Lululemon's fierce competitor enters China

Author | Wang Xiaojuan

Editor | Zhou Zhiyu

Alo Yoga is once again going head-to-head with Lululemon.

Recently, it has been reported that Alo Yoga is preparing to enter the Chinese market and has recruited former Arc'teryx Vice President of Marketing Aurora Liu to lead the China team. Additionally, Alo Yoga has begun site selection work in locations such as Shanghai Jing'an Kerry Center, with its first offline store set to open in 2025.

For many Chinese middle-class girls who enjoy yoga apparel but are not particularly enthusiastic about Lululemon, they will no longer need to rely on purchasing through agents. For Lululemon, however, retaining its current growth driver in the Chinese market has become more challenging.

According to Lululemon's latest third-quarter financial report, the company's global net revenue reached $2.4 billion, achieving a 9% year-on-year growth, while net revenue in the Chinese market reached $318 million, a nearly 40% year-on-year increase.

This performance demonstrates that Lululemon is still highly favored by China's middle class, but it also shows other competitors the ongoing potential of the Chinese yoga apparel market, with Alo Yoga as a challenger already on the way.

Previously, Lululemon's Executive Vice President of International Business André Maestrini stated, "By fiscal year 2026, mainland China is expected to become Lululemon's second-largest market globally."

With Alo Yoga entering the Chinese market, there are more doubts about Lululemon's ability to achieve this goal.

Like its competitor Lululemon, Alo Yoga also originated in North America. It is a younger brand, founded in 2007, and initially followed a niche route, only beginning to expand significantly in recent years.

It is hard not to think that Alo Yoga's current expansion strategy has been stimulated by Lululemon. Over the past decade, Lululemon has firmly held a dominant position in the activewear industry, even surpassing Adidas in market value at one point in 2022.

Alo Yoga began its expansion phase in recent years. From 2020 to 2022, its annual sales surged from approximately $200 million to $1 billion. Interestingly, in the U.S., many Alo Yoga stores are located within 0.5 miles of Lululemon stores.

It has been proven that Alo Yoga's offensive is indeed rapid and is replacing Lululemon in the wardrobes of affluent women in North America.

In the North American market, according to credit card data from Earnest, during the 2023 Black Friday period, consumers who originally purchased Lululemon began spending on Vuori and Alo Yoga, with a staggering 63% overlap between Alo Yoga consumers and Lululemon consumers. Consequently, Lululemon's comparable sales in North America declined by 2% in the third quarter This is not difficult to understand, after all, for the middle class, fresher and more niche brands are always more attractive to them, and this consumption trend is more favorable for the newer Alo Yoga.

In terms of brand positioning, Lululemon focuses on the highly educated and elite "super girl," emphasizing professional yoga practice; while Alo Yoga targets the Gen Z "IT girl," emphasizing becoming younger and more fashionable everyday wear. In comparison, it is clear that the latter has a broader applicability.

Currently, Alo Yoga has nearly a hundred stores in over 10 countries worldwide. Although it cannot yet compare with Lululemon, its stores have been growing at a rate of almost one new opening per week over the past year.

In recent years, it has begun to aggressively enter the Asian market, opening stores in Thailand, Indonesia, and other places. It is even set to open its first flagship store in South Korea's Island Park in the second quarter of next year, expected to be nearly 600 square meters and six stories tall. Additionally, in terms of spokesperson selection, it tends to favor Asian public figures, such as BLACKPINK's Jisoo and BTS member Jin.

Entering the Chinese market seems to be only a matter of time for Alo Yoga.

With Lululemon already proving the potential of the Chinese market, Alo Yoga certainly wants to get a share of the pie, and it already has a large audience base in the country.

Currently, many young women are sharing their experiences of purchasing Alo Yoga products on social media. Among them, content tagged with "alo" on Xiaohongshu has garnered over 45 million views. During the Double Eleven shopping festival, a store named "ALO Flagship Store" became the tenth on this year's Tmall Outdoor Sports Double 11 new merchant transaction list.

As a newcomer, Alo Yoga will also face a series of challenges.

The first is in terms of channels. According to its official website, Lululemon has 162 stores in mainland China (including duty-free and pop-up stores), and many of these stores have penetrated deeper into the market. Alo Yoga's store expansion will take a considerable amount of time, making it difficult to compete with Lululemon in the short term.

Additionally, long-standing issues such as counterfeiting and alternative products that have troubled Lululemon will also need to be faced by Alo Yoga.

For example, the aforementioned "ALO Flagship Store" is not an officially authorized Alo Yoga store, and the customer service is evasive regarding the authenticity of the products. The products in this store are quite similar to those on Alo Yoga's global website, but the price differences are significant.

Similar stores can also be found on mainstream e-commerce platforms besides Tmall. This means that Alo Yoga's first battle after entering is not against Lululemon, but rather a struggle with "impostors." After all, some consumers who have purchased counterfeit products have started to avoid risks; others have remarked, "If Alo doesn't take action soon, it will be tarnished by counterfeits before it even arrives."

However, the stories of these trendy brands seem to be quite similar Starting from a niche track, then collaborating with influencers to showcase a fashionable and healthy lifestyle; rapidly gaining popularity, experiencing a surge in performance, and achieving success in the capital market; followed by entering the mass market, where brand performance growth enters a plateau, and middle-class young women no longer enthusiastically support the brand due to its mainstream nature, leading them to seek the next brand that can satisfy their craving for novelty.

In the long run, consumers are rational. Whether a brand can maintain long-term success mainly depends on its ability to continuously provide fresh products that meet the changing needs of consumers.

Whether it's Alo Yoga or Lululemon, the upcoming competition in the Chinese market will require them to offer products that satisfy the needs of Chinese consumers.

As the new year approaches, the battle in the yoga apparel sector has already ignited