Lululand analysis
67
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 N L 23
SE
O A M
LY U
RN i
M
TE R
IN O
The Global Expansion Strategy
F
for Lululemon

LuluLand
 Discussion 3:
Please provide ratings for lululemon's

N L 23
SE
performance across six dimensions for entering

O A M
LY U
various country (or regional) markets.

RN i
M
Country
Low Consumer • China

TE R
Bargains
5 • Japan
IN O 4 • India
Acceptence of
Lululemon
3 Fitness of
Lululemon Culture
• Africa
2
Products
• Europe
F
1
0
• Middle East
• Latin America
E-Commerce Low
Feasibility Competitiveness

Low Sustainability
Preference
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Chinese Market
Emphasize on Rapid Growth, Differentiation, Localization, Online Marketing and Distribution
Overview of Chinese Market

N L 23
SE
1 Rapidly Growing Market

O A M
Low Consumer
Bargains

LY U
RN i
M
Acceptence of Fitness of
Lululemon Products Lululemon Culture Presence of Numerous New and Established
2
Players with Significant Price Range Variations

TE R
E-Commerce
Feasibility
IN O
F
Low
Competitiveness
3
Chinese Consumers Have More Mature Online
Purchasing Habits

Low Sustainability
Preference
Consumers Seek out Personalised and Tailored
4
Shopping Experiences

Source: Lululand Analysis

70
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Chinese Market
Emphasize on Rapid Growth, Differentiation, Localization, Online Marketing and Distribution
What’s the Chinese Market Like? What Can Lululemon Do?

N L 23
SE
1. Rapidly Growing Market Strategy Corresponding Resource
− The Chinese yoga market is in the mid to late stages of rapid

O A M
development, with the yoga apparel market maintaining a 15% CAGR

LY U
over the past five years.
✓ Suitable for rapid development Leveraging the

RN i
Size of the Chinese yoga market Size of the Chinese yoga apparel
with sufficient resource advantage of offline

M
market
allocation, expanding market store resources
100Bn RMB +17% 100Bn RMB +15%
449
503 132 141 presence
405 387 114
337 85 92
266 71

TE R
199

2016 2017 2018 2019 2020 2021

IN O
2022 2016 2017
2. Presence of Numerous New and Established Players with Significant
F 2018 2019 2020 2021

Leveraging R&D
Price Range Variations resource advantages
Price Range to ensure product
✓ Differentiation strategy,
lululemon 850-1080 Maia Active 399-599 quality
Nike 749-799
positioning in the light luxury
内外 399-599 Leveraging marketing
Adidas 187-529
segment, targeting the middle
暴走的萝莉 98-211 advantages to
Li-Ning 319-399
to high-income group
Under Armour 189-699 maintain user
DESCENTE 890-1090 DECATHLON 129.9-249.9 identification
FILA 380-680

Source: Company website, Qingtouzhiku, The State Administration of Work Safety

71
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Chinese Market
Emphasize on Rapid Growth, Differentiation, Localization, Online Marketing and Distribution
What’s the Chinese Market Like? What Can Lululemon Do?

N L 23
SE
3. Compared to North America, Chinese consumers have more Strategy Corresponding Resource
mature online purchasing habits.

O A M
− The e-commerce penetration rate in China is higher.
− Consumers engaging more with companies and brands through

LY U
social media channels.

RN i
✓ Strengthen the construction of Strengthening online

M
27% E-commerce penetration
online sales network marketing efforts and
19% 19%
12%
15%
10%
13% 14% 13% ✓ Improve online community make localization
7%
management adjustment

TE R
Mainland US UK Southeast Singapore Vietnam Malaysia the Thailand Indonesia
China Asia Philippines

26%: provide feedback on a product or service via a social media post

IN O
22%: like to talk to a company through their social media platform
27%: recently bought something via a social media platform ✓ Provide high-quality offline
F
4. Consumers seek out personalised and tailored shopping experiences store guidance services to Leveraging the
− 80%: want products and services that are uniquely tailored. enhance consumer experience powerful resources of
− 25%: innovative shopping experiences is one of the main reasons they ✓ Make adjustments to products offline store,
shop in store. specifically targeting the Asian ambassadors and R&D
− 23%: getting advice from salespeople is one of the main reasons they market technology
shop in store.

