Japanese designer brand Miniso, which has a presence in 86 countries, operates as many as 102 stores in India, a market it claims is among the top-5 contributors to its topline. The company's USP is its low-products that come in the Rs 75-1,500 range. Miyake Junya, co-founder and chief designer of Japanese designer brand Miniso tells Sansan Lotha of its growth in India and future plans. Edited excerpts:
What kind of opportunities did you see in India when you first set up shop here in August 2017? And what were the teething troubles?
The Indian economy has been one of the fastest growing economies in the world. Many American and European brands have dominated the lifestyle industry here and have thrived. Seeing the opportunity and gauging the huge growth potential that the market had to offer, we at Miniso realised that it was the right time to enter the Indian subcontinent. We received overwhelming response for our products since the establishment of our very first store in Ambience Mall, Vasant Kunj, New Delhi. There has been no turning back ever since.
The Indian market has shown a vast potential for brand expansion and we fully intend to follow through on the opportunity, keeping the Indian taste and preferences in mind. Realising the price sensitivity of the market, the products offered lie within the range of Rs 75 to Rs 1,500, making them accessible to everyone.
How many stores does Miniso have in India? What are the expansion plans in India?
At present, we have 102 stores in India (24 Miniso-owned and 78 franchise stores). Keeping in mind the fast-paced lifestyle here, and the high demand for our products, the company will expand its retail footprint pan-India. We are looking at opening 800 stores by the end of 2020.
Are you in talks with any local firm for JV, franchise or vendor development?
We are expanding our presence in India through both company-owned model and franchise partners as of now.
What are your views on protectionism and to what extent do you foresee this as a threat?
Just like in any other country, Miniso sources products globally and locally as well. Following the same in India, we have already started sourcing and manufacturing products here. Instead of posing a threat to the company, we believe that it will help in boosting sales and enhancing brand loyalty.
Where does the company see itself in terms of financial numbers and market position three or five years down the line?
Miniso has received an overwhelming response from customers since the establishment of our first flagship store in India. We opened 70 stores in the first year itself and achieved a healthy turnover. The key contributor to the success of the brand is that the products are priced keeping in mind the middle and the upper middle class, the youth and Generation Z - with enormous attention to design.
Our vision is to achieve multi-fold growth in terms of revenue in the coming five years. We also hope to continue being India’s most loved designer lifestyle brand.
What will your staff strength be 3-5 years down the line?
Miniso stared in India with a few employees in August 2017. With the increase in acceptance and the expansion spree brand witnessed in India, we are currently a team of 298 professionals. We expect to continue expanding our family substantially as we open newer stores in the subcontinent.
How much funding has Miniso raised so far?
In a Series-A funding we raised $9.12 million from Tencent Holdings and Hillhouse Capital Group.
Is Miniso setting up a manufacturing base in India? If not, where do you source your products from?
We have recently launched a range of products that are being manufactured in India, which includes deodorants, textiles and cosmetics. Apart from that, currently we source our products globally.
Who are your main competitors and how Miniso plans to meet the challenge and ramp up market share?
We have started sourcing and manufacturing from India, which we believe is going to increase our share in the Indian market. Recently we accomplished a milestone as brand by completing 100 stores in the country. We are one of a kind in the market and believe in focusing more on our business.
What is your pricing strategy in India?
India is a price-sensitive market and understanding the same, we offer products that are good quality, well-designed and budget friendly. Our product range is priced as low as Rs 75 and goes up to Rs 1,500, which makes it an accessible brand for everyone.
How much does India contribute to the company's global revenues and profits? Is this share likely to increase?
Miniso is expanding its reach widely across the globe. We are actively exploring the international market and have opened over 3,500 stores in five years, with business turnover reaching $2.5 billion in 2018. India is among the top-5 contributors to our global revenue. At present, Miniso has reached strategic cooperation agreements with over 60 countries and regions including the United States, Canada, Russia, Singapore, the United Arab Emirates, Korea, Malaysia, and Hong Kong (China), with an average monthly growth rate of 80-100 stores.
With the accelerated demand and interest that Indian audiences have shown in our products, we certainly hope to see India’s contribution to rise.
Which segment generates the most profits? Which are the laggards?
Products from categories like ‘Health & Beauty’, ‘Lifestyle Department’ and ‘Fashion Accessories’ are the best-selling products and constitute to 65 per cent of the total annual sales. Some of these products are: cosmetics, sanitary pads, Pink Panther collection, We Bear Bare collection, bags, travel sets, cotton pads, earphone case, screwdriver set and toothbrush holders.
We have interest in all categories of products as they cater to different audiences. Therefore, we can’t count any of our segments as laggards.