Miniso Group, the newly New York-listed Chinese budget retailer, is making its first foray into the $86 billion global toy market as it tries to take on heavyweights like Toys 'R' Us on its home turf and beyond.
Known for selling low-cost items ranging from household goods to electronic gadgets with a clean aesthetic, Miniso will open the first store of its new chain Toptoy this month in Guangzhou, founder and chief executive Ye Guofu said.
The company’s entry into toy stores comes shortly after Miniso went public in the US as it rides a global boom in discount retailers accelerated by the pandemic’s economic devastation.
Miniso is now hoping its low prices and popularity can give it a foothold in China’s $12bn toy market, which Mr Guofu said is bifurcated between “old-fashioned”, higher-end retailers like Toys 'R' Us, and cheap, low-quality goods peddled at small stores and supermarkets.
“China still doesn’t have a good home-grown toy brand to serve children,” said Mr Guofu, a former pipe factory worker who became a billionaire following Miniso’s initial public offering.
Toptoy will differentiate itself from traditional toy retailers by focusing on specific products popular among children and young adults in China.
China’s toy market is slated to become the biggest in the world by 2022, surpassing the $25bn US industry, according to Bloomberg Intelligence.
Founded in 2013, Guangzhou-based Miniso operates more than 4,200 stores, of which 60 per cent are in China and the rest scattered across 80 countries including the US.
While toy retailers have shuttered stores in the US and other mature markets due to the popularity of e-commerce, toy stores continue to enjoy rapid growth in China, where many parents enjoy taking their children to physical shops for interactive experiences.
Toys 'R' Us, which filed for bankruptcy in the US in 2017, operates more than 180 stores in China in partnership with Hong Kong-based Fung Retailing, and has about 12 per cent market share among toy chains in China, according to Euromonitor.
New York toy store FAO Schwarz entered China in 2019, while Lego Group plans to open dozens more stores in the country.
Mr Guofu, who was inspired by Japan’s discount stores as well as brands like Uniqlo, Ikea and Costco Wholesale, hopes that Miniso’s model of selling low-cost, well-designed products can be transposed to the toy sector.
The company’s network with the local suppliers means it can ensure product quality at low prices, he said.
The main challenge for Miniso’s expansion plans, Mr Guofu said, is the pandemic, which has slowed business in its stores all around the world.