As other brands exit, Miniso exploits gap in retail market
● The exodus of global retail brands from South Africa is leaving space on the floors of many shopping centres, with many questioning the attraction of global brands.
But the launch of Japanese retailer Miniso may breathe new life into the retail market, with its discounted offering for consumers who are cash-constrained.
Miniso opened its first store in August last year and now has 12 stores in South Africa, with at least 10 more planned before the end of this year.
“We are still adapting and developing to the South African market, but we are anxiously looking forward and confident to serve our customers,” said Errol Sewcharran, marketing manager at Miniso South Africa.
The retailer is the brainchild of Japanese designer Junya Miyake and Chinese entrepreneur Ye Guofu, who started the department store chain in 2013. Within three years, the brand had launched more than 2 000 stores and its revenue hit $1.5-billion (about R20-billion) by 2016.
But the Japanese retail sector is experiencing its own slump as household purchasing continues to decline and the market shrinks in value.
This, coupled with Japan’s largely ageing population and shrinking workforce, has contributed to the stagnant economy, which has led to the country’s GDP being among the lowest in the Group of Seven over the past 20 years.
In South Africa, retailers are struggling to win a consumer base, with a heavy discount environment dictating buying patterns.
Sewcharran said: “A large footprint through our doors, together with sales, indicates that we are moving in the right direction. We have also been getting a steady interest with regards to our franchise opportunity, having 20 prospective franchisee candidates that have gone through the approval process.”
Miniso stores are corporate-owned but the first franchise store will open in August, and the concept will then be rolled out across Gauteng, KwaZulu-Natal and in Cape Town.
Charnet Kimmone Gayapersad, the franchise assistant at Miniso South Africa, said the price of a franchise store would depend on its size. The minimum store size would be 180m², and the maximum 300m².
“We don't just situate our stores anywhere — we have a business development team that finds good space for the Miniso brand,” said Gayapersad.
Miniso’s global expansion in 2015 saw it establish stores in more than 60 countries, with more than 30 stores in Africa, including in Nigeria, Egypt, Morocco, Kenya, Tanzania, Uganda, Mauritius and Madagascar.
The minimalist products include creative homeware, health and beauty items, fashionable accessories, office supplies, stylish gifts, seasonal products and digital accessories. The discount prices range from R50 for key rings to about R300 for perfume.
The closure of global brands such as Mango, River Island and more recently Topshop has opened the space for other international brands looking to get a piece of the retail pie.
Miniso will look at increasing its presence in premium malls, similar to its flagship store in Menlyn Park, with plans to target such malls over the next few months.
“We don’t just situate our stores anywhere — we have a business development team that finds good space for Miniso,” Kimmone said.
We don’t just situate our stores anywhere — we have a business development team that finds good space for the Miniso brand Charnet Kimmone Gayapersad Franchise assistant at Miniso SA