---
title: "Revenue Less Than 1/5 of Yonghui, Yet Spending 6.27 Billion to Acquire Yonghui: Where Does Miniso's Confidence Come From?"
description: "In September, Miniso announced it would acquire a 29.4% stake in Yonghui Superstores for 6.27 billion yuan, including 21.1% held by Dairy Farm and 8.3% by JD.com. Upon completion, Miniso would become the largest shareholder of Yonghui. Despite Yonghui's cumulative losses exceeding 8 billion yuan and a reduction of over 400 stores in the past three years, it remains a representative traditional supermarket chain with a solid foundation. Comparing revenues, many have dubbed this acquisition a 'snake swallowing an elephant,' as Miniso's 2023 revenue was less than one-fifth of Yonghui's."
author: "赵胜男"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2024-11-08"
language: "en"
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# Revenue Less Than 1/5 of Yonghui, Yet Spending 6.27 Billion to Acquire Yonghui: Where Does Miniso's Confidence Come From?

> In September, Miniso announced it would acquire a 29.4% stake in Yonghui Superstores for 6.27 billion yuan, including 21.1% held by Dairy Farm and 8.3% by JD.com. Upon completion, Miniso would become the largest shareholder of Yonghui. Despite Yonghui's cumulative losses exceeding 8 billion yuan and a reduction of over 400 stores in the past three years, it remains a representative traditional supermarket chain with a solid foundation. Comparing revenues, many have dubbed this acquisition a 'snake swallowing an elephant,' as Miniso's 2023 revenue was less than one-fifth of Yonghui's.

In September, Miniso announced it would acquire a 29.4% stake in Yonghui Superstores for 6.27 billion yuan, including 21.1% held by Dairy Farm and 8.3% by JD.com. Upon completion, Miniso would become the largest shareholder of Yonghui. Despite Yonghui's cumulative losses exceeding 8 billion yuan and a reduction of over 400 stores in the past three years, it remains a representative traditional supermarket chain with a solid foundation. Comparing revenues, many have dubbed this acquisition a 'snake swallowing an elephant,' as Miniso's 2023 revenue was less than one-fifth of Yonghui's.

Why would Miniso dare to acquire Yonghui? What kind of company is behind this move?

**Leveraging Quality at Low Prices**
**Breaking Through E-commerce Siege** When mentioning Miniso, many people immediately think of 'low-price good products.' Founded in 2013, Miniso opened its first store in Guangzhou, China, positioning itself as a lifestyle collection store featuring IP designs, with main categories including daily necessities, home goods, trendy toys, accessories, and cosmetics. From its inception, Miniso established the brand philosophy of 'quality, creativity, and low price,' committed to providing cost-effective products. Over the past few years, while physical retail in China struggled against e-commerce, Miniso bucked the trend, achieving revenue exceeding 5 billion yuan within two years of its founding. In the first half of this year, Miniso reported revenue of 7.759 billion yuan, up 25.0% year-on-year, with adjusted net profit of 1.242 billion yuan, up 17.8%. Gross margin reached a record high of 43.7%. Behind Miniso's rapid rise is a strategy of quality at low prices. **Miniso's operating model is a true hard discount model, with a clear market positioning targeting young female consumers in first- and second-tier cities, especially those with a certain pursuit of quality of life.** A typical Miniso store carries about 3,000 products, nearly 10,000 SKUs, mostly sourced directly from over 800 Chinese factories, using volume-based pricing and short payment cycles to ensure price advantages. Prices are mainly 10 or 20 yuan, with a maximum of 99 yuan. These factories are almost all export-oriented, with 80% located in the Pearl River Delta and Yangtze River Delta. By offering low-priced but not cheap products, similar to Uniqlo and Decathlon, **Miniso effectively avoids the red ocean competition of e-commerce and other retail formats.** It does not sell cheap goods but low-priced goods; it does not offer mass products but minimalist quality items. This positioning meets consumers' demand for cost-effective products and their pursuit of quality of life. Today, Miniso stores are ubiquitous in major shopping malls, and visiting Miniso while shopping has become a habit and pleasure for many young people. With low prices, there's no fear of price drops, so they can shop with confidence.

