Stretching limits, sculpting success: Lululemon's rise from controversies to cult status

Lululemon’s ex-CEO Chip Wilson is at it again, with the latest round of scathing and dismissive comments about the athleisure company’s diversity and inclusion efforts. In a recent interview with Forbes, the 68-year-old former CEO remarked the brand’s accessibility would hurt the brand. He said: “They’re trying to become like the Gap, everything to everybody.”

“I think the definition of a brand is that you’re not everything to everybody,” he continued. “You’ve got to be clear that you don’t want certain customers coming in.”

Wilson founded Lululemon in 1998 and stepped away as chief executive in 2013 and as board member in 2015. However, he still owns the majority of the company’s shares, valued at $4 billion, according to Forbes.

This isn’t the first time his regressive values have come to the forefront. Wilson is a lightning rod of controversy with a history of making anti-Asian, sexist, and fatphobic comments that have hurt the brand. In 2013, he caused a public outrage after blaming customer bodies for the wear and tear linked with the yoga wear.

Chip Wilson, founder of Lululemon Athletica Inc., addressing a news conference in Vancouver, Canada, on Sept. 15, 2022. Photo: Getty Images

That firestorm was a distant memory until Wilson topped it up with the latest antics.

Lululemon has quickly distanced itself from its former CEO. In a statement to CNN, Lululemon has said that Wilson does not speak for the company and that his views don’t stand for its values or beliefs. It said it’s a “very different company today” since Wilson left the board in 2015, and that he has not been involved with operations since.

“We also recognise that becoming a more diverse and inclusive organisation takes time and is only possible through the sustained efforts of our leaders and our people,” the spokesperson said.

The current backlash has yet to pan out, but taking a cue from history, Lululemon has been a rare retail beast. Controversies, economic plight notwithstanding, the billion-dollar brand, famed for its appealing, butt-toning $100 leggings, has managed to keep the tills ringing and fan following growing.

The Canadian athleisure brand operates in 25 countries with a retail footprint of over 672 stores. Over the last five years, its shares have skyrocketed, rising nearly 300%. Wellbeing is a buoyant sector—as evidenced by the Lipstick index. So, it’s not surprising that through the turbulent Covid years that crushed most brands in Asia, Lulu managed to thrive. In Q3 2023, the apparel maker posted a 19% surge in revenue, amounting to $2.2 billion.

Riding on the success of both online and offline retail channels, the company aims to quadruple its international business by the end of 2026. In the next five years, they plan to enter four new markets in Asia, starting with Thailand later this year. So, the big question, how does the popular athleisure brand maintain this astronomical growth and popularity in the diverse Asian market even in the face of tight market conditions and controversies galore? Are there actionable insights for other brands here?

Campaign turned to leading experts for a Brand Health Check on Lululemon. Take a read.

Q) Amidst the competitive athletic wear landscape, Lululemon's phenomenal growth stands out. It's rare for a Western brand to crack the China code, record astronimical growth in the face of economic uncertainities, product controversies and buck the retail trends. How has Lululemon managed to do that?

Olivia Plotnick
Founder, Wai Social

As recently as 2015 in China, I remember passing the occasional runner in my neighborhood who would be dressed in jeans and a T-shirt. Today, in what feels like the blink of an eye, athleisurewear is everywhere, and Lululemon is perhaps one of the most remarkable brand success stories in this growing category in China.

The brand's approach is one that I find is rare among foreign brands who enter the China market— a long-term mindset. The team built the brand from the ground up, leveraging community leaders and creating occasions for meaningful engagement which has contributed to an active and loyal community.

Nearly a decade into their China journey, Lululemon continues to foster community through dynamic in-store activities as well as nationwide events, with core community influencers forming the backbone. Beyond fashion, the brand has cultivated a captivating lifestyle, with activities like "Sweat Life” providing users with a profound sense of gain and a form of belief. In contrast to competitors, Lululemon facilitates personal connections with the brand through smaller influencers, like fitness coaches and yoga teachers, aligning with the brand's focus on healthy lifestyles.

Lululemon's robust social media presence, with significant followings on platforms like Weibo, Xiaohongshu, and Douyin, enables meaningful engagement and influence as a natural continuation of their offline events. The brand's dynamic strategy positions it as a leader in the competitive activewear market, showcasing a holistic and effective approach to brand development.
 

Nicky Wang
CEO
We Red Bridge

Lululemon’s rise in the competitive athletic wear market is a story of focused consumer-centricity. Unlike its competitors, Lululemon wasn't fixated on market rivalry. Instead, it focused on understanding consumer needs, and delivering superior quality products that met these needs. This consumer-first approach enabled the cultivation of an authentic community, turning customers into brand evangelists who became the heart of Lululemon's identity.

