ye guofu has been waiting for this time for 11 years!
2024-10-03
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the most sensational business event this week is none other than miniso, which focuses on hobby consumption, investing heavily in yonghui supermarket, a traditional offline supermarket.
zhitong finance app learned that on the evening of september 23, miniso announced on the hong kong stock exchange that it would acquire 29.4% of yonghui supermarket’s equity for 6.27 billion yuan, including 21.1% held by the dairy company and 21.1% held by jd.com. 8.3% of yonghui supermarket shares. after the transaction is completed, miniso will become the largest shareholder of yonghui supermarket. this also means that miniso has further expanded and improved its offline retail footprint and officially entered the trillion-dollar fresh food retail track.
as soon as the news came out, the retail community, investment circle and even the entire business circle immediately became excited. the hot discussion focused on: why does miniso want to be the "white knight" of yonghui supermarket? this investment, which is almost a gamble, can achieve the success of miniso. brand founder ye guofu’s dream of creating a chinese version of sam’s and costco?
perhaps the answers to these questions can be found from the birth of miniso 11 years ago. ye guofu has been waiting for this time for 11 years.
the story of growth from guangzhou to times square
first, let’s briefly review the growth story of miniso. in 2013, miniso opened its first store in huadu, guangzhou. it took ye guofu more than 10 years to build miniso into a "super brand" with stores in more than 100 countries and a global reputation.
as of june 30, 2024, the number of miniso group's global stores exceeded 7,000, including 2,753 overseas stores. in may 2023, miniso became the first new chinese consumer brand to enter times square in new york. on the eve of the 2024 paris olympics, miniso’s world’s largest flagship store will open on the champs elysées in paris. miniso has bravely entered the world's top business districts, becoming neighbors with big brands such as lv, chanel, hermès, dior, and balenciaga.
going back to 2013, when miniso started, internet e-commerce companies such as taobao and jd.com were already deeply enthusiastic, and mobile e-commerce was also about to take off. the domestic physical retail industry was devastated. however, miniso can still break through the strong siege of internet e-commerce and create a new retail business miracle.
financial writer du boqi once wrote the book "there are no secrets to famous products". he commented on miniso on the cover: "a dark horse in the economic downturn, rising against the trend of store closures." in the years when offline retail has gone through several ups and downs, this is almost the highest praise given to offline retail entities that are forging ahead.
wu xiaobo once analyzed the success factors of miniso from six dimensions - direct product procurement, design control, rapid circulation, investment and franchise, global thinking, and fan operation. the above six points are not surprising innovations, but they hit the key points of the retail industry. with resolute and efficient execution, miniso has carved a niche in the chilly "retail winter".
according to zhitong finance app, a well-designed business model is just the appearance of miniso’s long-lasting business. inside, it is the industrialists represented by ye guofu who have a firm belief in physical retail - they never believe in physical retail. you will lose the future simply and easily.
according to data from the national bureau of statistics, from january to august 2024, the total retail sales of consumer goods nationwide was approximately 31.25 trillion yuan, of which online retail sales were 9.65 trillion yuan, accounting for approximately 30.8%. offline physical retail still occupies a pivotal position in the national economy, and the structural opportunities it unleashes are endless.
as a new generation of entrepreneurs who have fought all the way from the retail battlefield, ye guofu, like cao dewang and other entrepreneurs, embraces the real economy and is firmly optimistic about the future of china's offline retail. this consistent entrepreneurial spirit makes ye guofu very courageous in investment. he dares to break the rules and seize opportunities that are "incomprehensible" to the outside world, injecting new vitality into the market and boosting the confidence of the industry.
on the night when he announced the acquisition of yonghui supermarket shares, ye guofu said: "continue to be optimistic about china and invest in china. as long as the retail industry continues to innovate, there will always be great opportunities."
ye guofu's innovative and courageous investment actions have triggered much discussion, and practitioners and investors have praised his spirit of responsibility.
this once again proves that market innovation requires entrepreneurs with leadership leadership. at this level, ye guofu’s entry into the supermarket business is like lei jun’s entry into the automobile industry. both require extraordinary courage. he sticks to offline retail and invests in china. like traditional entrepreneurs such as cao dewang, he is a rare industrialist in contemporary china with a high sense of social responsibility.
lay out "must-select + optional consumption" and improve offline retail layout
going back to the question raised at the beginning of this article, the reason why miniso dares to invest huge amounts in yonghui supermarket is that the underlying logic is that it is firmly optimistic about the development potential of china's offline supermarkets. ye guofu said in a conference call on the evening of september 23 that china's offline supermarkets are currently facing a structural opportunity that will only occur once in 20 years.
ye guofu said that his experience of buying roasted sweet potatoes at pangdonglai left a deep impression on him. since then, his on-the-ground experience in several yonghui stores has strengthened his confidence in offline retail. ye guofu believes that it is not that offline retail is no longer viable, but that there are problems with traditional retail and traditional supermarket business models. nowadays, a group of domestic supermarkets represented by yonghui have launched a revolution, which will reshape the pattern of china's offline supermarkets. yonghui, who has been trained by fat donglai, has huge potential in this field. stand out from the changes in the field.
