"Small Commodity" Miniso Goes Overseas to Make Money, "Ten Yuan Store" Upgrades its Brand
Time： 2023-05-25 10:25
Miniso's recent financial report shows that overseas business has made a huge contribution. Why did Miniso, which focuses on "small commodities" and "ten yuan stores," choose to go overseas? And how did it manage to thrive in overseas markets?
1. Miniso's latest financial report data is very eye-catching, with a huge contribution from overseas business.
On May 16th, Miniso released its unaudited financial performance report for the third quarter of 2023 (for the three months ending March 31st, 2023), showing its best-ever profit performance. During the reporting period, Miniso's revenue reached 2.95 billion yuan, an increase of 26.2% year-on-year; adjusted net profit was 480 million yuan, an increase of 336% year-on-year; net profit margin increased by 11.7 percentage points compared to the same period last year, reaching 16.4%, a new historical high. So far this year, Miniso's stock price has risen by more than 60%, with a market value of about HKD44 billion.
Miniso has achieved very impressive results overseas after its reputation was damaged and revenue continued to decline in China. The financial report shows that overseas business has made a huge contribution. Miniso's overseas revenue growth rate reached 55% in the first quarter of 2023, greatly making up for the 8.8% decline in domestic revenue. Overseas business showed an earlier recovery trend than domestic business in the financial report. Liu Xiaobin of Miniso said that the US market is one of their key overseas markets that they are optimistic about. They adopt a business model that focuses on agency mode and is supplemented by direct stores and franchise stores. It is expected that the number of stores in the United States will double by the end of the year.
2. Breaking out of the encirclement from internal competition and shedding the label of "ten yuan store" in China to go overseas and gild.
Why did Miniso choose to go overseas?
The first and most important reason is that the domestic market is severely internally competitive and competition for low-priced goods is too fierce. For example, Pinduoduo offers goods with free shipping for a few yuan, and the 1688 website conducts large-scale wholesale clearance sales. All these have caused Miniso, a "ten yuan store," to lose its competitiveness in competition with similar products. Miniso has always focused on the label of "high cost performance," but it seems to have lost its competitive advantage in China.
The second important reason is that Miniso wants to improve its brand grade by going overseas and get rid of the "ten yuan store" label. Miniso's self-introduction on foreign websites is "international lifestyle brand," "likes to give value to small objects and share comfortable things," and "characterized by being away from the pressure of daily life." These expressions all emphasize that "Miniso is not a cheap small commodity ten yuan store," but a Chinese brand with attitude and quality.
3. How did Miniso quickly achieve high returns when it went overseas?
Miniso mainly adopted a strategy of grasping consumer psychology in overseas markets. They have different sales methods and product positioning for consumers in different countries.
In South Korea, Miniso used TV dramas and star effects, such as inserting scenes of protagonists visiting Miniso (Miniso) in Korean dramas, attracting many fans and drama fans to come and check in. In the European market, Miniso directly opened stores next to Galeries Lafayette department store in the fashion center, focusing on high-quality comfortable life goods. In India where spice culture prevails, Miniso entered the market as a light luxury identity selling long-lasting fragrances. In Southeast Asia where sunlight is direct and climate is hot, mainly selling cycling equipment and sunscreen sleeves.
In summary, Miniso adjusts its sales strategy and product positioning flexibly according to consumer psychology and needs in different countries and regions to cater to local market characteristics and culture, thus achieving success in overseas markets.
The competition in China's "small commodity" market is becoming increasingly fierce and commodity prices are generally low. Therefore, in order to get rid of being seen as cheap, low-cost, mainly promoting low prices image, relevant companies might as well choose to go overseas to seek better development opportunities and brand positioning. For detailed content please feel free to contact IAN via private message.