At We Red Bridge, we played a pivotal role in Lululemon’s entry into the China market by developing and nurturing this very community from scratch. Our strategy involved a scrupulous selection of influencers and members of the media. The meticulousness that went into the selection and recruitment process was more specific and demanding than any industry standard by a mile. Through the process of analysing social posts, engaging in person, and even participating in workouts to assess “brand fit” across multiple criteria, we ensured the selected individuals shared genuine alignment with Lululemon's ethos of an active lifestyle.

Remarkably, Lululemon's China launch was achieved without a dedicated media budget. In a market where paid media investment is the norm, our approach of not compensating media and influencers for reviews or brand endorsements was almost considered a mission impossible. Instead of paying for media placements, Lululemon instead offered unforgettable experiences— getting their communities to do yoga on The Great Wall for example, drawing more individuals into their fold.

This judicious approach in selecting whom to engage with, the conscious decision to distance from pay-to-play practices, and the strong emphasis on creating extraordinary experiences that bonded the communities with the brand, resonated strongly with a group of consumers who shared Lululemon's values and lifestyle.

I vividly recall a Lululemon’s executive’s perspective on market expansion, a point of view I often share with clients aiming to build up their own loyal customer base: ‘We don’t push ourselves into new markets. We aim to understand consumers and get pulled into new markets by offering the right products at the right time.’

Granted, this unique approach requires thorough alignment among all internal and external stakeholders and is not something many brands can afford to take the time to execute. But with a unified vision, and the necessary patience, the market dynamics can naturally unfold.

Haruka Sugihara
Content team co-lead and strategist, UltraSuperNew, Tokyo

It's down to the strategic positioning as a leader in the category with an angle on well-being. They were there at the right time with the right approach. The focus on self-care grew in the pandemic and Lululemon transcended its traditional marketing approach to focus on emotion over product, positioned itself as a catalyst for positive change. This shift helped foster a deep emotional connection with existing customers and tapped into a new, receptive consumer base who now aspire to be part of the positive community of Lululemon. 

In response to the pandemic-driven surge in at-home and outdoor activities, the brand was able to capitalise on its presence in yoga and running, solidifying its status as the go-to brand for any level of active lifestyles. By aligning with evolving consumer preferences, they have successfully navigated economic uncertainties and sustained, even expanded, customer loyalty.

Q: What strategies set them apart, and what actionable insights can other brands glean to fortify their own customer relationships?

Olivia Plotnick
Founder, Wai Social

Product innovation, all-round customer experience and market expansion are the three cornerstones of Lululemon's steady growth.

The brand has an unwavering commitment to producing high-quality, innovative, and beautiful activewear. They have greater pricing power as consumers are less price-sensitive to fashion products. The astonishing speed of new releases and ever-expanding product categories provide a steady stream of topics and materials for online and offline marketing.

Its success in creating a sense of community and nurturing connections beyond the transaction, such as promoting well-being and active lifestyles, has resonated with customers. On Xiaohongshu, the topic #WearLululemonToday has received more than 100 million views and continues to grow.

Every month, a large number of bloggers and ordinary users share their outfits and reviews of new products of the season. At the same time, a solid in-member purchasing system and regular discount activities have also been proven to be the consumption model preferred by consumers in an uncertain economic environment.

In addition, transparent communication about product sourcing, ethical practices and sustainability also helps strengthen Lululemon’s brand integrity. Given the complexity of market development, all brands should flexibly respond to economic changes and changes in consumer preferences and make necessary adjustments to product offerings and strategies.

Haruka Sugihara
Content team co-lead and strategist, UltraSuperNew, Tokyo

Distinguishing itself from competitors, Lululemon's success isn't solely rooted in functionality and quality. While their products maintain a high standard, the brand goes beyond clothing, positioning itself as a lifestyle advocate. Leveraging its association with yoga, Lululemon broadened its appeal to encompass self-care and overall well-being. This strategic approach proved particularly effective in markets like Japan and other parts of Asia, where the focus on well-being is a strong recent trend.

Moreover, Lululemon's alignment with broader social trends, such as the "clean girl" aesthetic, has contributed to its brand success. Beyond communication strategies, their visual appeal engages consumers with an inspirational and holistic perspective. Collaborations with fashion PR and influencers have elevated their status, positioning Lululemon as a high-end brand that extends beyond sportswear to lifestyle, reinforcing brand loyalty through a multifaceted approach.

In conclusion, the combination of being deeply routed in a niche within the activewear industry, communicating beyond product but tapping in on a emotional link that fosters community, whilst growing an audience through relevant PR and influencers has been a successful approach to fortify and grow their customer relationships.