MINISO’s marketing + traffic strategy!

The changing times bring about a change in the main consumer force. Generation Z meets the conditions for independent consumption. The change in the main force also means the arrival of a new consumption era.

According to public data, the domestic retail market size is expected to reach 45.2 trillion yuan in 2021, or an increase of 3 trillion yuan from 2020. The benefits brought by the huge retail market seem to have created a grand dream for capital, and major retail companies have also begun to deploy their troops.

The offline market has always been where the traffic is. At a time when the Internet traffic dividend has peaked, the rise of new retail is like a turning point. The offline market may become a new arena for capital to increase investment and compete.

Under the influence of the retail trend, collection stores have long become a necessary consumer gathering point for major shopping malls, and MINISO is also going further and further on the road of retail collection stores. However, as market competition intensifies, the capital market is still looking forward to how MINISO will benchmark the market and play with new retail.

1. The formation of new consumption concepts and the opening style of MINISO stores

According to Tianyancha APP, MINISO is a pioneer in the field of "fashion, leisure, lifestyle and quality consumption" in the world. The simple style of its stores has rapidly increased its popularity and it has soon become one of the eyes of the new consumption era. MINISO has gone through two rounds of financing and won the favor of Tencent and Hillhouse Capital. Perhaps the capital is optimistic about the future of new retail.

The rise of new retail probably has a lot to do with consumers’ new consumption concepts. In the Internet era, e-commerce has risen rapidly, but the e-commerce shopping model that has lasted for 20 years has long made young consumers of Generation Z tired. Adding new consumption models is exactly what consumers need. In order to meet the needs of consumers, the supermarket model may be undergoing rebirth.

The reason why it is said to be the rebirth of the supermarket model is that long-term Internet consumption has caused fatigue, which has led to the return of physical consumption and has become an important scenario for Generation Z to realize new consumption. Perhaps after careful calculation, MINISO has quickly connected with Generation Z consumers and become the pioneer of new consumer collection stores.

Public data shows that in seven years, MINISO has opened more than 4,200 stores in more than 80 countries and regions around the world. The widespread popularity of the stores has led to an overall increase in customer flow and a simultaneous increase in its popularity, laying a solid foundation for MINISO's growth.

MINISO believes that its core advantages are "launching a batch of cool new products every seven days, taking a low-price and cutting-edge route, and positioning itself as a fast-fashion and leisure department store chain." This constant connection with trends is probably MINISO's strategy to keep pace with the aesthetic concepts of Generation Z. It is also precisely because of this synchronization with consumers that MINISO has been able to open so many stores since 2013.

From magnificent to light luxury life, people's aesthetic views are becoming more and more simple. The places where the minimalist style is most popular are Japan and Northern Europe. Compared with the Nordic light luxury style and the Japanese soft style, the latter is more in line with the aesthetic views of most Chinese people.

According to an observation report on MINISO by researchers in the Chinese pedestrian street industry, "as low as ten yuan" and "original Japanese design" have also become important reasons for MINISO to break out of its circle. Infinitely sinking into the user experience may satisfy consumers much faster than building a brand to explore user needs.

However, consumption concepts are changing frequently at present. The main force of new consumption no longer presents convergent consumption concepts. Instead, it has established the concept of interest-based consumption and divided consumption into niche circle cultures. For example, JK culture, Hanfu culture, fan culture, etc. are all manifestations of new consumer circles.

In the context of niche consumer circles, although offline traffic does not show the same trend of peaking as online, if Miniso wants to acquire more users, it may have to continue to focus on traffic, or dig deep into forming community consumption near shopping malls, or expand online and open up "grass planting" channels. In short, how to acquire traffic is an urgent issue.

2. A 40 trillion yuan retail market with 3 trillion yuan of growth potential, and traffic is still the driving force for growth

Traffic has now become the ecological foundation of major companies. Without traffic, any business can only be regarded as a scrapped design drawing and cannot realize any value.

But when it comes to the issue of traffic, we cannot avoid the market behind the traffic. The domestic retail market is worth over 40 trillion yuan, and is expected to grow by nearly 3 trillion yuan in 2021, which provides a very broad outlook for the retail market. How much MINISO can gain from it depends on its use and control of traffic.

From the layout of MINISO stores, it can be seen that the company focuses on small department stores, uses daily beauty products as traffic-generating tools, and uses dolls, snacks, etc. as eye-catching merchandise, directing the main traffic to female consumers in first- and second-tier cities. MINISO’s interlocking layout creates extremely attractive store marketing.

Currently, MINISO is continuously expanding its business through franchising and setting up stores across the country. An increasing number of stores are appearing in first- and second-tier cities, and MINISO has gradually become a permanent resident of major shopping malls. Based on the labels of high-quality and affordable, MINISO has certain advantages in retention, but in the new consumption era, changes in consumer preferences do not seem to be taken into account in MINISO's layout.