Source: Euromonitor, eMarketer, Zhongtai Securities

72
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Japanese Market
Emphasize on Brand Identification, Consumer’s Shopping Preference and Culture’s Effect
Japanese Market Overview

N L 23
SE
1 Lack of identification with athleisure culture

O A M
Low Consumer
Bargains

LY U
RN i
M
Acceptence of Fitness of Lululemon Japanese consumers have a high purchase power, product
Lululemon Products Culture 2
quality is considered firstly

TE R
E-Commerce
IN O 3
Japanese consumers tend to rely on brand or social media
accounts when they are deciding what to buy
Low Competitiveness
F
Feasibility

Low Sustainability Japanese unique culture may affect consumers’ view to

Preference 4
brand

Source: Euromonitor Voice of the Consumer: Lifestyles Survey fielded January – February 2023
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Japanese Market
Give Play to Advantages of Offline Stores and Ensure Product Quality to Expand Brand Recognition
What’s the Japanese Market Like? What Can Lululemon Do?

N L 23
SE
1. Lack of identification with athleisure culture Strategy Corresponding Resource
− Japanese do not have an exercise habit, and many people exercise less than

O A M
once a month. Athleisure culture may be less attractive to Japanese.
Japanese exercise habit and frequency

LY U
Leveraging the
Run or jog Almost every ✓ Cultivate Japanese’s sports

RN i
day Advantage of Offline

M
Weight lifting/strenght… habits and gives play to the
1-2 times a Store Resources and the
Yoga/tai chi week advantages of offline stores
1-2 times a
powerful influence of
Other individual sports month DTC
Less than once

TE R
Take group fitness classes
a month
Team sports Never
0%
IN O
50% 100%
2. Japanese consumers have a high purchase power, product quality is
F
considered firstly
Like to find bargains 65% go shopping for leisure at Leveraging R&D
least monthly
A minimalist lifestyle and don‘t
✓ Ensure product quality, resource advantages
buy new items unless necessary
Japan
57% say that 'seeing or trying' improve user reputation to ensure product
before purchasing is the reason
Seek private label and low-cost
Global they prefer to buy in store quality
products
58% say they look for good
Avoid going shopping
value when buying clothing and
footwear
0% 20% 40% 60%

Source: Euromonitor Voice of the Consumer: Lifestyles Survey fielded January – February 2023
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Japanese Market
Promote Brand Identity, and Use Community to Strengthen User Maintenance
What’s the Japanese Market Like? What Can Lululemon Do?

N L 23
SE
3. Japanese consumers tend to rely on brand or social media accounts Strategy Corresponding Resource
when they are deciding what to buy

O A M
− Japanese people have high brand loyalty, and lululemon needs to cultivate

LY U
Japanese people's awareness of its brand.
✓ Increase the marketing Leveraging the
• 57%, including 66% of Gen Z engage with brands to influence product

RN i
promotion through multi- advantage of marketing

M
innovation and 51% only buying from brands they trust completely channel integration strategy,
• 28% buy from brands that support social and political issues that are
promotion
enhance people’s awareness
aligned with their values
• 59% prefer branded goods to non-branded alternatives
to the brand
•

TE R
30% say they typically rely on brand or social media accounts when they
are deciding what to buy
IN O
4. Japanese unique culture may affect consumers’ view to brand
F
− Japanese tend to get confused of “R" and “L" in Japanese
pronunciation. Leveraging marketing
✓ Use community which is community promotion
− lululemon has a lot of “L”, and Japanese people can‘t pronounce this
highly related to Japanese advantages to attract
sound. This has deepened the memory of the brand in Japan.
culture to strengthen consumer and maintain
Japanese does not have the distinction between the “R" sound and the “L" consumer maintenance
sound that English has. This is because in Japanese, both of these sounds user identification
are represented as “R" sounds.

