Ruqayyah Snyder
Lululemon, a North American workout-wear giant, has seen success in Australia, its third-biggest market for company-operated stores outside the US and Canada. As of 2016, Lululemon had 25 stores in Australia, making up 7.5% of its company-owned stores globally. The company has invested in its Australian operations to build market share, and its popularity has been driven by changing attitudes towards activewear, with consumers embracing workout gear as everyday clothing. However, recent price increases on the Australian website have sparked discussions among customers, with some expressing concerns about the affordability of Lululemon products in the Australian market.
| Characteristics | Values |
|---|---|
| Lululemon's third-biggest market for company-operated stores outside the US and Canada | Australia |
| Number of stores in Australia | 25 |
| Percentage of Lululemon's company-owned stores in Australia | 7.5% |
| Investment by the parent company in Australian operations | $19.73 million |
| Profit for the 2016 financial year | $6.8 million |
| Number of people employed in Australia | 524 |
| Increase in annual sales | 16% |
| Total sales | $98 million |
| Market share in the Australian fitness and athletic clothing store industry | 5.2% |
| Price increase in 2024 | Yes |
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What You'll Learn
Lululemon price increase in Australia
Lululemon has increased the prices of most of its products in Australia, as observed by frequent shoppers. This price hike has sparked mixed reactions among customers, with some expressing disappointment and others resolving to be more selective in their purchases.
One of the most notable examples of the price increase is the ABC joggers, which have gone up from $129 to $149. Similarly, the Flow Y bra has increased in price from $60 in 2021 to $70, a 30% surge. Other items like the belt bag have also seen a significant jump, now retailing for $59 compared to $45 in 2022.
Customers have expressed their frustration with the price increases, feeling that some products are no longer justifiable purchases, especially when compared to similar items from competing brands like CRZ Yoga, which offer lower prices for comparable quality.
However, despite the price increases, some customers remain loyal to Lululemon for their active and casual wear, acknowledging that they will need to be more conscious and selective in their purchases.
Interestingly, some customers have pointed out that the mid-year sale in Australia might offer some relief from the price hikes, allowing them to obtain Lululemon products at more affordable prices.
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North American giant's investment in Australia
Australia has seen a number of North American retail giants enter the market in recent years, reshaping the landscape and intensifying competition. Here is an overview of some of the notable investments and expansions by these companies in Australia:
Amazon
Amazon, the world's largest e-commerce marketplace, has made significant inroads into Australia. With its strategy of 'cost leadership', Amazon has partnered with popular domestic and international food and grocery brands, such as Carman's, Arnott's, and T2 Tea. Its expanding distribution capabilities have accelerated its growth and heightened competition within the online food and grocery market, challenging traditional retailers like Coles and Woolworths. Amazon's advanced technologies and automated processes allow it to minimise the cost of online retail, giving it a competitive edge.
Alibaba Group
The Chinese retail giant, Alibaba Group, has also expanded its presence in Australia. Led by managing director Maggie Zhou, the company opened its Australia and New Zealand regional headquarters in Melbourne. Alibaba Group aims to build the entire operating infrastructure needed to enable local businesses to expand globally. This includes a long-term strategy to bring Australian brands on board its Tmall sales platforms.
TJK (TK Maxx)
US retail giant TJK made waves in Australia by converting Trade Secret stores into TK Maxx-branded fashion outlets. TJK acquired the Trade Secrets brand in 2015 and began transforming stores into cut-price fashion warehouses. The company targets Australian shoppers who are "extremely savvy and value-oriented," offering a bargain-hunting model not commonly found in the local market.
JD Sports
UK footwear and athleisure brand JD Sports entered the Australian market through a partnership with Rebel Sport founder Hilton Seskin. JD Sports aims to dominate the "sport lifestyle market" in Australia by offering a unique range of athleisure clothing. The initial store in Melbourne saw success, leading to the opening of four additional shopfronts along the east coast.
Kaufland
German hypermarket chain Kaufland announced its entry into the Australian market by purchasing prominent store sites. Its first acquisition was the famous Le Cornu furniture store site in Adelaide for $25 million. Kaufland's expansion has prompted warnings of heightened competition in the supermarkets and discount department store sectors.
The investments and expansions of these North American retail giants in Australia demonstrate their recognition of the country's market potential and their commitment to capturing the hearts and wallets of Australian consumers.
