MINISO IPO: Shares Jump in US Market Debut

A value retail chain offering Japanese-inspired products has attracted significant investor interest, resulting in a successful public offering. Miniso completed its initial public offering in New York on Thursday, securing $608 million in funding. The stock opened at $24.40, exceeding the anticipated price range of $16.50 to $18.50, and ultimately closed the day with a 4.4% increase.

Despite presenting itself as a Japanese company through its name, branding, product offerings, and online presence, the seven-year-old business was actually founded and developed in China. The company shares notable similarities with well-known Japanese brands like Muji, Uniqlo, and Daiso, leading some to characterize it as an imitation of these established lifestyle retailers.

Backed by investors including Tencent and Hillhouse Capital, Miniso appears to deliberately cultivate a Japanese image, even if this is not entirely accurate. The company’s public communications, such as press releases and localized websites, state that it was co-founded in Tokyo in 2013 by Chinese entrepreneur Ye Guofu and Japanese designer Miyake Junya. However, its initial public offering documents do not mention a Japanese origin.

The offering prospectus instead identifies Guangzhou, a major city in southern China, as the company’s original base and lists Ye Guofu as the sole founder and current chief executive officer. Furthermore, all of the company’s key directors and executives are reportedly Chinese nationals.

Regardless of the branding perceptions, Miniso has demonstrably appealed to a large number of young, budget-conscious shoppers who appreciate a wide variety of choices. In China, over 80% of its store visitors are under the age of 40. As of June, more than 95% of the products sold in China were priced below 50 yuan, equivalent to $7.08, benefiting from its proximity to numerous manufacturers. The company aims to introduce 100 new product variations every seven days.

Miniso generated $1.4 billion in revenue in 2019, in comparison to $17.85 billion for the 71-year-old Uniqlo and $4.17 billion for the 39-year-old Muji. The company reported a loss of $44 million for the previous year. 

The company’s retail locations, distinguished by a prominent bright red color scheme similar to that of Uniqlo, are now present in over 80 countries. Approximately 40% of its 4,200 stores are located outside of China. A majority, over 90%, of its stores operate as franchises, enabling rapid expansion, although this model also limits Miniso’s direct control over its extensive network of independent operators.