Source: Euromonitor Voice of the Consumer: Lifestyles Survey fielded January – February 2023
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India Market
Utilize the Local Yoga Culture to Promote Products Effectively and Refine Membership Benefits

N L 23
Lululemon should:

SE
Yoga culture originated in ancient India
• Leverage the strong yoga community
and has a deep-rooted history in the

O A M
• Utilize offline marketing advantage by
country. It is widely practiced across India

LY U
organizing yoga and meditation
in various settings, including temples,
events.

RN i
homes, schools, and communities.

M
• Collaborate with local yoga studios.

TE R
Low
Consumer
IN O Bargains
Tend to shop more often at stores or websites
where I have a membership or a store credit card Refining membership benefits: Acceptence Fitness of
of Lululemon
F
Lululemo… Culture
Global 25% • Exclusive events
• Personalized discounts E- Low

India 35%
• Loyalty rewards Commerce
Feasibility
Competitive
ness

Low
Sustainabilit
y…

Source: Euromonitor
76
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European Market
Low Brand Awareness and Strong Local Competitor are the Two Main Challenges
1 Brand Awareness Needs to be Strengthened in Europe

N L 23
SE
Brand awareness of lululemon is relatively low in Europe
Low Consumer

O A M
Bargains
48% 15% 3% 3%

LY U
RN i
M
Fitness of Lululemon Acceptence of
Culture Lululemon Products Canada UK France Germany

2 Strong Local Competitor in European Market

TE R
E-Commerce
Feasibility
IN O Low
Competitiveness
• Sweaty Betty is a British retailer specializing in women's
activewear, founded in 1998; Acquired by Wolverine World
Wide in 2021
F
Low Sustainability EMEA
Pricing Stores
Preference Revenue 22
£ 90 $611M 46

£ 85 $170M 50+

Source: Prospectus of lululemon

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European Market
Leverage on its Experience in Operating DTC Stores and Community-based Marketing
Brick-and-mortar Stores Stills Play a Crucial Role Major Competitor Conducts “Digital-First-Strategy”

N L 23
SE
• European consumers value the physical • Julia Straus, CEO of Sweaty Betty, has expressed

O A M
experience of browsing and selecting products in the importance of the "digital-first strategy" at a

LY U
brick-and-mortar stores retail seminar at the Financial Times

RN i
M
Brick-and-mortar stores remain the channel of choices Sweaty Betty invest heavily in online channel

14%
Brick-and-mortar DTC E-commerce

TE R
37%
E-commerce DTC Stores
IN O 19% wholesales
63%
67%
F
1 Leveraging on offline channel advantage 2 Community-based marketing
• Adjust the layout and experience of stores. • Emphasize community interaction and engagement
For example, consider increasing the • Leverage on its marketing ability, out various activities,
number and area of fitting rooms such as yoga classes, fitness workshops

Source: CapitalIQ, Passport research, Lululand Analysis

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European Market
Promote Male Athleisurewear, and Strengthen Customer Research in Europe
Sweaty Betty Focus on Female Market Quality Matters for Consumers

N L 23
SE
• Sweaty Betty is brand offering feminine • 39% says they are willing to pay more for high
activewear with a contemporary technical edge quality apparel and footwear

O A M
• Have a better understanding of European • Generation X and baby boomers are more willing

LY U
customer demand to pay more for higher quality

RN i
M
Empowering Women through Fitness and Beyond Shopping Attitudes by Generation

Would rather buy fewer,

TE R
but higher quality things
IN O
Generation Z Millennials Gneration X Baby boomers
F
1 Promoting male athleisurewear 2 Strengthen customer research resources
• Advertise more on male product like ABC • Launch a knockout product specializing in European
• Offer more flexible marketing avenue like market adjusted by European consumers
promotion in Europe • Raise the quality

