2023.09.28 10:25
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MINISO begins "upgrading" | Dolphin Research

In its tenth year of establishment, MINISO is poised to become a "super brand".

The 8.9 yuan eyebrow pencil from Miniso has become popular under the title of "assassin of domestic product prices". The 30 yuan aromatherapy and the 8.9 yuan eyebrow pencil have become the latest must-haves for young people.

Thanks to the pursuit of a refined lifestyle by young people and their desire to maximize savings, Miniso has achieved high-speed growth during the global economic downturn with its low-price strategy. The latest financial report data shows that as of June 30th, in the fourth quarter, Miniso Group's revenue reached 3.25 billion yuan for the first time, a year-on-year increase of 40%, and the overall performance reached a new high.

However, Miniso is not satisfied with its low-price positioning, and they are also concerned about the sustainability brought by low-price traffic. Founder Ye Guofu believes that in the complex business world, only super-platform companies, super-tech companies, and super-brand companies can achieve long-term success.

In order to transition from a "low-price brand" to a "super-brand", Miniso has taken a series of measures to upgrade and expand its brand. They actively collaborate with well-known IPs, open super stores, and accelerate expansion overseas.

All of this is to break away from the past "strong retail" genes and not be seen as just a channel, but as a brand with real pricing power.

When Miniso is no longer cheap, will consumers continue to pay for it?

Miniso's "Super-Brand Dream"

In the past decade, the reason why Miniso has been able to achieve such low prices is mainly due to its supply chain advantages.

According to the prospectus, there are thousands of people responsible for product selection in the upstream of the supply chain, and thousands of people responsible for store expansion in the downstream, which makes the feedback on product sales very fast and powerful.

Best-selling products quickly feedback to the headquarters, and after research and analysis, more orders are placed, and the large purchasing volume also receives strong support from upstream manufacturers.

The strong supply chain has given Miniso a cost advantage and has also created a rapid positive feedback loop for its sales, allowing it to grow bigger and bigger.

In 2023, Miniso achieved the best performance in its history, with both revenue and profit exceeding market expectations. And the consumer enthusiasm continues, with strong sales growth in July and August, and many stores setting new records for single-store sales.

Specifically, in July, nearly one-third of the stores set historical sales records, and the GMV of domestic single stores from January to July remained at the same level as before the epidemic in 2019 and the same period in 2021.

In August, the offline sales in China exceeded 1.3 billion yuan, a year-on-year increase of 47.8%. Among more than 3,000 stores, 792 set new records.

However, this is not Miniso's ultimate goal. In its tenth year of establishment, Miniso finally announced its "super-brand dream".

However, for Miniso, which has always regarded "extreme supply chain and strong retail attributes" as its core genes, transitioning to a super-brand is not an easy task.

Although a strong brand power means stronger bargaining power and brand premium, it also requires higher requirements for brand shaping.

The so-called brand power comes from the accumulation of every aspect of the product, from design, selection, sales, after-sales, to advertising promotion. Consumers will give positive or negative impressions based on their experience in each aspect, which ultimately determines the level of brand power. Any shortcomings in any aspect may affect brand building.

"Opening superstores, crazy collaborations with IP, and accelerating overseas expansion" - Miniso is using its own way to break away from the label of "low-price brand" in the past and create a "super brand".

"Superstores" open up the ceiling of single-store performance

Opening superstores is one of the measures for Miniso's brand upgrade.

According to Miniso, only superstores can establish a strong brand impression in the minds of consumers and increase the ceiling of single-store performance.

However, do consumers still recognize Miniso, which is positioned as a low-price brand, when it takes the high-end route with superstores that often represent a better shopping environment, a richer selection of SKUs, and higher average transaction values?

Will high rent increase costs and affect the profitability model of single stores?

In response to market concerns, Miniso stated that although the investment in superstores is about twice that of regular stores, the performance of superstores has been outstanding. The flagship store on Beijing Road in Guangzhou can achieve monthly sales of 5 million RMB, and the flagship store in the United States can achieve sales of 1.3-1.4 million USD.

Superstores have higher average transaction values, larger customer flow, better single-store sales, faster inventory turnover, and shorter investment payback periods.

Jianzhi Research believes that Miniso is working on changing its original low-price positioning, increasing prices, expanding product categories, and the success of the superstore model to some extent validates the effectiveness of this strategy.

It is obvious that Miniso will not directly raise prices in all product categories, and will still ensure a reasonable mix of low-margin products to attract customers.

But undoubtedly, they will start with categories with a large premium space, break through in the direction of high-end, which can not only increase gross profit, but also improve the brand image.

According to the company's disclosure at the performance meeting, IP and interest-based categories with higher gross profit margins will account for about 30% of sales in the future, becoming the key to improving gross profit.

