SEOUL, South Korea, Aug. 8, 2018 /PRNewswire/ — As a new brand, MINISO entered South Korea in 2016 and became popular in the consumer goods market. For its aims of focusing on both cost performance and consumers’ feelings, MINISO has had explosive growth in the past three years.
In the past, the trend of consumption changed over the course of years, but now it changes in months and even days. The retail market is growing the fastest in Southeast Asia and Africa, the business development is the most mature in the United States, Canada and other European and American regions, and Japan and South Korea are the most sensitive to fashion trends.
In the "fastest is the best" business era, South Korea is one of the most developed markets of retail industry, and with the fast expansion of K-POP, it has gradually become the leader of fashion and trends. Since MINISO entered South Korea in August 2016, it has become popular among local consumers, as it has broken the traditional business pattern by high cost performances and popularizing itself in a few of hot dramas such as Guardian and While You Were Sleeping.
Consumers in South Korean pay more attention to the "cost performance", while MINISO seized the opportunity to "break the market pattern".
According to the Bank of Korea, South Korea’s gross domestic product in the first quarter of 2018 stood at 395.93 trillion won (about RMB 2.3 trillion), increasing by 2.8% from a year earlier. On this trend, the economy is expected to grow by 3% during 2018, while the price of commodities is expected to rise by about 1.6% this year.
Compared with China and most of the countries and regions in Southeast Asia and Africa, the economic development of South Korea can be called "slow". The overall economic growth was kept at a low level for many years, and the economic growth rate in recent years has been around 3%. With the continuous low economic growth, "cost performance" is gradually influencing the purchasing behaviors of local consumers. South Korea’s retail industry is very mature and competitive. Not only international brands such as Daiso, Flyingtiger and MUJI, but also local brands like Modernhouse, Butter, and Artbox have a certain history and powerful strength.
These retail brands maintain a high level of products, design and operation, but the overall price is relatively high. Since the establishment in South Korea in August, 2016, MINISO, famous for its high "cost performance" and simple design, has broken the price pattern in the local market. Since then, many competing brands have adjusted their price strategies to follow the trend. MINISO is the second overseas brand to change the local market after MIUI. Allen, the representative of MINISO Korea said that MINISO opened 43 stores in 2017 and has 60 stores in total so far, with the highest monthly turnover reaching RMB 31.63 million and daily sales volume exceeding 122,000. It is expected that there will be over 70 MINISO stores set up in South Korea by the end of 2018, with total sales volume reaching RMB 240 million.
As can be seen from the above that MINISO has succeeded in "breaking the market pattern" in the South Korean retail market and won a place in the local market.
MINISO is becoming stricter to product quality.
MINISO stores in South Korea are mainly distributed in shopping malls and shops in business districts, and the consumer groups are mainly women aged 15-35 years old. Allen said MINISO will expand its community stores to bring quality and low-price products to consumers of a wider range.
Business is war without bullets. It is common that brands vanish as soon as they appear in the retail industry. How to maintain the lead on the competitors and become the first brand among local consumers has become an important topic for the development of MINISO in South Korea. South Korea is a leading market in fashion; the local consumers have a high demand for product quality, and fashion trends update rapidly, which results in a higher requirements for MINISO in product operation. In addition to the price, MINISO also pays high attention to replacement rates, seasonal changes, emotional marketing and product development for people who live alone, in case consumers turn to other competitors.
Allen found that local consumption concepts in South Korea are more inclined to emotional consumption, including simple desires, service consumption centering on consumer demand, and technical services that support life sentiment. In the cognition of South Korean consumers, MINISO is a brand with warm feelings and high cost performance.
From cost performance to creating comfortable feelings, MINISO is becoming stricter on product quality and paying higher attention to providing consumers with better shopping experience. In South Korea, MINISO has a lot of hot-sale products with high cost performance. For example, the high-quality and comfortable teddy bear only sells for 19,900 Korean won, which is usually priced at nearly 80,000 Korean won of other similar competitors. Bluetooth speakers are generally sold for around 60,000 Korean won in the local market, while MINISO sells for only a third of the price of competing brands. Besides that, perfume, health and beauty tools and stationery are all high cost performance products.
South Korea is a big country of cosmetics, whose industry standard is relatively strict, especially the quality inspection of imported products. Besides the price, consumers are also concerned about the safety of cosmetics. When exporting cosmetics, MINISO strictly comply with the local quality management standards, and carries out inspection according to the safety inspection standard, including (1) artificial materials and non-artificial materials (a) Pb (b) As (c) Hg (d) Sb (e) Cd (f) Dioxane (g) Methanol (h) Formaldehyde (i) Phthalates (2) microorganism limitation test (3) capacity test 4) PH test. Truly make consumers buy happily and use safely.
"Playing" design with KIDP (Korea Institute of Design Promotion), creating "IP" products by taking advantages of the popular South Korean dramas.
Consumers currently are paying more attention to the meaning that come from consumption behaviors. In recent years, while focusing on the cost performance of products, MINISO has been inclined to pay attention to what it can provide to consumers and the development of public praise. Therefore, MINISO on one hand is increasing input of design, collaborating with KIDP to develop creative products; on the other hand, it took advantage of South Korean dramas to create "IP" products, selling products that are popular among customers.
South Korea has the world’s leading perception of trends, thus it may have higher demand to product quality, design, fashion, colors, etc. MINISO has been recruiting quality designers around the world, creating outstanding products one after another. For past two years, many products have won the international awards such as the German iF Design Award and Red Dot Award. In 2018, MINISO has developed theme products cooperating with KDM, which was organized by KIDP. KIDP is of great influence in the design industry in Asia, and KDM aims to build up a platform for MINISO and local student designers for mutual communication, development and promotion. It selected many excellent student designers to develop creative theme products, and determined the best to incubate to commercial products.
This year is the decennial of the KDM Project, which has a great impact in South Korea and is of significant meaning to MINISO. On one hand, it helps promote MINISO’s brand value, on the other hand, it improves the sense of identity and honorary degrees of MINISO in the local market. Besides, MINISO is able to get closer with South Korean design resources after the products have been launched in local market.
In addition to the investment in design, MINISO has also made great efforts in spreading reputation of the brand. MINISO’s emotional marketing and entertainment marketing in the South Korean market are among the best in many overseas markets, such as advertising in Guardian and While You Were Sleeping. As the production team of these two dramas is very effective, it has not only caused a great response in South Korea, but also in China and Southeast Asian countries. Many products such as MINISO mineral water, we bare bears dolls and MINISO earphones were shown in the dramas, and the actors also found a view to film in the MINISO stores. All those can make consumers be more familiar and trusted to MINISO. Mr. Sunshine, the drama which being broadcasted now is also collaborating with MINISO and they will create new products together for selling and promoting around the world.