In March this year, it was revealed that Muji's accounts in the UK had been in arrears for more than six months, accumulating 15 million pounds in arrears, and the group announced that it would restructure the company.
Coincidentally, the UK branch of the cosmetics and skincare brand Body Shop also went into receivership in February this year, announcing that it would close nearly half of its 198 stores in the UK.
British fashion brand Ted Baker also went into receivership across Europe in March due to debt and a difficult retail environment.
The most serious is the European home and houseware chain Wilko, whose bankruptcy in 2023 led to the closure of 400 of its stores, and almost all of its 12,500 employees were laid off.
Looking at the world, sluggish consumption and unsalable FMCG retail products have become a common phenomenon.
At a time when consumers' pockets around the world are tightening, a Chinese FMCG retailer is bucking the trend.
In the financial reporting period of 2023, the total revenue of MINISO reached 13.8 billion yuan, a year-on-year increase of nearly 40%, and the adjusted net profit was about 2.36 billion yuan, a year-on-year increase of nearly 110%.
On May 14, 2024, MINISO Group announced its financial results for the first quarter of 2024.
In the quarter, MINISO's revenue remained stable and rising, with both a gross profit margin of 43.4% and a net new store of 217, both higher than global brands such as MUJI.
As of March 31, 2024, the number of MINISO stores worldwide has reached 6,630, including 4,034 domestic stores and 2,596 overseas stores.
How did a brand that started in an underground garage get a global cool script?
Ye Guofu, the founder of MINISO, is a native of Danjiangkou, Hubei Province, who went south to Guangzhou as early as the age of 19, starting from reselling clothing, accessories and cosmetics, and gradually became a well-known chain FMCG store owner in Guangzhou.
In 2013, Ye Guofu, who had a certain amount of capital and experience, began to set up MINISO, which mainly sells household products for about 10 yuan.
Although the goods are not very tall, Ye Guofu grasped the consumption pain points of the Chinese - at that time, the quality of domestic small goods was uneven, and the image of Japanese Seiko quality was deeply rooted in the hearts of Chinese people.
MINISO has gained a lot of attention by imitating the positioning of Japanese FMCG stores.
Of course, brand marketing is not the key to MINISO getting out of the circle, and MINISO's management model also leads many FMCG brands.
Ye Guofu designed a set of "quasi-direct sales model" for MINISO - as long as the franchisee gives money to the storefront, the headquarters is responsible for other decoration, purchase, and store manager appointment.
This model is similar to the five-star hotel franchise model, which is to hand over the brand and management to the headquarters, the model is relatively simple, and it is easy to open a store.
Because of the precise positioning and the friendliness of the franchise model, MINISO has attracted investment from Tencent, Hillhouse and other capitals.
Compared with other competitors, Ye Guofu has a very broad vision, and after multiple rounds of financing, he is not satisfied with the status quo.
Instead, he frequently went overseas for investigations, and identified that Chinese FMCG brands have a lot to do overseas.
In 2023, MINISO will open a global flagship store in Times Square, New York, USA, breaking the embarrassment of Chinese brands entering Times Square.
In recent years, MINISO has continued to expand overseas, and its speed is no slower than that of the Chinese market.
Consumers around the world like cheap and easy-to-use cost-effective products, compared with European and American brands, MINISO has a low price and reasonable quality, which is welcomed by Bao Ma and Bao Dad.
In contrast, Japan's Muji has been overshadowed, with its U.S. branch filing for bankruptcy protection and many offline stores forced to close.
To succeed overseas, the first priority is to promote your brand.
As a Chinese brand, MINISO does not have the accumulation of IP image, and the core of its development is to grasp the essence of consumers' demand for daily necessities.
The design and packaging of its products give people a sense of "high quality" of well-designed, and at the same time conform to the modern people's pursuit of simple, high-quality, and environmentally friendly lifestyle.
Moreover, the product iteration of MINISO is very fast, typical of which are aromatherapy, blind boxes, and dolls, which will be constantly adjusted according to market popularity and user preferences.
Another starting point is to carry out extensive IP linkage.
By the end of 2023, MINISO has reached in-depth cooperation with more than 80 well-known IPs around the world, such as Forbidden City Culture, Disney, Marvel, NBA, Jurassic, Barbie, etc., to spread its own brand image with the mainstream IP boom.
Take "Barbie" as an example, with the popularity of the film, MINISO joined hands with Barbie IP in time to launch more than 120 new co-branded products in China and the United States at the same time, and after they were put on the shelves in major stores in the United States, they were quickly sold out, and the sell-out rate reached an astonishing 70%.
The second trick of MINISO's overseas success is the business model.
When developing overseas, many costs are beyond imagination, such as supply chain, manpower, store rent, etc.
Without a high-yield business model, it is impossible to survive overseas.
Compared with the traditional retail giant Wal-Mart, MINISO's gross profit margin has been maintained at more than 40% for a long time, more than 20% higher than Wal-Mart, and more than 5% higher than the traditional retail format.
Excellent cost control comes from the construction of the supply chain.
By cooperating with international brands, we can jointly develop products and buy out the copyrights, strengthen the efficiency of the supply chain, and let the same quality goods be sold at lower prices.
In other words, MINISO is the Pinduoduo of offline FMCG retail.
There are many types, cost-effective, and the masses like to see it.
In recent years, the mainstream of the market is sinking, and MINISO is making great progress overseas by virtue of this.
The founder Ye Guofu's wealth has reached 34 billion yuan, becoming the fastest-growing entrepreneur on the 2024 Hurun Global Rich List, and entering the top ten richest people in Guangzhou at the same time as Xu Yangtian, the founder of SHEIN.
The story of MINISO is particularly meaningful today.
In the case of limited domestic growth, Chinese chain brands must explore the second growth curve of overseas business as soon as possible.
The reason why MINISO has such good financial data is not because of the increase in the domestic market, but because the number of overseas stores has accounted for 40% of the total number of stores.
MINISO's revenue in overseas markets also accounted for more than 40% of the total revenue.
On the contrary, the domestic market grew by a single-digit year-on-year period.
At present, MINISO will continue and even increase its overseas layout, especially in the United States and Canada, where consumption power is strong.
Ye Guofu once said that the average monthly sales of MINISO's U.S. direct stores are 500,000 US dollars, and the gross profit margin is far more than 50%.
He also revealed that the ASP (average selling price) in the Chinese market is 35 yuan, but in European countries and the United States, this figure is three times or even higher than that of China.
Of course, MINISO's overseas expansion is not without challenges.
On the one hand, European and American brands are also smart and have begun to learn to reduce prices.
On the other hand, most of its own IP products are dependent on others, and there is a lack of its own IP like Pop Mart.
In the past three years, MINISO has spent 140 million yuan just to purchase the copyright fee of IP licensing, and the cost of sales has surged.
In order to cultivate the minds of foreign consumers, MINISO must come up with its own originality in order to become a world-class brand.