Text | Praying Mantis Observation
Author | Tu Lin
"MINISO wants to become a super brand."
This is the latest vision proposed by Ye Guofu at this year's global brand strategy upgrade conference.
In the past year, MINISO's profitability has significantly improved thanks to labels such as affordable prices and interesting products, as well as the positive linkage brought about by IP co-branding.
According to the semi-annual performance report as of December 31, 2022 released not long ago, MINISO realized operating income of 5.267 billion yuan during the reporting period, a slight decline of 2.9% year-on-year; The same period in 2021 has increased by 126.9%.
This year is the tenth year since the establishment of MINISO, and Ye Guofu obviously has new expectations for the brand he created by himself.
However, with the brand upgrade comes a new round of growing pains. Is he really ready to face it?
01. The happy culture driven by IP
Ye Guofu believes that the super brand exports the product and the culture behind the product. Just like the Starbucks, Nike and Nongfu Spring he cited.
Although the added value brought by the "third space" is decreasing, it is undeniable that the coffee and coffee culture conveyed by Starbucks have successfully driven the coffee category to complete market education in China.
It can even be said that without Starbucks’ early education on the Chinese coffee market, the expansion speed of local coffee brands such as Ruixing and Manner would have to slow down several progress bars.
Similarly, Nike's leading role in the domestic trendy sports shoes and clothing market is also difficult to ignore. Before the "Xinjiang Cotton Incident", Nike's position in the hearts of young consumers was almost irreplaceable.
Of course, Nike's current growth woes are similar to those of Starbucks. According to the recently released financial report for the third quarter of fiscal year 2023, Nike's revenue in Greater China was US$1.99 billion, an increase of only 1%.
Nongfu Spring, which "does not produce water, but only acts as a porter of nature", focuses on "natural health". The marketing component is indeed a bit heavy, but it can't hold it up.
Even if there are occasional negatives, it is difficult to pose too much threat to its leading position in the drinking water market. Zhong Suisui is the best example.
According to the latest "2023 Hurun Global Rich List" released by the Hurun Research Institute, Zhong Suisui, the founder of Nongfu Spring, remains the richest man in China with a net worth of 465 billion yuan, ranking 15th in the world, leaving Ma Huateng and Zhang Yiming behind.
So, what is the brand culture that MINISO wants to export? --happy.
As the founder, Ye Guofu has repeatedly emphasized the importance of "happiness" in brand tonality. He even linked happiness with becoming a super brand, thinking that "a brand that can make consumers happy will eventually become a super brand."
The consumers of MINISO are undoubtedly young people. Ye Guofu once said that young people are the group with the most potential for consumption in the future, and catching the needs of every young person is the key to MINISO.
To make young people happy, interest is the first driving force. This matter was realized by Ye Guofu when he was working on IP.
In the early days of the brand's establishment, Ye Guofu's requirements for products focused on the "cost-effective" level. He felt that MINISO products must be cheaper than others. After carefully studying the different evaluations of MINISO by consumers, he realized that cheap prices seem to be more likely to cause consumers' distrust of product quality.
In June 2019, MINISO's first Marvel-themed store opened in Shenzhen, and the store's sales doubled that day. While shocked by the value behind the interest, Ye Guofu also felt the powerful magic of IP for the first time.
Along the road of IP, MINISO has opened the door to a new world.
By the end of 2022, MINISO has signed contracts with more than 80 IP partners, including China Aerospace·Space Creation, Forbidden City Palace Culture, Disney, Pixar, Marvel, NBA, etc.
Popular IP brings more room for imagination to increase the unit price of brand customers. On the day when the Kulomi co-branded products were launched, the average unit price of MINISO exceeded 110 yuan, and the unit price increased by 117% during the project period.
Ye Guofu's exploration of young people's interests does not stop there.
In an interview with "Later" last year, he said that the app he uses the most is Xiaohongshu, and he spends more than an hour reading Xiaohongshu almost every day, and transfers good things to the product center when he sees them.
This has indeed narrowed the distance between the brand and young people. Up to now, MINISO has 830,000+ notes in Xiaohongshu.
02. More Sanrios are needed
It should be noted that although according to the financial report, the profitability of MINISO has improved, it is difficult to fully attribute it to the IPs that Ye Guofu placed high hopes on.
The financial report clearly pointed out that overseas business is actually a major driver of performance growth. During the reporting period, the total GMV of MINISO’s overseas business increased by 40.46%, driving the significant improvement of MINISO’s profitability.
The prerequisite for IP to drive brand profitability is that brands need to build a sufficiently rich IP matrix to satisfy the diverse and ever-changing appetites of young consumers.
However, judging from the current situation, whether it is a cooperative IP or its own IP, MINISO is facing certain challenges.
As mentioned above, MINISO currently cooperates with more than 80 IPs, which is not small, but certainly not enough. After all, there are not a few brands eyeing popular IPs.
