MINISO is on the hot search again. On April 19, “MINISO was accused of copying by a designer” appeared on Sina Weibo’s hot search, arousing heated discussions in China.
The designer @李栋00 reported on Weibo that the pattern he designed last year was used by MINISO on a hat product, but without the designer’s permission. He stated that the copyright of this pattern belongs to him alone and has not been authorized to any brand. That night, Li Dong posted two more microblogs saying that it was purely a beautiful misunderstanding. He thanked MINISO for its handling attitude, and said that he had reached a cooperation with MINISO.
As a Chinese entity retail chain company, the development process of MINISO has always been accompanied by various problems, including questioned product quality and suspected plagiarism in design.
Even so, seven years after its founding, MINISO went IPO in the United States.
On the evening of October 15, 2020, Beijing time, MINISO was officially listed on the New York Stock Exchange under the code MNSO. The issue price was US$20 per share, which was higher than the upper limit of the previous issuance range. A total of 30.4 million ADS shares were issued ( American Depositary Shares). According to a reporter from the Beijing News, MINISO once rose sharply by more than 20% after the first day of listing. The day closed at US$20.88, an increase of 4.40%, staying above the issue price, with a total market value of US$6.347 billion.
There have been rumors in the market about MINISO’s IPO. In 2019, it was reported that MINISO might conduct an IPO in Hong Kong or the United States. At that time, MINISO stated that the IPO planned by the company on January 15, 2018 was steadily advancing, and the company was making all-round preparations for listing.
When the prospectus was unveiled, MINISO’s business model and specific data were at a glance. Since the first flagship store opened in Guangzhou in 2013, MINISO’s stores have covered more than 80 countries and regions in the world in 7 years, with more than 4,200 store data, of which third-party stores accounted for 96.9%.
Last year, the IPO of MINISO was just around the corner, and MINISO was still on the market. A nail polish that it represented was reported to be more than 1,400 times more carcinogenic, which also caused many concerns.
Repeatedly “plagiarism scandals” and quality disturbances
MINISO has always been in the whirlpool of product quality being questioned and designs suspected of plagiarism.
In the previous prospectus, MINISO specifically mentioned the previously controversial NOME business. The prospectus shows that in May 2019, the board of directors of MINISO approved a plan to dispose of NOME business, Minihome business, MINISO Africa business and MINISO Germany business within one year. These businesses have been included in discontinued businesses in the fiscal year 2020.
Previously, in March 2018, the Nomi brand sued MINISO for infringement of the NOME household trademark. Nomi’s founder Chen Hao said that Ye Guofu rushed to register Nomi’s trademark rights. But Ye Guofu said to the outside world: “Most of Nomi’s original team came out of us, and the issue of trade secrets is involved. The two sides are in a lawsuit. This matter is very complicated.”
According to media reports, in November 2018, Shen Wenjiao, the founder of Chinese furniture brand PIY, issued an article “Elephants never sit on the floor!” An Open Letter to Mr. Ye Guofu, stating that the MiniHome brand of MINISO copied PIY’s NUDE coat rack. Ye Guofu said that the other party was a hype, “The hanger they mentioned has been available abroad for a long time. This is a touch porcelain marketing, and we don’t want to respond more.”
From January to March 2020, MINISO entered into a share purchase agreement and agreed to sell all its shares in Minihome Business and NOME Business to several companies owned by Ye Guofu. As of the date of publication of the prospectus, almost all NOME stores under MINISO have been closed, and the remaining few stores (no longer operating under the NOME brand) were expected to be closed at the end of October 2020.
In addition, MINISO is also facing product quality issues. On September 23 this year, the Shanghai Drug Administration issued the “Announcement on the Quality of Cosmetics Supervision and Sampling Inspection No. 1 in 2020”, which was represented by MINISO (Guangzhou) Co., Ltd. and produced by Viscos (Tianjin) Biotechnology Co., Ltd. Peeling nail polish, the detection of 2B carcinogen chloroform was as high as 589.449μg/g, which exceeded the Chinese national standard limit by 1472 times.
According to the company’s information, in July 2018, the Korea Gyeonggi-do Health and Environmental Research Institute disclosed that the organization had detected two blushes in orange and pink collected from MINISO’s stores in Korea from February to April last year. The heavy metal antimony exceeded the standard and was judged as unqualified. At present, all products exceeding the standard have been recalled, discarded and sold by the Korean Food and Drug Safety Agency.
Shop opening speed “fly up”
MINISO was established in 2013 by Ye Guofu and Japanese designer Junya Miyake. This is not the first time that Ye Guofu has tried this “three lows” (low cost, low gross profit, and low price) business model. Prior to this, he had created the nationally popular jewelry chain brand “Aiyaya”.
According to the official website of “Aiyaya”, in 2004, Ye Guofu founded the “Aiyaya” brand, focusing on small accessories, targeting female consumers aged 12-28 years old with a monthly salary of less than 2,000 yuan. Most of the products are below 10 yuan, the cheapest only costs 1 yuan, and the expensive ones are only 20 or 30 yuan. In 2005 and 2006, Aiyaya invited celebrities Ying Caier and Li Xiang as endorsements. In 2007, Aiyaya had opened nearly a thousand stores with retail sales of 560 million yuan.
Although Aiyaya was finally abandoned by the market, Ye Guofu discovered a brand-new business model in China’s jewelry monopoly industry: brand chain and low-price marketing.
The reporter learned from the enterprise search that in 2013, when Ye Guofu was traveling in Japan, he found that there were many hundred-yen shops. He found Japanese designer Junya Miyake, who was responsible for design and Japanese company operations, and Ye Guofu was responsible for supply chain integration and China. Company operations. In November 2013, the first MINISO opened in Guangzhou. The business model is similar to that of MUJI and Uniqlo, focusing on exquisite and simple product design styles.
