Image source @ Visual China
Text | Hedgehog Commune, author| Zhang Zhan, Chen Meixi, Jiaxuan, editor | Director
The "most cattle ten yuan store" Mingchuang Premium is seeking a second listing.
On March 31, Minstron Premium, which has been listed on the NASDAQ, officially submitted a prospectus to the Hong Kong Stock Exchange, planning to conduct a dual major listing in Hong Kong.
According to the latest prospectus, in the six months ended December 31, 2021, Minchuang Premium's revenue increased from 4.370 billion yuan in the same period of 2020 to 5.427 billion yuan, an increase of 24.2%, gross profit increased from 1.165 billion yuan to 1.591 billion yuan in the same period of 2020, and gross profit margin increased from 26.7% to 29.3%.
These data performance is acceptable, but combined with the financial report, Mingchuang Premium products have continued to lose money in recent years. For the financial years ended 30 June 2019, 2020 and 2021, the Company achieved revenue of $9,395 million, $8,979 million and $9,072 million, respectively. In the same period, the loss was 294 million yuan, 260 million yuan and 1.429 billion yuan respectively, with a total loss of nearly 2 billion yuan in the past three years.
In October 2020, Minchuang Premium Products was listed under the name of "the most cattle ten yuan store". How is it living today? In the face of challenges from all sides, how should Mingchuang Excellent Products respond?
Judging from the financial report of the fourth quarter of 2021, Mingchuang Excellent Products is in a state of recovery after a long period of "blood loss", but it still has not been able to solve the root cause of the "blood loss" dilemma. This is also the most important reason why the capital market still does not buy the short-term performance highlights.
First of all, the expansion rate of Minchuang Premium's offline stores has recovered to a certain extent, but it is still not as good as the performance of the same period in the past fiscal year.
Since the establishment of the brand, Mingchuang Premium has always been based on "store expansion" as the core strategy of growth. The more intense the expansion, the higher the growth momentum. Especially in the domestic market, in fiscal years 2019 to 2020, Minchuang Premium opened 222 new stores in China; in fiscal years 2020 to 2021, Mingchuang Premium opened 406 new stores.
Secondly, under the long-term trend of slowing down the expansion of stores, the revenue performance of Minchuang Premium products in the latest quarter was mainly due to overseas business.
In addition, in the domestic market, Minchuang Premium adopts a sinking strategy and actively lays out third-tier cities and below, but at the same time, the profit contribution of sinking market stores is not strong.
On the earnings call, Mingchuang Premium CEO Ye Guofu said: "In first-tier and second-tier cities, we will focus on optimizing the profit margins of MINISO stores. "This also releases a signal that the profit contribution of stores in the sinking market is not expected to increase significantly in the short term, and the profit margin level of Mingchuang Excellent Products still depends on first- and second-tier cities to carry."
A business story that begins with a ten-dollar shop on the street
In the memories of many post-90s girls, there may be a small shop with pink decorations and wall jewelry. It appeared on the street side of the town, appeared in the opening of the variety show of Hunan Satellite TV, and appeared in the implanted advertisement of the popular TV series "Ugly Girl Invincible", and the spokesperson was SHE and Lin Youjia, whose name was "Oops".
SHE endorsement Oops poster
In the student days with a limited budget, Oops is a holy place in the eyes of beauty lovers. Affordable and shiny hairbands and headbands adorn the dreams of the second princess who belong only to adolescence; exquisite ornaments and plush toys are gifts that a good friend is willing to order on his birthday, witnessing the most precious heart in the hearts of minors.
When I grew up, I looked a little rustic, but when I was a child, I thought it was synonymous with fashion and trends. In the words of a contemporary Internet buzzword, Oops pinched that generation of young people. -- The affordable price points that can be bought with a few meals, the variety of product categories, and the pink tone of the kaleidoscope offline space make it the most eye-catching shop on the way out of school.
Oops store
According to public reports, Oops stores exceeded 2,000 in 2009, through advertising marketing and offline stores to join, Ye Guofu started from a few scattered stores, and looked like it was about to become the largest chain jewelry brand in China.
The turning point of the story occurred in 2014, when Oops, which had previously maintained a double growth in the number of stores and sales scale, suddenly ushered in a cliff-like decline in sales. With the number of stores growing, the annual sales scale of Oops in 2014 was only 358.95 million, down 87% from the previous year. The excessive concentration of goods in the field of jewelry, the expansion of other homogeneous brands, and the approaching pace of the e-commerce era are all signals that appear before Oops falls from a high place.
