SHARES OF CHINESE RETAILER RISE ON WALL STREET DEBUT
Shares of Miniso Group Holding finished higher Thursday in their first day of trading on Wall Street but ended well below their peak.
Miniso, a Chinese discount retailer known for its fashionable but affordable household products, raised $608 million in an initial public offering in New York.
The retailer is the latest Chinese company to list in the U.S., amid tensions that have taken U.S.-China relations to their worst level in decades. The U.S. market remains an attractive place to go public, despite the friction over trade and technology, with Chinese firms raising at least $7.5 billion in initial public offerings in the U.S. this year, according to data compiled by the U.S.
China Economic and Security Review Commission.
Miniso founder Ye Guofu, who owns an 80 percent stake in the company, is set to become a billionaire following the listing on Thursday in the U.S., with a net worth of about $4 billion. Each of Miniso's depository shares were priced at $20 apiece, above the estimated price range of $16.50 to $18.50.
The stock opened at $24.40, and ended Thursday up 4.4 percent, or 88 cents, at $20.88. It had been has high as $24.90 earlier in the day.
“We chose to list in the United States because many global companies list there,” Ye said in a phone interview on Thursday, ahead of the company going public on the New York Stock Exchange.
“We are aiming for continuous development of our business model and are not after short-term profit, and we hope the market will see this.”
Backed by Chinese gaming company Tencent Holdings, which also owns social media company WeChat, Miniso found success in brick-and-mortar retailing by modeling itself after Japan's 100-yen stores, which sell a variety of products at about $1 each. The company has over 3,000 stores globally, more than 60 percent of them in mainland China.
Miniso stores typically sell a range of goods, from cosmetics to small household appliances, mostly crafted by an in-house team of designers. The company positions itself as a retailer of high-quality products at an affordable price — shoppers can pick up waterproof eyeliner for as little as $1.50, perfume for $3, or a pair of sunglasses for less than $8.
It also partners with brands to sell products with intellectual property licensed from Disney or Marvel, offering various items such as wallets, bags and toys featuring Marvel superhero characters and Mickey Mouse.
Ye was inspired to start Miniso in 2013, after he trav
elled to Japan with this family and was impressed by the Japanese design aesthetic.
“I realized that there are many lifestyle specialty stores in Japan selling household products and home furnishings, and we didn't have such stores in China,” Ye said.
Ye wanted to harness China's manufacturing prowess and meld it with good design, to offer quality products at attractive prices to consumers.
Miniso entered the off line
retail scene at a time when ecommerce was winning market share. Ye said he decided to take the brick-and-mortar route because he was more familiar with the industry, having had retail experience for over a decade prior to founding Miniso.
“For the products that we offer, it is more suited to an off line shopping experience as consumers can touch the products and get a feel of them, it is an experience that you cannot get online,“he said.