MINISO has performed remarkably well in 2024.

Despite the overall weakness in terminal demand in China's consumer industry in 2024, the company achieved revenue of 12.281 billion yuan in the first three quarters of the year, a year-on-year increase of 22.8%. The stock price of MINISO (09896) has risen by more than 50% since November 25. This success is not only due to its core strategy of "goods economy" in the IP industry but also its continuous expansion in overseas markets.

【IP Collaboration is the Soul】

On December 31, MINISO announced a partnership with the popular Chinese game "Black Myth: Wukong," becoming its officially authorized partner. The collaboration, themed "MINISO Welcomes the Chosen One," will explore new ways of IP cooperation, with co-branded products expected to launch in 2025.

On December 19, Papergames' mobile game "Love and Deep Space" and MINISO announced the launch of co-branded plush toys, with pop-up events to be held in Shanghai, Beijing, Guangzhou, Shenzhen, and Wuhan.

Since 2016, MINISO has collaborated with over 150 IPs, with global IP product sales exceeding 10 billion yuan. The company launches over 10,000 new IP products annually, with cumulative sales of IP products surpassing 800 million units. On its official website, you can find products featuring globally popular IPs such as "Chiikawa," "Pokemon," "Harry Potter," "Sanrio," "My Little Pony," "Disney," and "Barbie."

MINISO actively seeks diverse IP collaborations globally because its audience is vast. By leveraging IP products to stimulate purchasing power among different IP fans, it drives continuous growth in demand. "Black Myth: Wukong," a globally acclaimed Unreal Engine 5 AAA game, has received widespread praise from gamers worldwide. "Love and Deep Space" targets female anime game fans. Despite the differences in audience preferences, the "goods economy" of peripheral products can encompass them all. MINISO's strategy is to continuously partner with trending IPs, update high-quality IP products, and expand its retail market—similar to Lego's approach. However, unlike Lego, which focuses on building blocks, MINISO's IP products come in various forms, better integrating into consumers' daily lives.

【The Youth Market】

"Goods," a homophone for the English word "goods," refers to merchandise themed around popular culture elements like anime, games, and idols. The primary consumers of the "goods economy" are young people, reflecting their desire for personalized expression and social interaction. They seek not only material satisfaction but also unique consumption experiences that fulfill emotional value. Currently, the "goods economy" has created a market worth hundreds of billions, driven by young consumers.

According to a report by Christina Adams, Kari Alldredge, and Sajal Kohli published in McKinsey, the answer to "Who are the future consumers?" is young people. The report predicts that by 2030, 75% of consumers in emerging markets will be aged 15 to 34. Data shows these consumers are optimistic about the economy and willing to spend. The future of emerging markets belongs to the youth!

【Thriving Overseas Direct Operations】

On December 20, global lifestyle brand MINISO opened its largest store in Spain, marking its first "MINISO Land" store in Europe. Located in Madrid, this flagship store offers an immersive and fun shopping experience, showcasing the brand's IP collaborations in a "theme park" style for the first time in Europe.

As of September 30, 2024, MINISO had 422 overseas directly operated stores, an increase of 220 year-on-year, with 184 new stores opened in the first nine months of 2024 alone. In contrast, TOP TOY and mainland China added only 15 and 3 new stores, respectively, during the same period. Overseas store growth has surpassed domestic growth, with overseas revenue accounting for 37% of total revenue and overseas direct operations contributing 20%.

Third-quarter results show that overseas direct revenue grew 55.4% year-on-year, maintaining high growth, while the agent market grew 26.5%, with a sequential increase of 12.1 percentage points. Overseas direct operations have significantly boosted the company's overall gross margin, contributing 3.9 percentage points to the 3.7 percentage point year-on-year increase in gross margin for the first three quarters.

Goldman Sachs analysts predict that inflation will continue to decline toward the Federal Reserve's 2% target by the end of 2025, with core PCE inflation expected to reach 2.1%. With easing inflationary pressures, consumers' purchasing power will strengthen. As the peak overseas consumption season approaches in Q4 and the heavyweight IP "Harry Potter" launches overseas, MINISO's continued expansion in European and American markets is expected to drive further revenue growth.

【Internal and External Risks】

The most pressing domestic concern is the decline in single-store revenue in China. In 2024, same-store sales growth in China was -2%. Rough estimates indicate that TOP TOY's average single-store revenue in Q3 was approximately 1.27 million yuan, down 16% year-on-year.

This decline is not only due to the high base from the previous year but also intense competition in the "goods economy" sector, with rivals like KKV and The Green Party encroaching on the IP market. In 2025, the Chinese government plans to introduce more policies to boost consumer confidence and spending, which may help revive domestic revenue.

Externally, Trump's potential re-election as U.S. president could pressure Chinese exports. MINISO's rapid overseas growth relies on its product capabilities and supply chain strength. Most of its suppliers are concentrated in the Pearl River Delta and Yangtze River Delta regions, with key manufacturers including Intercos, Givaudan, Baiya, and Sanxiao. This means its thriving overseas direct operations in the U.S. market could face challenges. As of Q3 2024, MINISO had 1,572 stores in Asia (excluding China), 294 in North America, 598 in Latin America, 260 in Europe, and 212 in other regions, with North America accounting for about 10%.

2025 presents both opportunities and risks. With a revitalized consumer market and booming overseas business, MINISO—a retailer with IP collaborations at its core and overseas expansion as its driving force—has the potential to reach new heights.