Source: Passport research, Lululand Analysis

79
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Middle East Market
Lululemon Can Win Favor with a Strong Brand Image for Women
Considering cultural differences, our targeted markets include United Arab Emirates, Kuwait, Qatar, Oman, and Bahrain

N L 23
Progress in Promoting Gender Equality

SE
• Women's Empowerment: The UAE government has taken significant steps to empower women

O A M
in various sectors, including education, healthcare, and employment. Women in the UAE have
been encouraged to pursue higher education and participate in the workforce

LY U
• Legal Reforms: The UAE has introduced legal reforms to enhance gender equality, include laws

RN i
M
to protect women's rights, prevent discrimination, and address domestic violence. e.g. the
introduction of mandatory maternity leave for working women in the private sector
• Women in Government: The UAE has seen an increase in the participation of women in politics.

TE R
In recent years, women have been appointed to key positions in the government and diplomatic
service, indicating a shift toward more gender-inclusive governance
IN O Strengthening Our Female Brand Image
F
• Partner with local female athletes and influencers who are role
models for women in the region. e.g. lululemon partners with
the fitness trainer Mirna Abdel Sater as ambassador
• Create marketing campaigns that highlight the empowering
message of lululemon's brand and its commitment to
Mirna Abdel Sater supporting women. e.g. lululemon could create a campaign that
features women from all walks of life in the region
Source: Case Materials, Lululand Analysis
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Middle East Market
Lululemon Can Create Unique Experience for Online and Offline Consumers

Physical stores remains strong while e-commerce is booming Collaborating with our partner Majid

N L 23
SE
• E-commerce has seen rapid growth in recent 5 years from 2% to 10% Al Futtaim to lay more offline stores
• Primary concerns hindering online shopping is about product and bring innovative experience to

O A M
conditions and lack of in-store experience online shoppers as well

LY U
• Consumers in Middle East values personalized products or services Shopping mall spaces

RN i
M
and being distinctive much more than those in other regions
Experience in stores
Offline E-Commerce Why prefer click-and-collect operating
Check product conditions 55%

TE R
Unique Consumer Experience
Enjoy shopping in-store 45%
98% 97% 92% 92% 92% IN O
90%
View/test before buying 44% Provide AR try-on for online shoppers and
enable them to video-check their products
F
High delivery costs 31%
8% 8% 9% 10%
2% 3%
Long delivery times 29%
2018 2019 2020 2021 2022 2023

Spiritual beliefs are an important part of life

Like to be distinct from others
Want products and services uniquely tailored
United Arab Emirates Global
Source: Case Materials, Euromonitor, Lululand Analysis
0% 30%
81
60%
LuluLand
Latin America Market
Lululemon Could Incorporate Local Characteristics and Products Diversification in Stores

N L 23
Renovation of New Shops Product Diversification

SE
Q: Which makes you most loyal to a retailer?

O A M
A: A good variety of different products.

LY U
RN i
M
30% 30% 27% 16%

TE R
Mexico Brazil US China
• Latin America’s Gen Z demand ”Latinidad” (Latinness)
IN O • Consumers in Latin America are loyal to retailers
from fashion. that provide variety, instant availability, and
• Store designs employing traditional indigenous recognition.
F
weaves and patterns, and cultural elements such as • These attributes are esteemed far above an easy
the Mexican luchador, are attracting attention. checkout experience or brand value alignment.

1 Enhancing store experience by adding Latinness 2 Put more types of products and show more
characteristics in renovating stores product diversity in display

Source: Passport Research, Lululand Analysis

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 Latin America Market
Lululemon Could Strengthen Online Marketing

N L 23
Global E-commerce Retail Market Mexico's E-commerce Retail Total Mexican Online Shoppers and

SE
Growth Rate in 2022 Sales and Growth Rate Internet Penetration Rate
23%
600 70100 76% 77% 80
70% 72% 63

