Being a "Price Buster", MINISO Dominates the Philippine Market with High Quality and Low Price Products
MANILA, Philippines, Sept. 5, 2018 /PRNewswire/ -- On the Chinese Valentine's Day, the 60th MINISO store (SM Aura Premier Store) in the Philippines held its grand opening, and it was also the 60th anniversary celebration of SM Group, the largest retail group in the Philippines.
In June 2016, MINISO collaborated with SM Group to introduce MINISO to the country, bringing high quality but low-price daily necessities to local consumers, which quickly grew in popularity.
On June 16 of the same year, the first Philippine flagship store was opened in Robinson Manila Plaza. Local media described the store's sales as a "miracle in the Philippines" after its first three days of operation saw sales soaring above RMB 300,000.
Cooperating with the largest retail group in the local market, selling fashionable and quality products and defining itself as a "price buster," MINISO grabbed the retailing market share rapidly in the Philippines.
MINISO cooperated with SM Group, the largest retail group in the Philippine market
Almost everyone knows SM Group in the Philippines and Southeast Asia.
SM group, which is made up of five listed companies, is one of the largest comprehensive property developers in Southeast Asia. Founded in the Philippines in 1958 by Mr. Shi Zhicheng, a native of Quanzhou, Fujian Province, its core business covers retail, shopping center, banking finance, real estate development, hotels and exhibitions
After 30 years of rapid development, SM group has 77 large integrated shopping centers throughout the world, with a total construction area of over 9.62 million square meters. SM Group has 70 shopping centers in operation in the Philippines with a total construction area of over 9 million square meters, among which SM Megamall, SM City North EDSA and SM Mall of Asia are among the top 10 shopping centers in the world.
SM group's influence in the local business community is equivalent to that of Wanda Group in China.
The cooperation with SM Group enables MINISO to gain powerful channel resources in the Philippines, so as to rapidly expand its business there in a short period of time, and enable its brands, stores and products to reach consumers in more regions.
A consumer market with great potential for development
The Philippines is an easily underestimated economy in Southeast Asia. With a population of over 100 million, the Philippines' GDP has maintained a high growth rate of 6.2 percent in the past six years. With the continuous growth of national income and a strong willingness to consume, the Philippines is a market with great potential for foreign retail brands.
According to the official website of CCPIT (China Council for the Promotion of International Trade), one of the main highlights of the Philippine economy in 2017 was the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN), exempting personal income tax with annual taxable income of 250,000 pesos (about $5,000) and below. Salaries and other bonuses totaling 90,000 pesos (about $1,800) are also exempted. By raising the net income of its workers, the Philippine economy is reaping huge benefits from increased consumption, savings or investment.
The Philippines has opened retail investment to foreign investors since 2000, and more foreign brands are now coming into the country. "This creates a vibrant and healthy competitive environment for us with domestic brands," Lorenzo Formoso, President of the Philippine Retailers' Association (PRA) told the media.
And the Kantar Consumer Index 2018 Global Brand Footprint Report showed that Filipinos prefer foreign brands to local ones. Domestic brands accounted for just 28% of the top 50, while foreign brands accounted for 72%.
Steady economic development and strong consumer willingness are the preconditions for the retail industry to capture business opportunities.
On August 4, 2018, MINISO held the global agents summit in Manila. At the summit, MINISO's co-founder and CEO Mr. Ye Guofu encouraged market developers and franchisees to speed up brand expansion. "It is necessary to be brave to 'eat crabs' (to be the first person to try) in market development," he said.
And MINISO's latest figures showed that in its ranking of the number of foreign store openings for 2018, it had opened 60 stores in the Philippines, second only to Indonesia and India.
According to Hu'an, MINISO Philippines' marketing director, MINISO's average daily sales in a single store in the Philippines reached $3,333 per day. In 2018, MINISO aims to accelerate its placement in emerging commercial areas and communities, opening 80 stores in the Philippines altogether.
Consumers have urgent needs for high cost performance
How can MINISO open up the market at such a rapid speed while facing a brand new market?
In addition to the factors such as economy, population and purchasing power, a very important reason is consumers' active consumption mentality and the changes of consumption behavior. Any brand that captures consumer trends and insights into changes in consumer behavior has an opportunity to grow in the local market. Rising prices for major consumer goods and services in the Philippines are undermining consumer confidence to a certain extent. On the other hand, their need for high cost performance is becoming more urgent.
MINISO takes the strategy of "high quality and low price" as its key point, with a product design that is simple and natural, keeps up with fashion trends, and has been loved by local consumers since it entered the Philippine market. With a minimum price of 99 pesos (about $1.85), MINISO stands out in the local retail market for its extremely good design, high cost performance and excellent shopping experience.
Hu'an, MINISO Philippines' marketing director said that, the per capita income level of the Philippines is not high, equivalent to that of China's fourth-tier cities, but Filipinos have the "no saving" consumption concept. Consumers in the Philippines are the most optimistic among Asian markets, according to the Nielsen consumer confidence index.
Concerning shopping approach, despite the fact that the Internet penetration rate is growing rapidly in the Philippines, most Filipinos prefer to go shopping in retail stores instead of on-line. As a result, MINISO can give full play to its experience in operating retail stores.
Necessities accounted for the lion's share of monthly spending among Filipino consumers, while MINISO mainly sells a large amount of products of rigid demand. Therefore, MINISO has become a brand for the Philippine consumers that whenever you walk in, you will want to buy something in it.
The advantages of MINISO: high quality, low price and upgrade products fast
Well-made goods at competitive prices are favored by local consumers. In the Philippine market, the most competitive advantages of MINISO are the high quality and low price products, the abundant SKU categories, and the mainstream consumer groups of the brand are mainly young people.
According to the official data, MINISO's top three best-selling products in the local market are digital electronics, health and beauty products, and household products (especially dolls). Consumer demand for digital electronics and health and beauty products is high in the Philippines, while toys nd dolls sell well because of licensing cooperation and price advantages, Hu'an said.
The products of MINISO upgrade rapidly, which can always surprise the consumers. At the same time, the product categories and specific products will be specially tailored for the local market. For example, the Philippine tourism industry is booming, attracting a large number of tourists from all over the world every year. Therefore, MINISO launched the MINIgo series focusing on the concept of light travel in the local market, covering everything in traveling, from storage bags to luggage boxes.
No matter what kind of products, MINISO always sticks to the standard of "high cost performance + quality service". In the minds of Filipino consumers, cost performance, whether the products are attractive or not, and service quality are the main factors for them to decide to buy. As long as they have a good consumption experience in the MINISO store, they are usually more inclined to buy again.
Mr. Ye Guofu, the global co-founder and CEO of MINISO believes that, product has always been the first strategy for enterprise development, and high quality but low-price product is the traffic permit for MINISO to enter different countries.
Not only in the Philippines but also in many overseas countries such as the United States, Canada, India, Vietnam and Brazil, MINISO has won a good reputation for its high quality and low price products. By August 2018, MINISO had opened more than 1,000 stores outside the Chinese mainland and developed in more than 70 countries and regions, and its terminal sales volume reached $380 million in the first half of 2018.