Ye Guofu's Miniso: Decoding Retail Success Through Consumer Psychology and Costco's Lessons

Miniso, a popular retail brand, demonstrated robust financial growth in Q2 2022, with a 21% year-over-year revenue increase and a remarkable 155% rise in net profit, expanding its global store footprint beyond 5,000 locations despite the pandemic. Founder Ye Guofu attributes this success to a deep understanding of evolving consumer psychology, shifting from basic utility to emotional "interest consumption," and a "new retail" model heavily inspired by Costco's focus on high efficiency, low margins, and product value over channels. His philosophy emphasizes embracing capital and talent through equity incentives, alongside a steadfast commitment to his founding principle of providing high-quality, low-cost products.

Miniso's Financial Performance & Founding Principles

• Reported Q2 2022 total revenue of ¥2.77 billion (+21% YoY) and overseas revenue of ¥720 million (+55% YoY).
• Achieved Non-IFRS net profit of ¥210 million (+155% YoY).
• Global store count exceeded 5000, with 3168 domestic and 1877 overseas.
• Founder Ye Guofu, who established Miniso in 2013, was recognized with the EY Entrepreneur Of The Year award in 2019.

Evolving Consumer Behavior & Future Commercial Trends

• Design as a Key Driver: Beyond functionality and price, modern consumers prioritize aesthetically pleasing design (e.g., Apple products).
• "Three Fears, Three Loves" Consumer Psychology:
  • Three Fears: Fear of aging (e.g., Moutai, luxury skincare), fear of death (e.g., health products, vaccines), and fear of loneliness (e.g., trendy toys, blind boxes).
  • Three Loves: Love for beauty (e.g., cosmetics), love for eating (e.g., food-centric shopping malls), and love for taking photos (e.g., photo-op locations).
• Shift to "Interest Consumption": Consumers are increasingly willing to pay for emotional value and personal preference, moving beyond low-price or cost-performance stages.

The "New Retail" Paradigm: Lessons from Costco

• Product Over Channel: The future of retail ("second half") will be "product-is-king," moving away from the "channel-is-king" model.
• Critique of Simple "Online + Offline": Several large retailers failed by merely combining online and offline channels without a fundamental shift in strategy.
• Costco's Influence: Miniso's model is deeply inspired by Costco's efficiency (low SKU count, high per-square-foot sales), low profit margins (1-14%), and deep understanding of human nature (e.g., "feels like a bargain" pricing, unconditional returns).
• Miniso's "Three Highs, Three Lows": High quality, high aesthetic appeal, high efficiency; low cost, low gross profit, low price – a direct application of Costco's principles.

Brand, Pricing, and Corporate Strategy for Success

• True Brand Definition: A brand is something "known and used," not just known.
• Debunking "You Get What You Pay For": Argues this concept is often misleading in China, where high prices don't always reflect true value, advocating for high cost-performance.
• Miniso's "Golden Price Point" (¥10): A strategic pricing to eliminate consumer hesitation, foster joyful purchases, and build loyalty.
• "Embrace and Openness" for Enterprises:
  • Embrace Capital: Leverage capital for rapid growth and IPOs.
  • Embrace Talent: Implement widespread equity incentives (Miniso incentivized over 400 employees, creating many millionaires) to attract and retain top talent.
  • Openness: Open equity structures rather than concentrated ownership.
• "Artisan Spirit" and Product-Centricity: CEOs must be deeply involved in product development, as product is the core strategic advantage.
• Persistence in "Original Intention": Maintaining the core belief in low-margin, high-quality offerings as a competitive edge, despite pressures to increase prices, is crucial for long-term success.