A typical example is the Master Aromatherapy, which used to sell for 39.9 RMB. The Master Fragrance Room series is priced from 79.9 RMB. Although the average transaction value has doubled, compared with similar competing products, the Master series still has a price advantage.

Sales have also exceeded Miniso's expectations. Since its launch at the end of last year, Master Floral Aromatherapy has accumulated revenue of nearly 30 million RMB, and the Master Fragrance Room series has accumulated revenue of nearly 70 million RMB.

(Data source: Official flagship stores of various brands on Tmall, CICC Securities Research Institute)

From collaborating with Sanrio to becoming Sanrio

IP collaborations are also an effective way to attract young consumers. Classic IPs such as Sanrio, Hello Kitty, and Disney provide continuous traffic and sales for the brand.

Moreover, IP products often have higher added value, which helps to break away from the label of low-priced products with serious homogeneity. Back in the day, in order to secure the Marvel IP, Miniso fought tooth and nail for six months. CEO Ye personally went to the Disney headquarters in the US to give a presentation, and even gave the order that anyone who couldn't secure the Marvel IP couldn't return to China.

In July of this year, the Barbie collaboration sold out almost half of its product categories within just five days of its launch. On the day of the Loopy online release, the Miniso mini-program crashed due to overwhelming traffic. The Snoopy collaboration has also seen a continuous increase in brand visibility on social media.

It is evident that Miniso is shifting its focus from cost to product quality and differentiation.

In the first half of the year, sales of Miniso's IP products accounted for approximately 25% of total sales, an increase of 1 percentage point from last year and 10 percentage points from 2019. With collaborations with well-known IPs such as Barbie, Loopy, and Snoopy, IP product sales in August have already exceeded 30%.

Collaborating with mature IPs brings stable customer base and returns, but there is also a risk of being perceived as an "OEM brand" by relying too heavily on external IPs. It is worth noting that Miniso currently only has two self-owned IP series, DUNDUN Chicken and PENPEN Penguin.

In response to this, Miniso told Jianzhi Research that their self-owned IPs are still in the early stages of incubation, and they plan to increase the supply of self-owned IPs in the future.

However, they will not create heavy content like Disney, but rather follow the example of Sanrio, starting as a gift retail store and continuously introducing new characters to become a long-lasting IP with vitality.

From collaborating with Sanrio to becoming Sanrio, that is what Miniso aims to achieve.

Thriving Overseas Beyond Expectations

Some analysts believe that "Pinduoduo" and "Miniso" represent not "downgraded consumption" but the externalization of China's supply chain advantages. Miniso has also proven with actual data that it is doing better overseas than people imagine.

Four months ago, Miniso opened its first Chinese brand store in the prime location of Times Square in the US, achieving a single-day sales record of 550,000 RMB, the highest among all global stores.

This is just a glimpse of Miniso's overseas expansion.

This year, the growth rate of overseas GMV has been rapid, contributing over 40% (compared to 25% in the previous quarter) of operating profit, making it the most outstanding performance. 40% of this comes from Asia, including Southeast Asia and India, while 30% is from North America. Europe and the Middle East account for approximately 10% to 15%.

To become a long-lasting brand, going global is inevitable. The profit margin and gross profit margin are higher overseas. Miniso's goal is to open 5,000 stores in China and 4,000 stores overseas by 2027. Dolphin Research's store count has steadily increased, maintaining a stable market share. This information is sourced from the company's prospectus, announcements, and CICC Securities research.

Contrary to market expectations, Miniso's success in overseas markets does not rely on subsidies, but rather on its supply chain advantages and domestic management dividends.

Taking the United States as an example, as long as basic actions such as stocking and inventory management are done well, it can drive sales growth of over 10%. By the end of last year, the monthly average sales of a single store in the United States exceeded one million yuan, making it the top contributing overseas country in terms of revenue in the first quarter of this year.

Miniso has stated to Dolphin Research that the gross profit margin of its directly operated stores in North America is as high as 60%-70%, making it the future focus of development. Currently, Miniso has around 80 stores in the United States, with a low penetration rate. The goal is to open 1,500 stores in the United States as a single market. The second half of the year will see a peak in store openings, with 350-450 new stores added to overseas markets throughout the year.

Another important significance of the US market is to serve as a demonstration market for other overseas markets. If Miniso can replicate its business model and management experience from China to the United States, it can undoubtedly radiate and promote them to Europe and other regions, enhancing the global market's visibility and reputation.


The trend of "consumption substitution" has brought rapid growth to Miniso, but the company is well aware that a lasting brand cannot rely solely on low prices. Therefore, in its tenth year of establishment, Miniso has announced its "super brand dream".

By opening super-sized stores to expand product categories and increase average transaction value, collaborating with intellectual properties to enhance product added value, and focusing on higher gross profit margin overseas markets, new growth opportunities have been unlocked during the transformation process. A "super brand" that truly has pricing power will gain higher profit margins.

Miniso is striving towards this direction.