Take Sanrio, MINISO’s most famous brand, as an example. In recent years, it has basically “held hands” with almost all popular consumer brands in China, including but not limited to: milk tea, gold, color contact lenses, Sankeng clothing and so on.
Today's consumers can hardly say they are absolutely loyal to brands.
According to the Nielsen report, only 8% of consumers consider themselves absolutely loyal to brands, and 46% of consumers say they are more likely to try new brands than they were five years ago.
Brands are fighting fiercely for consumers' attention, but Sanrio is reaping the benefits.
Not long ago, Sanrio disclosed its Q3 financial report for the 2023 fiscal year. The cumulative sales in the first three quarters were 51.6 billion yen, and the net profit was 6.7 billion yen (about 348 million yuan), a year-on-year increase of 114.0%. Among them, the growth rate of the Asian market reached 71%, and the profit in China accounted for more than 60%.
Ye Guofu obviously also realized this.
In his view, "business is the endless creativity". At this global brand strategy upgrade conference, he proposed a new transformation of "MINISO will upgrade from a retail company to a content company".
In fact, it’s no wonder that the early MINISO products focused on “cost performance”, after all, this is a business strategy that Ye Guofu is familiar with and has tasted the sweetness of.
In 2004, Ye Guofu founded a chain brand called "Aiyaya", which mainly sells cheap accessories. The store outside sells it for 10 yuan, and you can find a "replacement" for half the price at Yayaya.
It is precisely because of this "chain + low price" strategy that it quickly became popular all over the country, comparable to the current popularity of MINISO.
Although Aiyaya has gradually withdrawn from the market with the rise of e-commerce companies such as Taobao and Jingdong, the rapid rise of MINISO in the early stage also confirms that the combination of "chain + low price" that Ye Guofu explored is really effective. At least in the initial stage of brand establishment, it is effective.
The upgrade from a retail company to a content company shows to some extent that Ye Guofu has higher market expectations for MINISO.
However, perpetual motion-type creativity is what all companies that are concerned with content want to obtain. The idea is good, but it is not easy to achieve.
For MINISO, it does not yet have obvious competitiveness in terms of IP creativity. Its trendy play brand TOPTOY has a GMV of 600 million yuan in fiscal year 2022, while in the same period of time, Bubble Mart’s revenue has reached 2.359 billion yuan.
And even if MINISO has its own Molly, it will be a big challenge to continue to produce explosive IP. After Molly, there has never been a similar pop-up Bubble Mart, which is the best example.
This point is also something that the rising overseas market needs to pay attention to at this stage.
Driven by the demand for more creativity, it is not easy for MINISO to continue to output fun and interesting things. As a result, overseas markets may also experience the same painful period as the domestic market.
Of course, measured by the time of establishment, among the super brands mentioned by Ye Guofu, Nongfu Spring, the latest to be established, is also 27 years old. MINISO, which has just passed its 10th anniversary, deserves more patience.
Before that, Ye Guofu, as the founder, would naturally not stop tossing.
For example, lock aromatherapy as the first strategic category this year. In this regard, Ye Guofu's ambition is to "build the first fragrance for young Chinese people".
In previous interviews, Ye Guofu mentioned that the market for aromatherapy products is growing rapidly, and there are no strong brands, and MINISO also has a price advantage. He bluntly said that MINISO's current aromatherapy products sell more than 400 million yuan a year.
Another example is to create a larger flagship store and continue to strengthen consumer awareness. In early February this year, MINISO opened its first national flagship store in the core business district of Chunxi Road, Chengdu.
Behind the large Qianping street store and nearly 7,000 SKUs is Ye Guofu's ambition to build a super brand. He feels that only by building a super flagship store can consumers establish a strong impression of the MINISO brand.
Whether these actions are effective for MINISO to become a super brand needs to be verified by consumers and the market. But how to balance brand upgrading and product price stabilization is a top priority.
After all, Ye Guofu has made it clear that brand upgrading does not mean price increases. Regardless of whether it is IP, category expansion or opening a large store, high costs are required to support it.
In order to better fit the brand tone, Ye Guofu has hardly worn suits or casual business attire in the past two years. Including this press conference, he was also dressed in a Wink white T, black slacks, and white sneakers, showing no signs of leadership.
The goal of a super brand may still be far away, but Ye Guofu, who follows young people, has led MINISO on the right path.
References:
"Dialogue with MINISO Ye Guofu: If we don't follow young people, we will have no future" - LatePost
*The pictures in this article are all from the Internet
This content is original from 【Mantis Observation】,
It only represents personal opinions, and without authorization, no one may use it in any way, including reprinting, excerpting, copying or creating a mirror image.
Some pictures come from the Internet, and the copyright ownership has not been verified, and they are not for commercial use. If there is any infringement, please contact us.
• Pan-financial new media.
•Wechat 100,000+ exposed article "Who Killed the Victoria's Secret Show"? ", etc. creators;
• Focus on: new business (including live broadcast, short video and other big entertainment), new marketing, new consumption (including new retail), listed companies, new finance (including financial technology), blockchain and other fields.