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Prominent Chinese low-cost retailer Miniso plans to open about 600 overseas stores this year as it shifts the focus of its rapid expansion away from a domestic market plagued by weak consumption.
In an interview with the Financial Times, chief financial officer Eason Zhang said Miniso also planned to open roughly 400 stores in China, but this year would be the first since at least 2019 that most of its new outlets were outside the country.
Miniso’s plans reflect how China’s companies are seeking growth overseas as the country struggles to boost domestic demand. The falling cost of goods produced in China’s factories is also making them more competitive abroad.
Zhang said Chinese consumers’ behaviour was being influenced by expectations for future salaries and economic prospects, creating “headwinds” for companies in the country.
“It’s a very, very challenging task for us at this moment, especially [given] the new normal of [the] Chinese economy,” said Zhang. “It’s no longer the stage of high-speed growth.”
By the end of 2023, Miniso’s red-and-white logo adorned about 4,000 stores in most big cities in China and nearly 2,500 overseas. The company has outlets in every continent except Antarctica, with the greatest concentration in Asia. The majority of the stores are franchises.
Zhang said the impact of slowing domestic demand on Miniso had been offset by Chinese shoppers “trading down” from more expensive retailers.
“A lot of consumers are more rational when they make purchases, when they decide what they want to consume in shopping malls and so on. And Miniso is absolutely one of the beneficiaries,” said Zhang.
Miniso sells lifestyle products from electronics and water bottles to plush toys, cosmetics and snacks. An important portion of sales are from goods produced under licence from brands such as Marvel, Hello Kitty and Disney.
Zhang said Miniso’s approach differentiated it from Chinese rivals that focused internationally on unbranded ultra-low-cost goods. Miniso expected overseas markets to account for more than half its sales in the next two to three years, up from about 35 per cent last year, he said.
Jizhou Dong, head of China consumer and property research at Nomura, said Miniso’s ability to benefit from stronger demand for value-for-money products in China while attracting shoppers in inflation-wracked economies in the US and Europe would continue to drive its growth over the next three to five years.
“Overall, it puts the company into a . . . sweet spot,” Dong said, although he cautioned that persistently sluggish Chinese demand could drag on Miniso’s growth while renewed China-US trade tensions might weigh on its international expansion.
Miniso’s bricks-and-mortar presence distinguishes it from Chinese ecommerce platforms, but Zhang said it now made more than 10 per cent of its sales online, up from less than 1 per cent before the coronavirus pandemic.
Shares in Miniso, which is listed in New York and Hong Kong, have risen about 400 per cent since mid-2022, when it was the subject of a critical short seller report and was denounced by Chinese nationalists.
The nationalist backlash was triggered by a post by Miniso’s Spanish social media account that described dolls in Chinese qipao gowns as dressed like geisha — a damaging slip given widespread anti-Japanese sentiment in China.
Calls for a boycott forced Miniso to apologise for its marketing strategy, which had positioned it as a low-cost imitator of Japanese stores such as Muji, and to rebrand as a distinctly Chinese offering.
Zhang said the company now recognised promoting Chinese culture as part of its social responsibility. Miniso had integrated Chinese design into products, promoted items related to lunar new year celebrations and recommended that new overseas outlets mark their opening with traditional celebrations such as lion dances, he said.
Shanjun, a resident of the eastern Chinese city of Hefei who regularly visits Miniso stores and who asked to be identified by a nickname, said the retailer’s main appeal was its low prices and that convenience mattered more to her than whether it positioned itself as Japanese or Chinese.
“I don’t really care about the grand narrative,” said the 25-year-old, who shopped at Muji before she left her parents’ home more than three years ago. “Now I’m making money by myself, price-performance ratio is king.”
