As other brands exit, Min­iso ex­ploits gap in re­tail mar­ket

Sunday Times - - Business Banking - By PALESA VUY­OL­WETHU TSHANDU

● 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

Pic­ture: Alon Skuy

The Min­iso branch in the Nor­wood Mall, Jo­han­nes­burg. The chain has 12 stores in South Africa.

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