Miniso the latest retailer to disrupt Australian market
Australian retailers, already battered and bruised, are in for another onslaught with the arrival of Asia's Miniso chain, which has ambitions for up to 300 stores across the country.
The group, which sells fashion, cosmetics, accessories, homewares and in overseas stores, a selection of food, has three stores in Sydney and Chatswood, Hurstville and Bondi Junction and has instructed retail leasing agents to find a further seven in Sydney and 10 in Melbourne.
Once its distribution warehouse is up and running, there will be no stopping the group, which already has more than 1400 outlets in mainland China and is opening five a week in Singapore. It has two stores opening in North America, as well as outlets in Europe and Dubai.
Miniso, co-founded in 2011 by Japanese designer Junya Miyake and Chinese entrepreneur Ye Guo Fu, tends to follow Japanese apparel group Uniqlo and homewares group Muji around the world. It has designers in Japan and its factories are run out of China.
And it is just the tip of the iceberg for new entrants, with retailers in South Africa following the lead of Woolworths Holdings, which owns David Jones and Country Road, and leasing new sites in Sydney and Melbourne.
The arrival of Miniso comes as Australian retailers battle to adapt to online competition and pressure from international apparel giants like H&M, Zara and Top Shop Top Man.
Six high-profile apparel brands have collapsed since December, triggering a jobs rout that threatens to push close to 4000 workers onto the unemployment line, and insolvency professionals warn there are more retail failures on the horizon as Australian chains without the scale, distribution infrastructure or brand identity to compete with global giants falter.
Advising Miniso on its march into Australia is Lawrence Brown, the managing director of Complete Retail Services, who says the brand is a market leader and will disrupt local brands.
(Asian retailer Miniso wants to expand in Australia. Photo: Edwina Pickles)
According to the agents, brands such as Dotti, Supre and Valley Girl, among others, will feel the pressure from the entrance of Miniso. It is aimed at the 18 to 30 age group and stores can be large or niche.
Mr Brown said the group would focus initially on shopping centres in Sydney, but would also look at neighbourhood strips in Melbourne.
(Miniso has three stores in Sydney and Chatswood, Hurstville and Bondi Junction and has instructed retail leasing agents to find a further seven in Sydney and 10 in Melbourne. Photo: Supplied)
"We do need traffic flow, thus people past the door. I don't believe that there are many street sites that fit in Sydney, but Melbourne is a different story," Mr Brown told Fairfax Media.
"It appears that most ages are embracing the Miniso brand, in fact cosmetics are accounting for some 15 per cent of turnover.
"There are more stores currently in China, but in a short space of time they open so many worldwide. More than 50 in Hong Kong and they were opening five per week in Singapore and recently the first mega store opened on the outskirts of Bangkok and the turnover is outrageous."
(Miniso sells fashion, cosmetics, accessories, homewares and in overseas stores, a selection of food. Photo: Edwina Pickles)
Head of retail and national director at Colliers International, Michael Bate, said Miniso was "fast, flexible and on point".
"And importantly has an online presence that can target its market, ensuring its success," he said.
Mr Bate said the Australian retail market was very complex and the brands that knew their target audience would survive.
"Miniso has tested the waters and know where they want to be in Australia," Mr Bate said.
Mr Brown said Miniso intended to "cover the whole country eventually".
"Possibly in 2018 we will go north to Queensland. And then follow it up in all states of Australia," Mr Brown said.
"Given the current turnovers I believe that this concept will continue to thrive. There are some 300 new items every month that will appear in the stores and really at a great price point.
"The mix caters for all genders and age groups, and I do believe that by 2020, we will be Australia-wide. And as a group they are planning 6000 stores worldwide."
National director and head of retail leasing at Cushman & Wakefield, Matt Hudson, said the opportunity for growth for brands like Miniso was greater given their adaptive size model and ability to secure sites in key locations.
"Brands like Miniso have a simple philosophy of what customers want, which is quality, speed and affordability," Mr Hudson said.
"If you get that recipe right, you thrive, but as we have seen recently, the brands that don't, won't survive."