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Miniso: From a Copycat Store to a Billion-Dollar Company

by Bharat Duggal

Miniso: From a Copycat Store to a Billion-Dollar Company

October 25, 2020

Miniso, a low-cost Chinese retailer that brands itself as a “Japanese-inspired brand,” took the markets by storm when it raised $608 million by selling 30.4 million American depositary shares for $20 each, way above its previously indicated range of $16.5 to $18.50.

Miniso opened its first shop in Guangzhou, China, in 2013, and it has grown dramatically ever since. Its growth has been so rapid that by 2018, it had more than 1,000 overseas outlets. The company is backed by the Chinese tech giant Tencent and other big names and has collectively raised over 1 billion yuan ($152 million) from these investors.

After it went public on the New York Stock Exchange, Miniso’s stock value raised to $24.90 before ending the debut at $20.88. According to Bloomberg, this surge in stock price gave the company a $6.35 billion market valuation.

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It bears a striking similarity to Muji, Uniqlo and dollar store Daiso in many ways, and has been called a copycat of its Japanese lifestyle predecessors.

Miniso: Low-Cost Retailer

Miniso specializes in household and consumer goods such as cosmetics, stationery, toys, and kitchenware and sells low-priced, right quality products. The USP of Miniso is that by cutting out the middlemen and sourcing directly from factories, it offers super cheap household goods. The company’s prospectus claims that 95% of its offerings are priced below $7.1 in China!

“Our biggest competitive edge is [our products’] exceptionally high-cost performance, and frequent launches of new items,” Ye Guo Fu, Founder and CEO, Miniso, mentioned at a ceremony in the company’s headquarters at Guangzhou, China.

With the IPO, the net worth of Miniso’s founder, Ye Guo Fu, jump manifold. Forbes reported that Ye, who is set to own 65% of Miniso following the IPO, currently has a $3.9 billion net worth.

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Chinese entrepreneur Ye Guofu and Japanese designer Miyake Junya in Tokyo in 2013. But its Japanese origin is nowhere to be seen in its IPO prospectus

The Japanese Affair

Miniso’s founder has frequently visited Japan and been inspired by the Japanese low-cost retailer Muji, which gave him the idea of launching a variety-shops chain in China.

The brand has been mocked and criticized as it initially claimed to be a famous Japanese brand, even though it had no outlets in Japan and operated in mainland China under its current holding Chinese company Aiyaya.

While the company brands itself as a ‘Japanese inspired’ brand, people have criticized it for mimicking the logos and business methods of Japanese apparel and variety goods retailers such as Uniqlo, Daiso, and Muji, a claim that the company denies.

“We respect these brands. But we have 11 product categories, which do not overlap theirs at all,” the company says.
It has also been criticized for affixing grammatically incorrect Japanese-language labels to many products, resulting in the use of Baidu Translate to produce Japanese language copy, a claim that the Miniso management admitted.

Chinese media have reported that the company is involved in more than ten intellectual ten property lawsuits. The company also drew harsh criticism after a nail polish sold by it contained a carcinogenic material in concentrations 1400-times higher than the legal limit.

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Over 90% of its outlets are franchise stores, one reason why it’s able to expand rapidly, but the model also means Miniso has limited control over its large network of third-party operators

Expansion Plans

Despite the criticism, Miniso’s expansion has been explosive.

The low-cost retailer is reported to have 4,200 stores globally, including 1,680 overseas stores. While the company is yet to turn profitable, its losses narrowed down to $37 million in the 2020 fiscal year, down 12% from a year ago.

In fact, according to research firm Euromonitor International, the company has won almost 60% market share in China’s general merchandise outlets, excluding the grocery stores. 

Two years after entering India’s mega $670 billion retail industry, the low-cost retailer brand has opened more than 110 stores in 41 Indian cities as of 2019.

It indeed seems like Miniso is driven by the aim and expansion plans of reaching ‘every corner of the world’.

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Vaibhav Bisht November 30, 2020 - 9:20 am

So Why people are buying these products from a Chinese Company ?

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