MINISO after COVID-19: Open to Online, Stall Economy and Embracing IP for Toys

  • MINOSO released its Q3 F2021 financial report, indicating the company is back on its feet
  • The emergence of online shopping significantly boosted the brand recognition for MINISO in 2020
  • The expansion goal for MINISO is to achieve an increment of 500 stores in China by the end of 2021

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The company recovered to the pre-pandemic level, but not the same outlook in 2019.


Chinese variety brand retailer MINISO has released its Q3 F2021 financial report, indicating the company is back on its feet. In the first quarter of 2021, the company generated total revenue of CNY 2.22 billion, reporting an increase of 45% YoY that was mainly driven by its operations in China (domestic operation). The income is tied to the same period in 2019. The company's operating profit margin and adjusted net profit margin bounced back to pre-pandemic levels during this quarter, indicating that the company has resumed normal business operations. Nevertheless, there are some post-COVID challenges that the company is encountering at the moment.


COVID-19 hurt MINISO's overseas business

MINISO uses a variety of wholesalers and has similar business models to many of its successful peers in Japan, such as Daiso, CanDo and Seria. While Daiso adopts globalization as the main strategy, its Chinese counterpart MINISO also runs its business worldwide. However, the coronavirus pandemic reduced MINISO's overseas operations drastically.

Comparing the yearly increment of operating stores, the global market put the brakes on expansion. Since the outbreak of the pandemic, MINISO has only added 107 overseas shops, 301 fewer than in the period from Q2 2019 to Q1 2020. On the other hand, it has been steadily expanding its domestic store network.


Prior to the company's IPO in 2020, MINISO Africa and MINISO Germany were shut down. The Asia-Pacific region remains the primary overseas market alongside small parts from other regions. In response to the pause of overseas business, the company's revenue attributed from non-Chinese markets declined from 32.9% in Q1 2020 to 19.8% in Q1 2021.

The resurgence of the pandemic in South Asia and the slow-down in global economic development influence may continue to shadow MINISO's overseas performance. Given the worsening situation in India and the possible spread to the neighboring countries, the company may see a further shrinking of overseas revenue portions in the coming quarter as a result of a turbulent performance in the Asian market. Meanwhile, Asia, the biggest overseas market of MINISO, contributed more than half of the company's international income in the last quarter.

Quarterly revenue per store fell from a peak of CNY 775,000 in Q3 2019 to CNY 246,000 in the March quarter of 2021, shrunk by over 66%. Considering the seasonality, during the first quarter of 2019, the quarterly revenue per store was CNY 455,000, still nearly twice that of the same period in 2021. To reach pre-pandemic levels, MINISO needs to await the resurrection of the global economy, as well as a sound business environment that will allow the laying of a foundation for enterprises to develop.

Behind MINISO's recovery

While the overseas market has been dipping downwards, the Chinese market nonetheless shows signs of a strong upturn. MINISO quarterly revenue and profit margins reached the pre-pandemic level. Its quarterly revenue per store rose from CNY 432,000 in Q1 2020 to CNY 635,000, but was still CNY 70,000 less than Q1 2019. To ameliorate the losses of the overseas market, MINISO outperformed its original expectation in China's market, appearing as a result of sequential efforts as follows.

Strategy: go online

In the latest quarter, MINISO's domestic e-commerce contributed over 10% of the total revenue, with an 87% growth year-over-year. The pandemic overturned MINISO's strategy and forced it to change...

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