**Overseas Business Revenue**
**Up 42.6% Year-on-Year to 2.73 Billion**
Since its founding in Guangzhou in 2013, Miniso quickly made its mark in the domestic market with its unique business model. However, Miniso's ambitions extend far beyond that. **In 2015, the company launched its globalization strategy and began expanding overseas.** Asia and the Americas are Miniso's primary overseas destinations. In FY24, GMV in Asia and the Americas reached 4.676 billion and 6.462 billion yuan, accounting for 36% and 50% respectively. Riding the wave of trendy toy culture and value-for-money consumption, overseas stores have strong organic growth, with average revenue per store in the Americas and Asia (excluding China) continuously rising. Source: Huafu Securities, '2024 Miniso Research Report: Super Brand New Decade, Global Expansion in Progress.' However, Miniso's initial overseas expansion was not smooth sailing, facing **localization challenges** (different market characteristics and consumer needs), **shrinkage issues** (frequent 'zero-dollar shopping' in North America), **profit distribution between headquarters and subsidiaries**, **fierce market competition, and brand premium** issues. For example, Miniso once sold winter products in tropical countries and used Chinese weighing standards for American scales. Through trial and error, Miniso began implementing localization strategies in overseas markets, customizing products to local culture and consumer needs. For instance, it launched lifestyle products for young women in India and developed products suitable for local dress habits in the Middle East. Regarding shrinkage, in markets like North America, it posed significant challenges. The company took measures such as installing security tags and increasing inventory counts. Currently, **Miniso is performing increasingly well overseas and has become a benchmark for Chinese consumer brands going global.** Miniso ranks first globally in the private label retail market, with a 6.7% global market share in 2021 and 11.4% in China, both industry-leading. In the first half of this year, Miniso's overseas revenue grew 42.6% year-on-year to 2.73 billion yuan, accounting for 35.2% of total revenue. Growth partly came from store expansion. As of June 30, 2024, Miniso had over 5,000 stores globally, covering prime locations in New York, Los Angeles, Paris, London, Dubai, Sydney, Istanbul, and other cities, with overseas stores reaching 2,753. Over the past four years, it has added nearly 200 stores annually.

**IP Strategy**
**Frequently Launching Hit Products** While maintaining rapid expansion, Miniso continuously strengthens product innovation and brand upgrading. **By collaborating with multiple well-known IPs, it has launched a series of co-branded products to meet young consumers' demand for personalization and differentiation.** In 2022, Miniso initiated a brand upgrade strategy, launching the slogan 'Lighting Up Beautiful Life in 99 Countries,' further reinforcing its international brand image. **Successful overseas collaborations include global IPs such as Disney, Marvel, Sanrio, NBA, Pokémon, and Jurassic World.** These partnerships have enhanced Miniso's brand influence, attracted numerous consumers, and boosted sales. Notably, the collaboration with Disney has been very successful, launching co-branded products featuring Marvel, Strawberry Bear, Stitch, and other IPs, which enjoy high popularity and sales worldwide. For example, the IP-themed store co-branded with Disney in Wuhan's Jianghan Road has become a new city landmark. Additionally, Miniso launched a 'Everything Can Be Pink' themed series with Barbie, with over 120 co-branded products globally. Reports say that within just five days of launch, nearly half of the Barbie series categories were sold out online, and many physical stores reported hot products out of stock, sparking an online 'help buy' trend. Through its IP collaboration strategy, Miniso has partnered with over 80 IP licensing companies (as of June 30, 2023), launching tens of thousands of SKUs, with cumulative sales exceeding 700 million units. Users who purchased IP products contribute 263% more per capita than regular users. Miniso's success has not halted its development. In 2020, the company launched a new brand, TOP TOY, focusing on the trendy toy market, covering eight categories including blind boxes, building blocks, figurines, and model kits. To date, Miniso has successfully incubated two brands: **Miniso as the main brand, with TOP TOY as a supplement.** According to the latest data, TOP TOY's revenue in 2023 reached 680 million yuan, up 58.5% year-on-year, an increase of 251 million yuan from 429 million in 2022, nearly 60% growth. Both Miniso and TOP TOY are developing steadily. This expansion of its retail footprint through the acquisition of Yonghui shares also demonstrates Miniso's financial strength. Market reactions to the acquisition have been mixed. Some analysts believe Miniso aims to further expand its retail territory and enhance competitiveness by taking a stake in Yonghui. However, others worry the acquisition is hasty. After the announcement, Miniso's and Yonghui's stock prices diverged: Miniso's US-listed shares fell 10% pre-market and over 15% after the open, while Yonghui's shares hit the daily limit up. On the night of the acquisition, Ye Guofu and other management held a conference call to explain the rationale: 'I've looked at retail globally. I might make mistakes elsewhere, but in retail, I will never be wrong... Yonghui's current price is at its lowest point. Many people don't understand it, but I think this is exactly the best opportunity.' Whether this hand can turn the tide depends on the players' strategies.


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