from the perspective of miniso's strategic layout, the current consumer market has two dimensions, namely optional consumption and mandatory consumption. this is the direction guide for the group to carry out its own structure construction and further strategic layout. its decision-making basis is based on the consumer market deep understanding and forward-looking layout of multi-dimensional changes.
miniso focuses on interest consumption, deploys in the global market, and provides global consumers with "optional products" with emotional value. this strategy gives miniso an advantage in the "optional consumption" dimension. the brand carries the expression of consumer lifestyles in the new era and has accumulated huge growth potential in the global context of consumption upgrading.
yonghui supermarket, which specializes in fresh food retail, is based on the domestic market and takes the opportunity of pang donglai's adjustment to create a chinese version of sam's, providing all people with characteristic "must-select products" to maintain their daily lives. with its strong risk resistance and stability provides the group with the ability to ride through cycles. u.s. supermarket giants represented by costco, sam's, and kroger are the best examples of this resilience.
with this innovative combination, miniso has created a new landscape for china's retail industry: taking into account "must-have + optional consumption" and covering "china + the global market". as a result, miniso's offline layout has been further improved, which will also become a strong support for it to cope with uncertainty, survive economic cycles, and resist business risks.
from a market perspective, such an organic combination can help companies balance risks in an uncertain market environment and achieve "walking on two legs"; from a long-term strategic perspective, the combination of must-have + optional products brings benefits to miniso. the dual improvement of market breadth and depth not only enhances the brand's international popularity and influence, but also further consolidates the foundation of the domestic market, providing a solid insurance for it to cope with market fluctuations, and also promotes the transformation and upgrading of china's retail formats.
an important opportunity to create a chinese retail giant
to explore the quality of this synergy, we need to focus on three companies that have been mentioned repeatedly: miniso, yonghui supermarket, and pandonglai. whether a good "chemical reaction" can be formed between them, the first thing to consider is the superiority of the "donglai model", and the second is the replicability of the "donlai model".
from a results-oriented perspective, as a "phenomenal" supermarket that brings consumers back offline, pandonglai's business model needs no elaboration.
in ye guofu's view, "the fat donglai model is the only way out for chinese supermarkets." the pang dong lai model is similar to costco and sam's club in that it values products, but pays more attention to customer experience and employee respect. employee wages are higher than the industry average, and good benefits and holidays are provided. fat dong lai emphasizes small packaging products, which are more in line with the consumption habits of chinese families.
in addition, pang donglai is also very attentive to service details, such as proactively replacing defective products for customers. the decline of traditional offline supermarkets is partly due to competition from e-commerce, but more importantly is its own problems. in the past, supermarkets mostly adopted the second-landlord model, focusing only on charging shelving fees, barcode fees, etc., while ignoring the research on commodities and consumer needs, resulting in a gradual separation from the real needs of consumers.
there is also no secret to pang donglai's success. he just does the right things repeatedly, does them with heart, and is truly people-oriented. paying attention to consumer experience is the biggest "common denominator" of physical retail, which contains huge structural opportunities and is also the basis for the "donlai model" to be widely replicated.
zhitong finance app learned that yonghui supermarket has achieved remarkable results through the "donglai model" adjustment. for example, after the adjustment, the zhengzhou xinwan plaza store's first-day turnover reached 1.88 million yuan, 14 times that before the adjustment; the fuzhou store's turnover exceeded 1.1 million yuan, 6 times that before the adjustment; the xi'an store's daily average sales reached 1.6 million yuan. these data indicate that yonghui's reform model has the potential to be replicated across the country. i believe that with the help of fat donglai, yonghui supermarket will be able to successfully transform and further satisfy customers' yearning for a better life.
the strategic synergy between miniso and yonghui supermarket is mainly reflected in channel upgrading and supply chain. miniso's management said in a conference call that the company plans to use yonghui's good location across the country to upgrade its channels to increase coverage in commercial real estate. in addition, yonghui's expansion will help miniso obtain the best positions in more commercial properties, thereby enhancing brand influence and performance.
in addition, miniso also plans to assist yonghui in the innovation and development of its own products, and use its own experience to help yonghui improve product differentiation and gross profit margins. miniso has rich experience and resources in this area, including more than 1,400 high-quality suppliers and more than 1,000 product developers. miniso's management believes that through cooperation, yonghui's own brand and overall gross profit margin can be significantly improved.
according to the zhitong finance app, miniso’s entry into yonghui supermarket has once again strengthened the depth of ye guofu’s retail footprint, and miniso has received an important opportunity to transform into a retail giant.
any change takes time to complete, and the final results must be tested by time. it took ye guofu 11 years from founding miniso to leading it to the world. in the next 11 years, can china's retail market usher in its own sam's and costco under the leadership of ye guofu? from ye guofu's determination, we also see confidence.
source of manuscript: zhitong finance
