Ye Guofu of MINISO: Retail industry should not compete on price, and going overseas should first go to Southeast Asia and then to Europe and the United States

“Recently, everyone has been saying that I’m lucky. I want to tell everyone, without courage, how can there be luck? As long as I’m doing it, it means the possibility of success.”

On October 29, MINISO held a press conference on the results of the 2024 global brand strategy upgrade. Ye Guofu, founder, chairman of the board and CEO of MINISO, said at the conference that the retail industry is now in a good new stage of development and advocated that the retail industry should not price. “Too low prices are not good for society, enterprises and consumers. Blindly pursuing low prices is irresponsible to everyone. Without reasonable prices, there is no guarantee of product quality. Without reasonable use, it is difficult for enterprises to continue to innovate.”

Enterprises are going overseas in full swing. Ye Guofu said in an interview with the media including The Paper that for enterprises to go global, founders must have a global vision, long-termism, and unlimited resources. MINISO has been in the United States for eight years and only started to make money this year. Without long-termism, it is definitely not profitable. He spends two-thirds of his time overseas. “You should start with the easy and then the difficult. First go to Southeast Asian countries, such as Malaysia, where there are many Chinese, low labor costs, and it is close to China. If you can’t even do well in Malaysia, I suggest you don’t go global . After doing well in Southeast Asia, go to Europe and the United States. Don’t go to the United States all at once, and then fail and never dare to go abroad again, saying that globalization is a trap. Less is more, globalization should be focused, and don’t go to too many countries at once. Finally, you must prepare international inventory, and don’t go overseas directly with Chinese inventory.”

Ye Guofu believes that truly globalized companies still need to “occupy Europe and the United States.” Only by occupying the European and American markets can they build up their brand, which is the most important step in the internationalization of a company. Southeast Asian countries can send a large number of employees there, but European and American countries cannot send people there. They must find ways to localize talent, products, and marketing. The laws and regulations of these countries are also very strict, including the employment environment and product certification. Only by making good use of local resources can they do well in the European and American markets.

It is understood that relying on cost-effectiveness, high-frequency new product launches and franchise model, MINISO has been expanding rapidly since it opened its first store in Guangzhou in 2013. In 2015, the number of MINISO stores exceeded 1,000. It was also in 2015 that MINISO launched its globalization strategy and opened its first overseas store in Southeast Asia. Subsequently, MINISO quickly expanded its stores to markets such as Oceania, the Middle East, Latin America, North America, and Europe. In the first half of 2024, MINISO Group will have more than 7,000 stores worldwide.

In terms of the number of stores, Ye Guofu has set a five-year strategy for the company, including a goal of adding 900 to 1,100 stores each year from 2024 to 2028. According to the plan, MINISO will have more than 10,000 stores in three years. In the interview, Ye Guofu further stated that the number of MINISO stores opened at home and abroad is basically the same, “half and half, for example, 450 stores will be opened overseas and 450 stores will be opened in China each year.”

Specifically, MINISO has seven store formats, namely MINISO LAND, potential store, theme store, flagship/sub-main store, regular store, MINISO GO and pop-up store. On October 27, MINISO LAND, the world’s No. 1 store, officially opened on Nanjing Road in Shanghai. The store’s first month of trial operation generated nearly 10 million yuan in sales.

Ye Guofu believes that China’s retail industry has an unprecedented opportunity to break through. How to create a world-class retail company with global competitiveness and influence in China is the goal that MINISO must break through and achieve during this window of opportunity. At present, IP strategy is an important tool for MINISO to lead interest consumption. MINISO’s vision is to become the “world’s first IP design retail group”. In the next 10 years, MINISO will lead 100 Chinese IPs to the world.

In terms of IP business, MINISO has started its IP strategic layout since 2016 and has cooperated with more than 150 world-renowned IPs worldwide, with global IP product sales exceeding 10 billion. MINISO is centered in China and supported by three overseas design centers in South Korea, Japan and the United States. The South Korean design center has been established this year and will be officially promoted in the global market next year.

A set of data shared by Liu Xiaobin, vice president of MINISO Group, shows that as of now, the number of registered members of MINISO in major global markets has exceeded 100 million. The overseas membership, which began to be strengthened last year, has increased by 63% since 2024. Taking the US market as an example, in the four years from 2019 to now, the unit price of MINISO’s products in the local market has increased by 93%, and the unit price per customer has increased by 77%.

On August 30, MINISO released its 2024 first half performance report, showing that in the first half of the year, MINISO’s revenue increased by 25% year-on-year to 7.76 billion yuan; the adjusted net profit was 1.24 billion yuan, a year-on-year increase of 17.8%. Among them, overseas business revenue exceeded 2.7 billion, a year-on-year increase of 43%. The direct sales market in overseas business accounted for 56% of overseas revenue, which has exceeded the agency market. In terms of the number of stores, MINISO Overseas and TOP TOY (Editor’s Note: a trendy toy brand incubated by MINISO) both ushered in the fastest first half of the year in store openings in history, with a net increase of 266 and 47 stores respectively.

According to Dazhihui VIP, as of the close of the market on the 30th, MINISO rose 2.37% to HK$38.85 per share, with a total market value of HK$48.9 billion