The business model of “Ten Yuan Store” is not unfamiliar, but MINISO has “decent” low prices, and has “emptied” consumers’ wallets without knowing it. According to media reports, Ye Guofu once regarded products as the first strategy of MINISO. His understanding of product-centeredness can be roughly understood as “extremely high-cost performance”. This is summarized as the “three-tier” strategy in MINISO. “High and three lows”, the three highs mean high value, high quality and high efficiency, and the three lows mean low cost, low gross profit and low price.
From the data point of view, compared with “Big Brother” MUJI, MINISO goes well.
The prospectus shows that Ye Guofu, the founder of MINISO, holds 80.8% of the shares, and Tencent and Hillhouse Capital, as the only two external institutional shareholders, each hold 5.4%.
The prospectus shows that in the 2019 fiscal year (July 2018 to June 2019), MINISO’s annual revenue reached 9.394 billion yuan; under the influence of the global new crown pneumonia epidemic, the 2020 fiscal year (July 2019 to June 2020) Month), MINISO’s annual revenue was RMB 8.979 billion. In the fiscal year 2020, MINISO’s gross profit was RMB 2.732 billion, an increase of 8.8% compared to RMB 2.511 billion in the fiscal year 2019; the gross profit margin in fiscal year 2019 was 26.7%, which increased to 30.4% in fiscal year 2020.
Commodity sales and franchise management service fees are the main source of MINISO’s revenue. In the two fiscal years with deadlines of June 30, 2019 and June 30, 2020, MINISO’s product sales achieved revenues of 8.465 billion and 8.055 billion, respectively, accounting for 90.1% of total revenue. And 89.7%, the proportion has declined.
Correspondingly, the company’s franchise service management fee accounted for an increase. The franchise management service fee mainly refers to the authorization fees charged by MINISO to carry out franchise and joint operation services, as well as the product deposit. In the above two reporting periods, franchise service management fees achieved revenues of 612 million and 587 million respectively, and their share of total revenue increased from 3.4% to 3.7%.
The official website of MINISO shows that investors are required to pay the license fee, product deposit and decoration prepayment. The licensed trademark usage fee is 80,000 yuan per year, and the goods deposit is 750,000 yuan. 38% of the daily turnover (33% for food) is used as the investor’s income and transferred to the investor’s account on the next day; the store rent, labor, electricity, industrial and commercial and tax and other miscellaneous expenses are borne by the investor. The decoration is provided by the company’s engineering department with design drawings, and the company’s decoration team is unified image decoration, and the container shelves are provided by the company at its own expense.
According to the prospectus, third-party stores accounted for 96.9% of MINISO’s 4222 stores. In 2018 and 2019, the number of domestic franchise stores was 2,252 and 2,535 respectively. In the same period, there were only 2 and 8 directly operated stores. Under the impact of the epidemic, as of June 30, 2020, MINISO has 2,526 domestic franchised stores and 7 directly operated stores.
MINISO, which has always been adhering to small profits but quick turnover, also disclosed the gross profit margin this time. As of June 30, 2019, MINISO’s gross profit margin was 26.7%, which increased to 30.4% at the end of the first half of 2020.
Amazing overseas performance, North American and Indian markets are the future focus targets
MINISO’s official website shows that in 2018, MINISO opened 3,500 stores in 79 countries and regions around the world, with revenue of 17 billion yuan and a total of more than 30,000 employees. The prospectus shows that as of June 30, 2020, MINISO has entered more than 80 countries and regions including the United States, Canada, Russia, Australia, and Germany, with more than 4,200 stores, including more than 2500 stores in the Chinese market. , There are more than 1,680 overseas markets.
The prospectus shows that in the 2020 fiscal year, MINISO’s overseas revenue reached 2.935 billion yuan, accounting for 32.7% of the total revenue, down 3.2% year-on-year.
As of June 30, 2019, except for China, the Asia-Pacific market, the United States, and Europe achieved revenues of 1.738 billion, 1.049 billion, and 124 million, respectively, accounting for 18.5%, 11.2%, and 1.3% of total revenue, respectively. As of the end of June 2020, the proportion of revenue in the US market has increased to 13.6%, and the proportion of Asia-Pacific excluding China has fallen to 15.9%.
Among the 1205 MINISO stores in 2018, 68 were directly-operated stores and 1,137 were third-party stores; in 2019, among the 1,668 MINISO overseas stores, there were 136 directly-operated stores and 1,542 third-party stores. ; As of June 30, 2020, the number of overseas stores has increased to 1,680, with 122 directly-operated stores and 1,567 third-party stores.
According to the information on the company’s official website, at the group’s annual meeting in early 2018, Ye Guofu emphasized that MINISO will follow the guidelines of achieving “100 countries and 10,000 stores” by 2022 as the company’s plan. There will be 10,000 stores in 100 countries, including 7,000 overseas stores, with annual revenue of 100 billion yuan (approximately US$14.52 billion).
MINISO is trying to “go out”. When talking about the next overseas strategy, MINISO emphatically mentioned that the company will focus on the North American and Indian markets in the future.
Prior to September 2018, MINISO announced that it had signed a 1 billion yuan strategic investment agreement with Tencent and Hillhouse Capital. This was the company’s first introduction of external capital. After the completion of this round of financing, MINISO launched the “One Hundred Countries and Ten Thousand Stores Plan”, which is to open 10,000 stores in 100 countries. During the epidemic, Ye Guofu adjusted the original store opening plan for 2020 and raised the target of 600 new stores worldwide to 1,200.
Source: Beijing News