The big bull stock of Nasdaq is lululemon, a company that started from yoga clothes. During this period, it also went through some difficult periods, and finally proved its competitive advantage with strong performance growth.
This time, the research team will show you how this company has grown from a small company with a market value of several hundred million dollars to an industry giant with a market value of 40 billion dollars.
Source | There is a good way to study value.
Text | Research Value Group Tao Editor | Arti
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Lululemon was founded by marketing genius Dennis J. Wilson in Vancouver, Canada on 1998. This company started from women's yoga pants. At first, it was just a design studio, which was used for design during the day and operated a yoga studio at night.
In June 2000, lululemon opened its first physical store in Vancouver.
200 1 start selling yoga clothes at the beginning of the year;
Entering the American market in 2003;
Listed on Nasdaq Stock Exchange in 2007;
In 20 19, the operating income reached $3.979 billion.
The company started with women's wear and has always been the core of its business, accounting for more than 70%. Men's wear business is growing rapidly. In fiscal year 20 19, men's wear revenue was 930 million USD, accounting for 23.5%, up 34.4% year-on-year. The company's products also include a small number of accessories, such as bags, headdresses, scarves and socks.
In addition, the company has been trying to innovate product categories, launched a series of new personal care products in fiscal year 20 19, and tested the footwear market.
Lululmon started from the subdivision of yoga, avoiding the competition with industry giants. Most importantly, the company's products have both scientific and technological attributes and fashion, and excellent quality makes them extremely competitive.
Take Lululemon's Align series yoga pants as an example. Using sweat-wicking, dry and elastic Nulu fabric and Lycra spandex with good ductility and difficult deformation, the fabric feels bare and skin-friendly. At the same time, a hidden pocket is designed at the waist, and a narrow waist version specially designed for Asian body shape is adopted to visually lengthen the legs and achieve the shaping effect.
In terms of scientific and technological attributes, exclusive fabrics combined with advanced technology can meet consumers' demands for sports performance. In terms of fabrics, the company cooperates with leading fabric suppliers to develop proprietary fabrics, including Everlux, Nulu and Nulux, focusing on quick drying. In addition, the company also cooperates with testing companies to test the wear resistance and color fastness of fabrics. In terms of technology and design, the technologies adopted by Lululemon include ergonomic design, seamless technology and deodorization technology. Many advanced technologies enjoy patent rights and build technical barriers.
In terms of fashion attributes, Lululemon is different from traditional sportswear brands in that it pays great attention to both functionality and aesthetic details of products. For example, yoga pants, the company used jacquard design to change the problem of single color of sweatpants, and incorporated various colors and patterns, which made its use scene not only in the gym, but also attracted the attention of many girls who did not practice yoga. For example, the bag product, the company hopes that it will become something that women want to bring from the gym to the office, not just a traditional fitness bag that pays attention to function but ignores beauty.
The company's industry belongs to the global sportswear industry. This industry has been a situation of two super players and many strong players for nearly 20 years. The operating income of Nike and Adidas far exceeds that of their peers. In 20 19, Nike's revenue was $39 1 billion, and Adidas' revenue was $26.4 billion. After other companies reach a certain scale, they will face fierce competition from industry giants.
Since the listing of lululemon in 2007, there has been no year-on-year decline in revenue, and the operating income has increased steadily. The revenue from 20 19 reached 3.979 billion USD, with a compound annual growth rate of 24.9%. In terms of net profit, the company was only $3 1 10,000 in 2007 and reached $646 million in 20 19, with a compound annual growth rate of 28.8%.
From 2007 to 20 19, the company's operating income maintained growth.
The sales market is also expanding. Lululemon started in Canada and its main business is in China. It entered the American market in 2003, and its related businesses developed rapidly. 20 1 1 The annual income exceeds that of Canada. Since then, the largest source of the company's income is the United States, and the income in the United States in 20 19 was $2.85 billion, accounting for 765,438+. In recent years, the company has paid more attention to overseas markets, especially the Asia-Pacific and European markets, and its revenue share has been increasing.