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Lululemon's market share in Australia
Lululemon is a popular brand in Australia, known for its technical athletic apparel, including yoga and activewear. While the brand has a presence in the country, with an official Australian website and physical stores, there are no precise figures available to determine its exact market share. However, some insights can be gleaned from customer discussions and reviews.
In June 2024, Lululemon experienced a price increase in Australia, which sparked discussions among its customers. Some loyal customers expressed their disappointment with the price surge, mentioning specific items that had increased in price, such as the ABC joggers, which rose from $129 to $149. This increase was seen as "totally bizarre," and some customers felt that certain products no longer offered good value for money, especially when compared to similar products from competing brands like CRZ Yoga.
Despite the price increase, some customers continued to appreciate the quality of Lululemon's products, particularly their lined gym shorts, which they found to be superior to those offered by major sports brands. This indicates that Lululemon has a dedicated customer base in Australia that values their unique product offerings.
Lululemon also seems to be running promotional campaigns specifically targeted at the Australian market, such as their mid-year sale in 2024, which may indicate a strategy to boost sales and maintain their market share in the country.
Overall, while the exact market share of Lululemon in Australia is not publicly available, the brand appears to have a dedicated customer base in the country, with customers valuing their product quality, especially in the yoga and activewear categories.
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Lululemon's profit in Australia
Lululemon is a popular athletic apparel brand that has been expanding its product line beyond yoga attire to include apparel for running, cycling, and other athletic activities. The brand has a significant presence in Australia, with a dedicated Australian website and pricing in Australian dollars.
While the company has not disclosed country-specific profit figures for Australia, it is evident that the market plays a crucial role in Lululemon's global success. In the financial year ending January 2024, Lululemon generated approximately 9.6 billion US dollars in revenue worldwide.
The brand's popularity in Australia is reflected in the feedback and discussions among Australian customers on online platforms. Recent price increases on the Australian website have sparked conversations among Australian shoppers, indicating their engagement with the brand and its products.
Lululemon's pricing strategy in Australia has been a topic of discussion among customers. Some have expressed concerns about the increasing prices, with certain items experiencing significant price hikes. For example, the ABC joggers increased in price from $129 to $149, and the Flow Y bra rose to $70, a 30% increase from its 2021 price of $60.
Despite the price increases, many customers continue to value the quality and performance of Lululemon's products, particularly when compared to competing brands in the activewear market. The brand's popularity and customer loyalty suggest that Lululemon has established a strong position in the Australian market, contributing to its global revenue and profitability.
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$39.97
$24.99 $34.99
Lululemon's popularity in Australia despite price
Lululemon, a North American workout-wear giant, has seen success in Australia despite its high prices. In 2016, Australia was Lululemon's third-biggest market for company-operated stores outside the US and Canada. At the time, the company operated 25 stores in Australia, comprising 7.5% of its 335 company-owned stores worldwide.
Lululemon's popularity in Australia is evident through its financial performance in the country. In 2016, Lululemon Athletica Australia turned a $6.8 million profit for the financial year, an improvement on the previous year's $7.2 million loss. This success has been attributed to a favourable exchange rate and the normalisation of workout gear as everyday clothing.
To build its market share in Australia, Lululemon's parent company invested $19.73 million into its Australian operations. This investment paid off, as the company increased its annual sales by 16% to $98 million and employed 524 people in Australia in 2016.
Despite price increases in 2024, Lululemon remains popular in Australia. Some customers have expressed disappointment with the increased prices, especially when compared to similar products from other brands. However, others continue to value the quality and style of Lululemon's products, even if it means paying a premium.
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Frequently asked questions
Yes, Lululemon is popular in Australia. As of 2016, Australia was Lululemon's third-biggest market for company-operated stores outside the US and Canada. At the time, Lululemon had 25 stores in Australia, comprising 7.5% of its 335 company-owned stores.
Lululemon has grown its popularity in Australia by investing in its operations and increasing its market share. In 2016, Lululemon's parent company invested $19.73 million in its Australian operations, which led to a profit of $6.8 million for the 2016 financial year. The company has also benefited from changing attitudes towards activewear in Australia, with consumers becoming more comfortable wearing gym clothing while not exercising.
One challenge Lululemon has faced in Australia is pricing. Some customers have noticed significant price increases on the Australian website and in stores, with some products increasing by 30%. This has led some customers to consider complementary non-Lululemon pieces or switch to competitors like CRZ Yoga.
