26 Jan 2016
Has Japanese Fast Fashion Group Found Recession-Proof Formula?
The expansion of Miniso has confounded those who said e-commerce would kill off the high street retailer.
The growth of the e-commerce sector has long had dire implications for conventional retailers. With consumers migrating online, lured by lower prices, wider selections and convenient delivery options, the high street trader has seen his footfall fall and his margins slashed, with many now struggling to break even. Against this backdrop, then, it is stunning that one conventional retail group should be posting record profits and rapidly expanding its number of outlets across the globe.
Miniso, the retail group in question, is a Tokyo-based fast fashion outlet. After making its high street debut in 2013, it was soon a fixture in almost every major mainland city. Today, it has more than 1,000 stores in China, with outlets in many leading malls and shopping streets.
Each outlet is said to offer a range of some 3,000 product lines, all chosen for both their low price and high quality. The group's management also claims that, every week, it introduces 100 new items to its shelves.
Today, Miniso has outlets across the world. This includes stores in Hong Kong, Beijing, Shanghai, Los Angeles, San Francisco, Florence, Dubai, Singapore and Bangkok. Commenting on the group's growth, Ye Guofu, the fast fashion company's Co-founder and its President for the Greater China region, said: "This year, we have been expanding at the rate of 80 new stores a month." He believes that the launch of the group has been a timely one, maintaining that e-retailing may have peaked. In light of this, he suggests that conventional retailers with a high cost performance ratio as their selling point may well rally and return to dominating the sector.
Miniso was founded by Ye, a Chinese entrepreneur, and his business partner, Miyake Jyunya, a Japanese designer. With Jyunya also serving as the group's head designer, its policy is to stick to products that are "simple, natural and rich in texture". Every week, the group looks to introduce new items, while maintaining a low-cost, but cutting edge, stance. The majority of its products are priced at between Rmb10-29, and said to particularly appeal to middle-income and white-collar consumers aged 18-35.
Apart from its range of foodstuffs, Miniso's products tend to be designed at its Japan headquarters and have to be compliant with stringent Japanese quality control standards. In China, the group prides itself on only working with premier suppliers, with many such products then offered throughout its global network. Currently, around 80% of its products are sourced from some 800 mainland manufacturers, nearly all of them from suppliers in the Pearl River Delta and Yangtze River Delta regions.
In the midst of the straitened times currently facing the department store industry, Miniso's success seems even more impressive. A number of industry insiders have even commented that its micro-department store business model may actually be recession-proof, allowing the group to expand despite the non-conducive trading environment.
Kelly Wang, Dalian Office