20 1 1 America's income exceeds Canada's.
Lululemon can achieve excellent business performance in the fierce market competition, which is closely related to the company's special marketing model, except that the company starts from subdivided fields and its products are both scientific and fashionable.
According to the traditional marketing strategy, enterprises should follow the step-by-step principle of "establishing popularity-establishing reputation-cultivating loyalty". Both Nike and Adidas adopt this strategy, but Lululemon does the opposite. It first seeks some people to cultivate initial loyalty, on this basis, it enlarges brand awareness through stars, then forms brand reputation through word-of-mouth communication of ordinary consumers, and finally realizes product purchase through community marketing.
In terms of community training, the company accurately locates the surrounding potential consumers through image ambassadors scattered around the world. Different from the traditional marketing methods of advertising and celebrity endorsement in the clothing industry, the company has more than a thousand image ambassadors around the world, including global ambassadors and community ambassadors. Most of these ambassadors are athletes, yogis, trainers and musicians. Their life style is inspiring and has great appeal, bringing a large number of potential consumers to the company.
In terms of social marketing, in the early days when the brand penetrated into the target area, Lululemon often opened a showroom, which was dedicated to communicating with customers, carrying out various activities, offering yoga classes and selling themed products.
For example, before opening its first community store in China on October 6th, the company had opened three exhibition halls in Shanghai and Beijing respectively. This slow and steady way makes Lululemon often have a good customer base before entering this market.
When the local demand signal is strong enough, the company will invest to grow into a fully mature store and build a community operation with the store as the core: brand ambassadors at all levels and store teams will work together to connect online social networks with offline store activities through store activities and establish a community-based marketing model. They will improve some movements in yoga, fitness, running, dancing and other sports to make group activities suitable for people to participate in, and then promote activities around stores or communities to attract potential customers in line with brand tonality.
Sportswear is the best track in the whole clothing industry. Compared with other sub-industries, this sub-industry has a faster growth rate and higher market concentration. Therefore, this industry is prone to large-cap enterprises.
Exercise is one of the eternal themes of human beings, and health, strength and beauty are the universal pursuits of people. In the future, with the sustained development of social economy, people will pay more attention to preventing diseases from aging and maintaining a healthy figure through sports, and human consumption capacity and demand will continue to increase, especially in emerging markets. In the future, the sports penetration rate will increase rapidly, and the faster growth rate will bring strong kinetic energy to the whole industry.
At present, the sportswear industry has emerged as a global giant. Nike and Adidas already have strong competitive advantages in all aspects, including strong brand power, perfect product lines, global market channels and supply chains. This comprehensive strength has formed competitiveness in all aspects, which is difficult for latecomers to surpass. If they want to continue to grow, they need to find another way to create a brand-new consumer brand. After experiencing high-speed growth, Andema finally stagnated under the fierce competition of the two giants, although there are also problems that its own speed is too fast, which leads to low operational efficiency.
Lululemon can maintain the steady growth of revenue. After the company experienced a continuous downturn of 20 13 to 20 17, it returned to the stage of high profit growth, which is closely related to the rapid development of the company in unique segments and relying on different growth paths. The company chose the market segment of women's yoga clothes, paying attention to professionalism and fashion sense, starting from the community of waist leaders, and gradually building a community marketing model to forge a unique competitive advantage.
At present, the company is in the growth stage, and all aspects need to be continuously improved. In strengthening brand building, while emphasizing functionality, we should attach factors such as trend, emotion and attitude towards life to the brand; In improving product categories, we will continue to promote men's products and try new product lines, including other sportswear, sports shoes and personal care. In terms of opening up market channels, while stabilizing the North American market, we will continue to strengthen continuous investment in overseas markets and continue to maintain the development of online e-commerce business. The company still has a long way to go in the future, which of course means there is still a lot of room.
If you want to grow up with this company and enjoy the benefits brought by high-quality enterprises, the difficulty lies in whether you can realize that although this company often has crises, its unique competitive advantage enables its scale to grow steadily. Once we get out of the crisis and straighten out the business rhythm, there will be a cash-out period.