But Ye Guofu withdrew early.
A year before Oops' sales plummeted, he had begun to bet on new business forms inspired by a trip to Japan. The japanese streets focus on simple, quality, and cost-effective 100 yen shops (yen), which makes Ye Guofu begin to re-examine his business. In the new cycle, only a low-priced trump card is no longer possible to win, rather than pushing each other in the same track as competitors, it is better to find another way to make new attempts.
Like the Oops of the year, Mingchuang Premium is also pursuing a sense of "tide". It's just that after the changing times, simple alternatives to gorgeous, IP joint name to replace the nameless miscellaneous brand, Ye Guofu has made a lot of efforts, and the labels he wants to get rid of include rustic, cheap, miscellaneous goods, and plagiarism. These labels have been with his brand since the ten-dollar store era.
This effort could not be more obvious, and it is reflected in the furnishings of every Mingchuang premium store. And Marvel, Disney, Ultraman and other big IP co-branded goods are placed on the most conspicuous shelves, co-branded posters are printed out, posted on the shelves, the minimum only 10 yuan, you can buy a Black Widow co-branded lipstick.
Marvel Black Widow series lipstick image source @ author
And this time, Ye Guofu has to face a problem that is no simpler than a decade ago.
Honest and old, can you still eat?
Ye Guofu has a nickname in the industry - "Mind Catcher". The title describes Ye Guofu's ability to capture the emotional needs of life and people's hearts in the midst of restless, rapidly changing hot spots.
This is understandable, each brand has its own growth path, but it is worth thinking about, in the long run, will Mingchuang Excellent Products take the old road of Oops and become the next "tear of the times"? If the joint name allows Mingchuang Premium to have the face of the "third consumption era", then how should it have the "Lizi" of the new consumption era? Although Mingchuang Premium has achieved good results in the past period of time, can it continue such a good performance?
Ding Sinan, CEO of mumu family, a trend collection store, said that consumers can only reach a consumer transaction if they stay in the store for a long time, and the treasure hunting shopping experience can maximize the user's resident time, thereby promoting transaction behavior to occur offline. She also believes that only large stores can achieve the effect of strong drainage, and at the same time use the promotion of brand design, packaging and design to promote conversion.
New retail brands such as KKV and HARMAY have adopted almost the same idea - large stores of more than 500 square meters, massive SKUs, fashion trendy store design...
HARMAY Shanghai Xintiandi store
But this cannot be a reason for Miniso to lose its imagination in its business operations.
Products, or more accurately, new products, have always been the most important thing for Ye Guofu.
"Shangxin" is indeed an important ability for consumer brands, but the times have changed, and the underlying logic of "Shangxin" has also changed.
In 2007, when Ip Kwok-fu implemented the supply model reform, he firmly believed that it was always the product itself that attracted customers. "In theory, new products are launched once a month, and the same customer only enters the store once a month. However, if a new product is launched once a week, the same customer may visit it four times a month. This has greatly increased the flow of passengers and greatly stimulated the sales of other goods. That was his idea.
In an era when channels and commodities were very single, there was nothing wrong with that logic. But in this new era of diversified channels and commodity proliferation, this logic obviously no longer works - unless explosive products are created, the product itself can no longer play a strong drainage effect; in today's new product explosion, it is difficult for simple "new" to arouse consumer interest. Using IP co-branding to bind social and emotional values may be a solution, but clinging to co-branding is not a manifestation of inferiority - it does not dare to take off the mask and let consumers see who they really are.
So in addition to expanding overseas and sinking markets, as well as creating momentum through IP co-branding, MINGCHUANG Needs to tell a new story, and this story cannot be a one-line growth strategy, but a set of logical and rigorous systems that keep pace with the times - what exactly is the drainage? What kind of value do you want to create for consumers? Is it not to put the label of "trend" on young people to understand young people? How to really retain consumers with goods? How to win more time for consumers? ......
Ye Guofu is 45 years old this year, compared with the new consumer founder of the "average post-90s", he is no longer young, but he still runs on a road to catch up with young people with Mingchuang excellent products.
Maybe out of breath, but still as ambitious as it was 20 years ago.