O A M
528
81% 60 58 70
500 80 51

LY U
429 60
50
400 50
333

RN i
12%
184 4060 37

M
10% 300 40
35% 3040
7%
200 27% 30
6% 23% 20 20
100 20
10 10

TE R
0 00 0
Mexico Brazil US Global China 2019 2020 2021 2022 2019 2020 2021 2022
Low Consumer
Bargains
IN O
F
Acceptence of Fitness of Lululemon
Digital channels continue to
Lululemon Products Culture influence buying behavior 3 Strengthen the construction of
• Social media continues to play online sales networks and
a larger role in how consumers online community
E-Commerce Low discover new offers, products, management
Feasibility Competitiveness
and brands.
Low Sustainability
Preference
Source: Passport Research, Lululand Analysis
83
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Africa Market
Licensed Stores and Discounted Products
Africa China Japan

N L 23
• Lower willingness to high-priced products : Rising costs and

SE
35% 23%
squeezed household budgets are driving growing price 48% 52%
65% 77%
sensitivity among consumers and prompting many to focus

O A M
more on value. 52% of respondents say they intend to

LY U
Increase Visits to Discounted Stores
increase their visits to discount stores in future, while the

RN i
figure is 35% in China and 23% in Japan. In South Africa, 74% I like to find
Africa

M
Low
bargains Consumer
of consumers, including 80% of Gen Z, expect to increase Bargains
their savings over the next 12 months. I like to visit
shopping
• Stronger bargaining power: A study from Euromonitor Acceptence Fitness of

TE R
malls of Lululemon Lululemon
showed that people in South Africa were more likely to find Products Culture
bargains.
IN O
• Preference for offline shopping: Consumers in South Africa South
Africa Low
F
E-Commerce
tend to visit physical stores, such as Total Sports, for their Global Feasibility
Competitiven
ess
sportwear requirements as many like to first try on apparel
or footwear to gauge the fit before making a decision. Low
Sustainability
0% 20%40%60% Preference

Our strategy: 1) Enter the market through licensed stores

2) Sell discounted products at low price to reduce inventory
Source: Euromonitor
84
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 Global Expansion Route 01 02

• Leveraging • Strengthen

N L 23
07
03 Offline Store customer

SE
06
04 Resources research
05 and R&D resources

O A M
resource
01 • Leverage on

LY U
• Leveraging offline
02
·

RN i
marketing and channel

M
make advantage
localization and
adjustment marketing

TE R
03 04 05 06 07

• Leverage on
IN O • Enhancing
• •
F
Collaborate store Entry the
offline stores, • Leverage
with Majid Al experience market
use community
Futtaim to lay • Strengthen through
community • Utilize offline
more offline construction licensed
marketing marketing
stores and of online stores
• Collaborate
bring sales • Sell
• Ensure with local
innovation networks and discounted
product yoga studios
online online products a
quality
community

LuluLand
 N L 23
SE
O A M
LY U
RN i
M
Thank You!
TE R
IN O
Group Lululand
F

86
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 F
IN O
TE R
M
RN i
87
O A M
N L 23
Q&A

LY U
SE
LuluLand
References

N L 23
1. Merriam-Webster. (n.d.). Athleisure. In Merriam-Webster.com dictionary. Retrieved October 17, 2023, from

SE
https://www.merriam-webster.com/dictionary/athleisure
2. U.S. Bureau of Economic Analysis, Personal Consumption Expenditures: Nondurable Goods [PCEND], retrieved

O A M
from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/PCEND, October 16, 2023.

