Miniso, a Chinese or a Japanese brand?
Miniso, a Chinese or a Japanese brand?. The confusion still looms over in the minds of the customers. However, the news is that the brand has just turned its founder into a Billionaire after the IPO. As per rough estimates, the co-founder Ye Guofu is now valued at around $3.06 billion. The stock which listed on Thursday finished the day up by 4.4%. Ye holds about 65% of the shares in the company and the brand has raised about $608 million in the US market. The company was able to raise such a big amount of money by offering 30.4 million American Depository Shares(ADS). The brand now finds its place on the listing of the New York Stock Exchange.
A chance trip by the founder Ye Guofu to Japan opened his eyes to the retail market of design and design-based products. He soon partnered with a Japanese designer Miyake Junya and started the firm in 2013. The firm is relatively new to the retail design market and yet it seems to have created quite a buzz and a place for itself in the market.
Confusion over Japan and the Chinese angle.
The IPO prospectus points towards the origin of the brand to China. Most of the board members too are from China. Ye Guofu also presents himself as a Chinese entrepreneur. However, the logo and the marketing put out by the company tries to market the brand as a Japanese. In fact, Miniso is being accused often as a brand that copies bigger Japanese brands like Muji and Uniqlo. The products offered are also similar to those of the bigger brands. Miniso lacks any credentials to present itself as a Japanese brand, apart from the very little information about the Japanese co-founder. There is not much association of the brand with Japan. Another fact as per the IPO prospectus, that about 2533 stores are operating alone in China as of June 2020, points fingers towards Miniso being a Chinese brand.
Investor Backing
The company has backing from investors like Tencent and Hillhouse Capital. While Tencent is China’s leading provider of Internet-related products and services. It is the world’s largest online gaming company and also owns Wechat — the nation’s largest social networking platform. With its strong social platform and big data technology, Tencent holds the key to the Chinese digital market. The company has diversified digital products and content. This also helps the firm to have a big hold on online advertising revenue. Tencent has already crossed a market value of more than $500 billion.
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Hillhouse Capital on the other hand is an ace investor with investments of more than $ 50Billion.It is more active in Asia. Hillhouse Capital is considered to be one of the few investment funds, which has been successful in getting an ROI of more than 50% on its investments. The firm is shy in nature and has stayed away from any publicity.
Both the investors have so much expertise to offer to a brand like Miniso. The brand is sure to gain from the guidance from these investors.
Expansion process
The company sells household goods from footwear to small storage cabinets. All the products are priced well and are offered to the customer at a relatively cheaper rate attracting many footfalls. The company has been fast in opening retail stores in many countries. It is In fact, now operating in Europe, North America, South America, Asia, and Africa. The majority of its stores are located in Asia. There are about 4200 stores globally as per the IPO Prospectus. Most of the stores are operated by a third party or a Franchisee model. This model has worked extremely well for the company in its worldwide expansion plan. There are only about 129 company stores in all. Out of which, just 7 are in china and the rest 122 are located across different countries. The company earned a revenue of about $1.4 Billion in 2019 which is outstanding for a 7-year-old company.
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Conclusion
Miniso, although has grabbed the attention of the customer for now and doing fairly well. It has a long way ahead to go and reach the grand old brands like Muji and Uniqlo. Miniso will have to show more and more original products and designs coming out from its stores to capture the imagination of the masses and for attracting more valuable customers. It is also very important to remain true to its origin and brand itself accordingly.
