13 Oct 2016

What Next for Athleisure?

Athleisure describes the trend for wearing your workoutwear all day – taking yoga leggings around town, or wearing trainers in the boardroom.

But this isn’t about wearing scruffy old jogging bottoms on the school run – athleisure is about wearing high-end exercise gear from specialist brands.

Athleisure clothing tends to use the latest fabrics and incorporate sports technology into their apparel. It’s essentially high-performance, luxurious workout wear that’s socially acceptable enough to wear even when you aren’t training. Athleisure brands such as Lululemon, Under Armour, and Sweaty Betty have emerged selling simple items such as leggings and t-shirts with high ticket prices. This is essentially aspirational clothing for fitness fans.

Athleisure has taken the world by storm, with many celebrities embracing the trend. Although dismissed as a fad by some, athleisure brands such as Lululemon have been hotly tipped by the stock market through 2016. Others such as Under Armour are challenging incumbents such as Nike in the crowded global sportswear market.

Lululemon: a trendsetting brand

Womens’ yogawear brand Lululemon, which helped drive the athleisure trend as it was emerging, is now setting its sights on China’s emerging athletics apparel market. Athletic brands such as Nike and Adidas were early entrants into China’s emerging consumer market, where they are now well established. But there’s a sense that China’s consumers may be ready to move onto the next stage of athletic wear.

There’s evidence that Chinese citizens are increasingly interested in getting fit and active. Sales in the fitness industry increased over 80% from 2009 to 2014, according to the China Daily newspaper, with a rise in the number of fitness clubs in the same period. Compared to the US, where sports accounts for around 3% of GDP, it’s an underdeveloped market.

Despite optimism about the yoga market in China, the brand’s taking a slow and cautious approach. Lululemon started testing the market with several test showrooms featuring a small array of clothing, and pop up events such as yoga classes. The idea is to find out if there’s enough demand locally to open a permanent store.

This is a way to test the market without committing to a permanent physical presence, and also allows the brand to experiment with messaging before it commits. It saves on costs and can yield valuable data.

Despite this cautious approach the brand had difficulties finding the right place to locate a permanent store and, like many foreign brands entering China, they also struggled with the supply chain.

Under Armour’s approach

Under Armour has achieved phenomenal success in the US market where it’s overtaken Adidas as America’s second biggest sportswear brand. Although Nike is still ten times bigger than Under Armour, the smaller brand considers itself a serious challenger. It’s made some tech-based acquisitions and works with B-list athletes that it thinks have a bright future. Like Avis Rental Cars, which famously adopted the brilliant marketing slogan ‘we’re number two, so we try harder’, UA capitalises on its underdog status and has made this a core part of its brand strategy.

A predominantly male brand, Under Armour is presently developing its appeal to women and seeking to enter new areas of sportwear such as the tricky golfwear arena (where Nike previously had difficulties). The brand has experienced strong sales overseas, and has aggressive expansion plans throughout South-East Asia. It’s already beaten incumbents of longer standing to capture a good chunk of Japan’s market.

UA already has market presence in China, where it’s battling a well-funded impostor brand. With household expenditure on sportwear on the rise, and an expanding gym culture, it’s a promising market for a growing brand.

It’s also another arena in which UA can challenge its main rivals Nike and Adidas. According to Euromonitor International data, the North American and Asia Pacific markets are the ones offering the biggest expansion prospects in terms of retail value.

Of course, Under Armour isn’t the only athleisure brand to have spotted the potential. It’s also facing competition from Asia’s own brands and from other American rivals such as Lululemon. To succeed in China it needs to develop its brand, moving away from its North American football background to come across as a multi-disciplinary apparel line.

Under Armour is taking a pragmatic approach to localising its campaigns. Because basketball is popular in China and the US, it was able to use the same NBA brand ambassador, Stephen Curry, in a global campaign. Other US sports stars are unknown in Asia, so this approach is not pursued. Instead the brand sponsors local stars such as Malaysian golfer Nicholas Fung, or Filipino volleyball player Gretchen Ho.

After entering China in 2011, Under Armour decided that Chinese consumers took a different approach to working out compared to North American customers. They determined that Chinese customers saw exercise as a punishment, rather than something fulfilling.

The brand decided an immersive brand experience in a flagship Shanghai store would help introduce a new concept of exercise to locals and help articulate the brand values.

Will the Chinese embrace athleisure?

Although athleisure’s been a huge trend in many parts of the West, it doesn’t have universal appeal. You’ll rarely see Parisian women rocking yoga pants anywhere but the gym. Although Chinese consumers may be showing more interest in fitness, it’s unclear whether they’ll proudly sport their activewear anywhere but the gym.

What does seem to be emerging is a trend for wealthier Chinese consumers to spend more on fitness-related items. Sales of sports watches and compression leggings seem to be on the rise – and fitness spending could be replacing some of the spending on luxury goods. With the crackdown on corruption, it’s now less socially acceptable for elite Chinese to be seen sporting expensive items such as luxury clothing. Other slowly emerging trends such as an emphasis on personal fulfilment may also contribute to increasing interest in fitness.

Whilst some fashionistas predict the decline of athleisure clothing worn in every day life, it could be the case that Asia will embrace the trend. What’s clear is that China may be a significant new market for activewear, with much to be gained by brands who can win market share here.



 
 

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