LY U
3. OECD (2023), Consumer confidence index (CCI) (indicator). doi: 10.1787/46434d78-en (Accessed on 17 October

RN i
2023)

M
4. Ahir, H., Bloom, N., & Furceri, D. (2022). The World Uncertainty Index. National Bureau of Economic Research.
5. Growthbox. 12000字解读lululemon: 揭秘疯狂增长背后的底层逻辑. Retrieved October 17, 2023, from
https://www.cbndata.com/information/231684

TE R
6. July 2023, M. D. (n.d.). What makes Lululemon’s supply chain strategy so great? Retail Week. Retrieved October 24,
2023, from https://www.retail-week.com/supply-chain/what-makes-lululemons-supply-chain-strategy-so-
IN O
great/7044155.article
7. Latin America Spotlight: Consumer Research 2022. (n.d.). Retrieved October 24, 2023, from
F
https://blogs.oracle.com/retail/post/latin-america-consumer-research
8. These traditional brands are shifting to a DTC model. Here’s how. | Retail Dive. (n.d.). Retrieved October 24, 2023,
from https://www.retaildive.com/news/these-traditional-brands-are-shifting-to-a-dtc-model-heres-how/607646/
9. 何善敏. (n.d.). 沙特阿拉伯：女性角色的转变. 香港贸易发展局经贸研究. Retrieved October 24, 2023, from
https://research.hktdc.com/sc/article/MzQ1OTIzMjY1
10. 朴谷分享 | 15000字看完lululemon增长攻略-朴谷. (n.d.). Retrieved October 24, 2023, from http://www.pg-
advisory.com/m/view.php?aid=146
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Appendix — Five Forces
For North America Athleisure Market Analysis

N L 23
Threat of New Entrants-Weak

SE
• Brand Loyalty is hard to build for both

O A M
comprehensive and niche brands

LY U
RN i
M
Power of Suppliers-Weak Competitive Rivalry-Strong Power of Buyers-Mid
• Gross margin for upstream
suppliers are around 25%, which • More brands from sportswear • Retailers are earning ~35%

TE R
is lower than the brands and and fashion sectors gross margin, which is
retailers
IN O • Brands are offering similar higher than the upstream
• Matured company adopted products manufacturing’s
F
spreader suppliers distribution

Threat of Substitutes-Strong
• More fashion clothing becomes
the substitutes

Source: Lululand Analysis LuluLand

Appendix — PESTEL
For Global Sportswear Market Analysis

N L 23
Political Economic Sociocultural

SE
• Political pressure on companies • COVID-19 caused a huge impact • Millennials increased health

O A M
to be more socially responsible on economics, GDP growth of consciousness, and made a

LY U
has grown in recent years. major economies are slower. cultural shift in the workplace.
• Geopolitics, like the collision

RN i
• CPI is also getting higher, means • The desire for clothing to be

M
between Russia and Ukraine lower purchasing power of comfortable, even when it's
adds uncertainty to the market. money. supposed to be functional.

TE R
Technological
IN O Environmental Legal
• Higher International trade
F
• Social media user number • Rising environmental protection
skyrocketed with smartphones requires companies to use more restrictions are being brought.
penetration rate increases. sustainable materials and • The restrictions adds cost to the
• These platforms amplified the manufacture in a green way. company and may even prevent
social impact of superstars like • To meet the requirements could companies from acquiring the
Rihanna and Beyoncé. be costly. resources they need.

Source: Lululand Analysis LuluLand

Appendix — VRIO
Where Lies Our Strengths?
Category Resources Value Rarity Imitability Organization

N L 23
SE
Close relationship with suppliers √
Supply
Inventory management √ √

O A M
chain
Global logistics system √

LY U
RN i
Primary Company operated stores √ √ √ √

M
Channels
Activities CRM system √
Educators √ √ √ √

TE R
Marketing Ambassadors √ √ √ √
IN O Social media √
Insightful customer research √ √ √ √
F
R&D Seasonal team √ √
Patent protection √ √ √ √
Supportive Culture that fosters cohesion and
Activities √ √ √ √
learning
Human
Talents with aligned values and growth
Resources √ √ √ √
mindset
Decentralized organizational structure √ LuluLand
Lululand Team Members

N L 23
SE
O A M
LY U
RN i
M
2023211478 2023211479 2023211492 2023211493
郑瀛

TE R
刘辰鹏 潘苏瑜 苟星怡
IN O
F

2023211494 2023211500 2023211502 2023211508

陈龙翀 淡思缘 屈诗雨 马潇涵

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