MINISO Global Flagship Store Landing in Times Square
- Chaileedo Press
- May 24, 2023
- 4 min read
The entry into Times Square this time is seen as an important part of the impact of MINISO products on the US market.
Recently, MINISO's first global flagship store made its debut at Times Square in New York City, marking MINISO as the first Chinese new consumer brand to settle in Times Square. The store generated nearly $80,000 in sales on its opening day, setting a new record for single-day sales among all stores worldwide.
Tom Harris, President of Times Square Alliance, attended the ceremony. "I would like to congratulate MINISO on opening a flagship at Times Square," he said. "Times Square is known for its vibrant and alive atmosphere. MINISO brings its wide variety of lifestyle products and adds to the dynamic environment here. Its arrival reflects the inclusiveness and diversity of Times Square."
(MINISO's first global flagship store)
Breaking into the American Market
The first global flagship store of MINISO is located at the intersection of 42nd Street and 7th Avenue in Times Square, adjacent to iconic landmarks such as the Broadway theater district and Madame Tussauds Wax Museum.
The flagship store occupies a street-facing space of 1,000 square meters and features ten different sections tailored to the most popular product categories in the local market, including an IP zone, blind box zone, toy zone, fragrance zone, and beauty zone. On the opening day, the storefront showcased beloved Disney characters such as Mickey Mouse and Toy Story, as well as other popular licensed characters, attracting the attention of numerous visitors.
Times Square in New York City is known as the "Crossroads of the World" with an annual foot traffic of over 500 million and a daily coverage of 1.5 million people in the heart of the city. It is a landmark of New York City and a global center of fashion. As one of the most prominent commercial hubs in the world, it attracts numerous top brands from around the globe.
Therefore, MINISO's entry into Times Square is seen as a crucial step towards its expansion into the US market.
“The opening of the Times Square store is a crucial step towards our transformation and upgrade,” said Guofu Ye, Founder, Chairman, and Chief Executive Officer of MINISO. “Times Square is the Crossroads of the World and a hub of business, entertainment and culture. By making a physical presence in one of the busiest pedestrian areas, MINISO appeals to New Yorkers and visitors from around the world, and responds to consumer demands for attractive, fun, useful and affordable products.”
Overseas market exceeds expectations
Guofu Ye commented, "We delivered a strong start to calendar year 2023 with the best March quarter performance in our history, shaking off three years of uncertainty caused by pandemic. As a result, our revenues grew to over 2.9 billion yuan($0.411 billion), an increase of 26% year-over-year. Our margin profile continued to beat expectations, adjusted net profit margin expanded to 16.4%, an 11.7 percentage point increase compared to same period last year, and adjusted net profit grew to 483 million yuan($68.51million), an increase of 336% year-over-year. Both figures represent new all-time highs for MINISO."
(MINISO Group March Quarter 2023 Financial Results)
In the overseas market, during the reporting period, the overseas market revenue was 800.9 million yuan($113.6 million), a year-on-year increase of 54.6%. The main reason for the growth was that the average number of stores increased by 11.9% year-on-year, and the average revenue per MINISO store in the overseas market increased by 38.1% year-on-year.
“Revenue from overseas markets contributed 27.1% of our total revenue in the March quarter, five percentage points higher than the 22.1% contribution in the same period of 2022.”
MINISO's financial report showed that as of December 31, 2022, the total number of MINISO stores worldwide reached 5,440. Among them, there were 3,325 domestic stores, a net increase of 157 compared to the same period last year. The number of overseas stores was 2,115, a net increase of 238 compared to the same period last year.
Due to the solid execution of the MINISO brand upgrade and the strong performance of its overseas business, the gross profit margin for the quarter in March reached 39.3%. Eason Jingjing Zhang, Chief Financial Officer and Vice President of MINISO, commented,“Looking forward into the June quarter, we expect our sales will continue to grow strongly on a year-over-year basis, driven by better store-level performance and store network expansion, while our margin profile will also continue to improve strongly on a year-over-year basis.”
Is the beauty category no longer important?
In this year's financial report, MINISO mainly mentioned the trend and play category, and the beauty category was not mentioned separately.
Beauty products are a part of MINISO's product portfolio. Public information shows that MINISO's core SKU is about 8,000, covering 11 main categories including household items, electronics, textiles, bags and accessories, beauty tools, toys, cosmetics, skincare, snacks, perfumes, and stationery gifts.
MINISO's growth cannot be separated from beauty products. In 2013, Ye Guofu and fashion designer Miyake Junya founded MINISO, which mainly operates new retail focusing on department stores, beauty, and digital products. In the early days, most of the prices were set at 10 yuan, making it one of the early beauty channels for many Chinese consumers.
In addition, the globally renowned cosmetics contract manufacturer Intercos sued MINISO in 2016. It is understood that in the cooperation between MINISO and Intercos, both parties adopted a model of delivery before payment. The court ruling also showed that Intercos purchased raw materials and organized production according to MINISO's orders. After the products were produced, they were stored in Intercos's warehouse and then shipped according to MINISO's instructions.
"MINISO has been using this model since its inception, placing orders with factories first, and only getting paid after delivering and selling the goods. It worked before, but during the pandemic when logistics are affected, problems can easily arise," a senior cosmetics industry professional told Chaileedo. In the view of industry insiders, the sluggish macro cosmetics market is one of the factors contributing to the difficulty in selling MINISO's beauty products.
MINISO's expansion overseas has achieved initial success, but how to balance the relationship between the beauty category and the trend and play category may be the focus of operational changes in the future.
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