Miniso, the Japanese-looking variety store from China, sees shares jump in US IPO
Investors step into a value chain that offers Japanese-inspired lifestyle products to consumers around the world. Miniso raised $ 608 million from an IPO in New York on Thursday. It debuted at $ 24.40, above its price range of $ 16.50 to $ 18.50, and ended the day up 4.4%.
Everything about the seven-year-old company - from its name, brand, and products to its website - suggests that it is Japanese, except that it was actually born and raised in China. It bears notable resemblances in many ways to Muji, Uniqlo, and the dollar store Daiso, and has been labeled as an imitation of its Japanese lifestyle predecessors.
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The company, backed by Tencent and Hillhouse Capital, appears to be deliberately, if misleadingly, branding itself as Japanese. In its public messages like this press release and country-specific website, it describes itself as a company co-founded in Tokyo in 2013 by Chinese entrepreneur Ye Guofu and Japanese designer Miyake Junya. However, their Japanese origins are nowhere to be seen in its IPO prospectus.
Instead, the document lists the southern Chinese metropolis of Guangzhou as the company's first base and Ye as its sole founder and current managing director. All major directors and executives appear to be Chinese.
Branding confusion aside, there's no denying that Miniso has successfully courted many young, budget-conscious consumers who welcome an overload of choice. More than 80% of shop-goers in China are under 40 years of age. As of June, more than 95% of products in China were below 50 yuan, or $ 7.08 - thanks to the proximity of numerous manufacturers - and the U.S. The company prides itself on a goal of getting 100 new SKUs to market every seven days .
Miniso's sales reached $ 1.4 billion in 2019, compared with $ 17.85 billion for 71-year-old Uniqlo and $ 4.17 billion for 39-year-old Muji. Last year there was a loss of $ 44 million.
The company's retail stores, decorated with their bright red color reminiscent of the Uniqlo brand, now span 80 countries. In fact, 40% of its 4,200 stores are outside of China. Over 90% of the stores are franchise stores, one reason the company can expand rapidly. However, the model also means that Miniso has limited control over its large third-party network.
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