In the new cycle of global economic development, Chinese brands expanding into overseas markets is a rare high growth track. Chinese companies and brands striving forward have stirred up a wave of going global. But accompanied by this, the industry's internal competition is becoming increasingly fierce, and the "price war" tactic is appearing more and more frequently in overseas markets.
The retail industry is currently in a good new stage of development. We need to focus on quality, innovation, and products, not on price. "At the" 2024 Global Brand Strategy Upgrade Results Conference, "Ye Guofu, founder, chairman, and CEO of Miniso Group," shouted to industry peers, "Low prices are detrimental to society, enterprises, and consumers. Pursuing low prices blindly is irresponsible to everyone. Without reasonable prices, there is no guarantee of product quality, and without reasonable utilization, enterprise innovation is difficult to continue
It is worth mentioning that one year after upgrading its global brand strategy, Miniso (09896. HK) has delivered a remarkable performance: currently, the company has opened more than 7000 stores in 111 countries and regions worldwide, and has cooperated with over 150 globally renowned IPs. At the press conference that day, Ye Guofu set the flag of "becoming the world's number one IP design retail group" and stated that he will lead 100 Chinese IPs to the world in the next 10 years.
Liu Xiaobin, Vice President and Chief Marketing Officer of Miniso Group, told reporters from Huaxia Times that globalization is Miniso's top-level strategy, and one of its pillars is its IP strategy. Our entire brand's strategic positioning is to differentiate ourselves from other retailers through IP, so IP strategy is also our top-level strategy
Optimistic about China's physical retail industry
The only constant is the change itself.
At present, the Chinese retail market is in a critical period of consumer shift. In the era of user sovereignty, every interaction and transaction experience of consumers is crucial, directly related to their loyalty and purchasing decisions. Therefore, the previous model of simply pursuing rapid growth while ignoring quality and consumer preferences is no longer suitable for the development of enterprises.
"Today's consumers don't just think that Internet e-commerce is the representative of innovation and the times. I think that the future consumption mode is the form of online service offline, with product innovation and consumption experience as the core, quality retail as the root," Ye Guofu told our reporter about his prediction of the future retail industry, "The retail industry is returning, and entity retail has won the market again by relying on quality and experience through continuous innovation and breakthrough."
The current global retail industry is undergoing significant changes, and Chinese retail is facing an unprecedented opportunity to break through. How to create a truly globally competitive and influential world-class retail company in China is precisely the goal that Miniso aims to break through and achieve during this window of opportunity, "said Ye Guofu.
In his view, only by doing a good job in quality retail with disruptive thinking, building a distinctive retail giant that integrates "must choose+optional consumption" and covers "China+global markets", returning to the essence of retail, returning to consumers, and returning to the original intention of serving consumers to pursue a better life, can we create a great brand.
Kou Wei, Vice President and Chief Channel Development Officer of Miniso Group, introduced that Miniso has currently built seven levels of store formats, including MINISO LAND, Potential Energy Store, Theme Store, Flagship/Sub flagship Store, Regular Store, MINISO GO, and Pop up Store. These seven layer store formats will mainly assume two roles based on business opportunities and consumer trends. One is presented in IP scenarios, deepening the positioning of "IP co branded collection stores" in consumer minds; Another type of role is to deeply cultivate category scenarization and continuously strengthen the image of "the preferred brand for consumers at all levels and channels".
Recently, Miniso opened its first global MINISO LAND store in Shanghai. Liu Xiaobin introduced to our reporter that MINISO LAND is a global level store of Miniso, and there are also classifications of national and city level stores within it. Miniso will open 5 to 7 global level stores in the fourth quarter.
Ye Guofu said that Miniso will match different store models according to different commercial districts in each country and region. "We need both image and floor area efficiency. The overall benefits of the seven store models are still very good, whether it is a large store or a small store, they can be accounted for
Zhang Xiaowen, member of the Standing Committee of the Party Committee and Deputy Director of the News Information Center of Xinhua News Agency, stated that in the current complex and ever-changing global economic landscape, Miniso, as an excellent representative of Chinese physical retail enterprises, has upgraded its global brand strategy with "interest consumption", continued to layout offline retail, and its revenue performance has risen against the trend, paving the way for innovative development of Chinese brands with high quality. The strong resilience and vigorous vitality demonstrated by physical retail are vivid reflections of China's economic development.
Don't think about making money right away when going out to sea
The scene in the ancient poem "Struggling to cross, competing to cross, raising a flock of seagulls and herons." is becoming a reality in the tide of Chinese enterprises going global. According to customs statistics, in the first eight months of this year, there were 630000 foreign trade entities with import and export performance in China, an increase of 8.8% year-on-year.
