Business / article
Alo and Texas Chicken join foreign brands betting on China market
Los Angeles-based yoga apparel brand Alo and quick-service chain Texas Chicken are among the latest foreign entrants to China, drawn by the country's vast consumer base even as many international companies retreat.
Alo, a premium yoga apparel label and competitor to Lululemon, announced its entry into China on Wednesday via a WeChat post titled “Hello, China”. The brand is known for stylish designs and celebrity endorsements from influencers like Hailey Bieber and Kendall Jenner. Its pricing is comparable to Lululemon, with items such as yoga trousers retailing for HK$1,050 (US$134) online.
The launch comes shortly after an inquiry into Lululemon’s alleged use of harmful apparel chemicals was announced in the US in April by the Texas attorney general, sparking widespread online discussion in China. Alo's debut signals that premium and niche foreign brands still see opportunity in the Chinese market despite stiff competition and a challenging operating environment.
“Broadly, China is still too large and important a market for brands to ignore for long,” said Chloe He, director of Asia-Pacific corporate ratings at Fitch Ratings. “For mass-market brands, the appeal is scale, while for niche or premium brands, China offers a large enough pool of affluent and aspirational consumers to support growth. But that does not mean it is easy to operate here.”
He noted that many foreign brands are exiting or scaling back because growth has slowed, competition from local players is intense, and margins are under pressure. Nevertheless, Texas Chicken, a US-based fast-food chain, is also among those making a bet on China, attracted by the scale of the market.