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, 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 imitator of its Japanese lifestyle predecessors.
The company, backed by Tencent and Hillhouse Capital, appears to be deliberately, if misleadingly, branding itself as Japanese. In its public news, such as 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. Over 80% of shop visitors in China are under 40 years of age. As of June, more than 95% of products in China were under 50 yuan, or $ 7.08 – thanks to the proximity of numerous manufacturers – and the company proudly aims to launch 100 new SKUs every seven days.
Miniso's sales reached $ 1.4 billion in 2019, compared to $ 17.85 billion for the 71-year-old Uniqlo and $ 4.17 billion for 39 year olds 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. 40% of the 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.