However, Chinese companies rushing out of the sea, swept by the tide of the times, have not had smooth sailing either. For example, new energy vehicle companies have started to lower prices in Southeast Asian countries represented by Thailand; In the field of home appliances, some brands are also approaching their cost limits in price... Nowadays, companies are very competitive when going global, but upon closer inspection, they are actually struggling in some situations where supply exceeds demand, and are attacking the overseas red sea together to make the "red sea" even more popular.
When talking about the layout of globalization, Ye Guofu admitted in an interview with media reporters including Huaxia Times, "Going global is not easy. In addition to entrepreneurs having a global perspective, companies also need to adhere to long-term principles and infinitely tilt resources to do this
Taking Miniso as an example, it has been operating in the US market for seven or eight years and has been in a loss making state until this year when it began to make money. Taking the US market as an example, in the four years since 2019, the unit price of Miniso products in the local market has increased by 93%, and the unit price per customer has increased by 77%. If there is no long termism and the expectation of making money in the short term, one will definitely be disappointed. After landing in overseas markets, with the deep cultivation of the local market, the brand value will also increase, and the unit price and customer price will steadily increase, "said Ye Guofu.
At the end of August this year, Miniso's largest global store opened in Jakarta, Indonesia. On the first day of opening, this 3000 square meter store had 30 cash registers in operation, but even so, the checkout still had to queue for over 3 hours. Unlike their dormancy in the US market, the flagship store of Central Park in Jakarta, Indonesia, achieved a daily sales volume of over 1.18 million yuan on its first day of opening, setting a new record for daily sales of Miniso's global stores. And the Indonesian market was also profitable in the year it was developed.
Therefore, starting with the easy and then the difficult is also a suggestion that Ye Guofu gave to other overseas enterprises. First go to Southeast Asian countries, such as Malaysia, where there are many Chinese people and labor costs are cheap. It is also close to China. If you cannot even do well in Malaysia, I suggest you not globalize. Once Southeast Asia is done well, then go to Europe and America. Don't go to the United States all at once, and then get down and never dare to go abroad again, "he said.
Finally, Ye Guofu believes that truly globalized enterprises still need to "occupy Europe and America". Only by occupying the European and American markets can a brand reach a high level, which is the most important step for an enterprise's internationalization.
The globalization strategy of Miniso can be seen from its semi annual report - in the first half of the year, Miniso's revenue increased by 25% year-on-year to 7.76 billion yuan; The adjusted net profit was 1.24 billion yuan, a year-on-year increase of 17.8%. Among them, overseas business revenue exceeded 2.7 billion yuan, a year-on-year increase of 43%. The direct market in overseas business accounted for 56% of overseas revenue, surpassing the agency market.
Nowadays, 40% of the stores are already located overseas. "In the future, half of Miniso's new stores will come from China, and the other half will be opened overseas. Moreover, the European and North American markets will be its next focus," said Ye Guofu.
From "signing IP" to "creating IP"
The one who obtains IP wins the world. It is not an exaggeration to say that co branded IP products have become the most important driving force for Miniso's overseas expansion, with IP products accounting for 40% of its overseas business.
As early as 2020, Ye Guofu first proposed that "interest consumption" would become the mainstream trend of future consumption, and then the wave of interest consumption swept across the world. IP strategy is an important lever for Miniso to lead interest consumption, injecting strong momentum into its global layout. Miniso has pioneered the innovative business model of "Global IP Joint Collection Store" and is committed to building a new highland in the field of IP design retail. We are deeply exploring the moat city, strengthening our first mover advantage, channel advantage, and scale advantage, and continuously striving to become the world's number one IP design retail group.
Guan Dou Na stated that Miniso has been implementing its IP strategy since 2016 and has collaborated with over 150 globally renowned IPs. Its global IP product sales have exceeded 10 billion yuan, with over 10000 new IP products launched annually and a total of over 800 million IP products sold in history. Miniso is truly a "IP co branding expert".
At this press conference, Miniso announced another major collaboration with the IP "Harry Potter", and the joint product will be launched globally on October 31st across all channels. It is reported that Miniso has released Harry Potter IP co branded products in markets such as Hong Kong, the United States, and Indonesia in October, once again setting sales records.
Ye Guofu believes that the overseas expansion of Miniso has formed differentiation. Specifically, the first is product differentiation. Based on their experience, IP preferences and popularity vary in each country. For example, the European and American markets are very interested in Japanese IP, while Korean IP is more popular in Latin America; Secondly, Miniso has established a local supplier network. For example, in the North American market, a large proportion of products are developed in cooperation with local suppliers, which is more suitable for the consumption characteristics of the local market; The third is the differentiation of marketing, using a large number of local social media and internet celebrities for marketing; The fourth is the differentiation of talents, that is, the localization of employment, especially in the US market, where 99% of employees are employed locally.