China sports boom drives Lululemon, Nike revenue growth

What happened Sportswear brands Lululemon and Nike have had a promising start to 2024. Both athleisure firms have been well-received in China over the last few months. Earlier this month, Lululemon announced a global net revenue of $9.6 billion for the fiscal year 2023 — representing a 19 percent rise year-on-year. With a keen interest in growing its presence and offerings in the China market, the Canadian yoga wear retailer reported net revenue of $963.76 million in the region — marking a staggering 67 percent increase year-on-year. Meanwhile, Nike saw revenue of $12.4 billion in the first quarter of the 2024 fiscal year. While overall net profit decreased by 5 percent, the American sportswear retailer cited a 6 percent increase year-on-year in the Greater China region, with revenue reaching $2.08 billion. The Jing Take Chinese consumers continue to jump aboard new sports and wellness trends. As we recently reported, China’s General Administration of Sport projects that the total value of the outdoor sports industry will exceed 3 trillion RMB (approximately $410.8 billion) by 2025. By the end of 2021, there were already over 400 million participants in outdoor sports nationwide. Much of this is thanks to China’s Gen Z. Data from the Chinese travel platform Mafengwo indicates that 85.6 percent of outdoor sports aficionados in 2022 were millennials and Gen Z. Brands like Lululemon and Nike have successfully catered to this demand via a blend of local activations as well as celebrity associations. Ahead of the 2024 Lunar New Year, Lululemon released “Be Spring,” a short film inspired by the Year of the Dragon. The movie explored the concepts of seeking “eternal spring” and well-being from an Eastern spiritual and cultural standpoint. The Canadian athleisure firm, which operates 127 stores in China, also collaborated with the dancers and artistic team of the Shenzhen dance drama, “Wing Chun,” to bring these ideas to life. Academy Award winner Michelle Yeoh was the face of the campaign. Earlier in March, the American sportswear giant launched a Y2K-styled campaign to promote its retro Zoom Vomero 5 running shoes. Lin Yuwei and actor Jin Shijia starred in the videos, which featured the tagline: “Whatever makes you comfortable.” The campaign has reached 1.94 million views on Weibo. Tapping into consumers’ sports aspirations can be a powerful connector for brands looking to grow in the Chinese market. However, they must also be aware of cultural quirks, Gen Z preferences, and the significance of creating emotional connections with younger consumers through compelling narratives and shared values. The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

China sports boom drives Lululemon, Nike revenue growth

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Published March 26, 2024

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China sports boom drives Lululemon, Nike revenue growth