Although the merchandise layout of MINISO stores is updated every week, there is little change in product categories. Perhaps the stores still attract consumers from this niche circle, so it seems a bit difficult to expand the traffic range.

In the consumption habits of the vast majority of urban youth, the relationship between demand goods and favorite goods is complex. Demand goods are not something that is used for a long time. Often an item has a certain usage cycle, so there is a great possibility that the next shopping trip will even change the venue. The 2020 "Z Generation Fashion Consumption Insight Report" released by Hua Yang Lianzhong shows that young consumers of Generation Z are more casual and trendy, and they strongly agree with the idea of ​​​​getting bored with the old and liking the new.

In addition, although the offline model is very attractive to Generation Z, as young people who grew up in the Internet age, the consumption focus of Generation Z is still mainly online. A survey conducted by KuRun Data in September 2020 found that 62.5% of Generation Z users currently use their mobile phones for more than 6 hours a day.

After the advent of the short video era, the current Z generation has focused on entertainment and leisure projects in addition to work and study. On the original platforms, the time occupied by electronic games such as WeChat for social networking, Taobao for shopping, and Honor of Kings for entertainment is also increasing. This type of online platform is constantly digging deeper into the stickiness between users, which is not very beneficial for Miniso to expand its market.

QuestMobile data shows that only 2.8% of Generation Z do not make any online purchases, while 65.9% of Generation Z make more than 20% of their online purchases. If Miniso wants to gain more offline traffic support, it doesn’t just come from active consumption from users. Taking the initiative should probably be put on the agenda.

3. Traffic is the cornerstone of profitability, driven by marketing

Online consumption has become an indispensable form of consumption, and the explosion of live streaming e-commerce shows that online is still an important place for consumption. Although Generation Z is tired of this form, it does not mean the end of online consumption. On the contrary, compared with online consumption, offline may still be a place for people to realize entertainment consumption.

The pace of life and consumption habits will influence and even change each other, and Generation Z will not completely follow the offline consumption model, but can only use it as a supplement to consumption scenarios. Therefore, if MINISO wants to expand the traffic to its stores, it is necessary to plan online marketing in order to further open up online traffic channels.

If solving the traffic problem is an indispensable part of expanding the future, then how to solve the traffic problem may be an important strategy that MINISO urgently needs to deploy.

Generally, there are residential areas around MINISO. In the current consumer era where community culture is prevalent, MINISO may also be able to use various forms to upgrade consumption. The biggest advantage of the community-based supermarket model is that it is close to residents, which can form long-term fixed consumption and word-of-mouth marketing.

With the help of community groups, it may be possible to grasp most of the consumers who match the attributes of MINISO. The current strategy of MINISO to become younger and younger can also be understood as another form of consumption upgrade. Relevant information shows that in order to compete with the beauty and blind box industries, MINISO has opened relevant offline stores to layout the beauty and blind box markets, achieving an alternative upgrade based on the collection stores.

The community can serve as an important part of offline marketing. After all, during the stage of epidemic prevention and control, too many people gathering in shopping malls is not conducive to store layout. As a physical store, if Miniso wants to expand broader marketing channels, online must be an indispensable breakthrough.

Looking at the online market, retail companies, led by Alibaba, have the comprehensive Taobao Tmall platform. Based on their huge user base, they have created shopping festivals and New Year Festivals to achieve macro-online marketing for themselves. The e-commerce dark horse Pinduoduo has continued to accumulate traffic through subsidies and variety show promotions, becoming the second largest e-commerce traffic provider after Alibaba.

Looking at the marketing methods of other products, with the help of live streaming tools and content e-commerce, they can all produce a certain breaking circle effect. This is the greatest value of marketing in the Internet era, which can not only achieve traffic growth, but also increase sales revenue. If MINISO wants to realize its marketing value online and absorb and replicate the existing marketing model, it may be able to maximize the win-win situation of traffic and profitability.

In general, with 4,200 stores in 7 years, MINISO may have reached the bottleneck period of offline traffic. If it wants to maximize profits, it cannot rely solely on Ye Guofu's leverage principle. Although traffic and marketing are old routines in every industry, no company dares to abandon these two points.

Xiaomi successfully broke the circle with "hunger marketing", Tencent grew bigger by breaking the circle with traffic. Look at Alibaba, Baidu, Nongfu Spring, Heytea, etc., which company has left out these two points? After laying a solid foundation and establishing long-term retail stores, what MINISO needs to do is to continue to tap into the value of marketing and traffic.

Author: Blueberry Finance

Source: Blueberry Finance (ITparty)