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 Retail Management Report on MINISO

RETAIL MANAGEMENT REPORT

GROUP NO. 3

SUBMITTED TO:
DR. HAROON HAFEEZ
SUBMITTED BY:
ABDULLAH NIAZI (BB-17-29)
RABIYA SHAHID (BB-17-06)
NOOR FATIMA (BB-17-20)

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Retail Management Report on MINISO

Contents
INTERVIEW WITH MANAGER 2

INTRODUCTION 3

PRODUCT LINE 6

STORE LOCATION STRATEGY AND STORE LAYOUT 6

STORE ATMOSPHERICS 8

PRIVATE BRAND 11

PRICING STRATEGY 11

PROMOTIONAL ACTIVITIES (MIX) 11

LOGISTICS, WAREHOUSING AND INVENTORY MANAGEMENT SYSTEM 13

SWOT ANALYSIS 16

COMPETITIVE STRATEGY 17

PRODUCT HANDLING RISKS AND RETURN POLICY 18

OMNICHANNELS 20

CUSTOMER SERVICES 20

CSR ACTIVITIES 21

RECOMMENDATIONS AND SUGGESTIONS 22

INTERVIEW WITH MANAGER

Interviewer: Is MINISO a franchise?

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Manager: Our HQ is in China and almost all MNINISO outlets worldwide are company-owned stores.
However, to expand MINISO’s presence further, HQ developed a franchise model. In China, the franchise
model is completely managed by MINISO, however, since some overseas markets are unique, it is difficult
for the company to directly manage all stores. This is the reason why a different type of franchise model
was established here in Pakistan where local investors could manage and overlook a franchise to integrate
the brand through a localized and systematic manner.
Interviewer: In Pakistan, in how many cities does MINISO have a presence and how many outlets are there
overall?
Manager: We have 45 stores in Pakistan, of which 35 are operational in 18 cities so far. Once all the stores
become operational, we will have covered two-thirds of Pakistan’s market.
Interviewer: What product categories does MINISO offer?
Manager: We have over 10,000 SKUs in Pakistan. They are divided into 11 categories – creative,
homeware, stationery and gifts, health and beauty, accessories, food and beverages, boutique and bags,
toys, textiles, digital products, life department and seasonal products.
Interviewer: What brought MINISO to Pakistan?
Manager: In 2015, our HQ management decided to expand MINISO worldwide. We are already operational
in 72 countries and aim to be in 100 countries by end 2019. The main factor here is China’s friendship with
Pakistan. When the team from HQ first visited Pakistan, they felt the hospitality, and the market research
determined that there is high customer demand in Pakistan for Chinese products.
Interviewer: What is the competitive landscape of the category?
Manager: LATT LIV and Ximi Vogue have recently entered the Pakistani market but MINISO has
developed its customer base and reputation much quickly over the past two years as it is a completely new
business model and the opposite of conventional retail models. In a traditional retail model, the product
goes from the manufacturer to the branding section to agents and then to the franchise stores and in the end,
to the customers. This way, the cost to the customer increases with every layer of intermediaries. At
MINISO, we have revolutionized the process and deliver directly from the manufacturer to the customer,
which eliminates the intermediaries. Considering the uniqueness of our business model, we believe that our
market share will only grow.

INTRODUCTION

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MINISO- Japan fast fashion brand, headquartered in Tokyo, was founded by Miyake Jyunya -the chief
designer and young Chinese entrepreneur- Ye Guofu. MINISO is the pioneer of global fashion leisure life
commodity consumption.
Miniso advocates the philosophy of a simple, natural and quality life as well as a brand essence of "returning
to nature & restoring product essence". It leads the trend that good products contributing to a quality life in
the fashion consumption market.
Miniso was introduced by a Chinese consortium in 2013 in Guangzhou and began its expansion across
China since then. Miniso always respect customers' needs. It is dedicated to providing customers with
quality, creative and low-price products. Those simple, natural and fashionable commodities with prices
between RMB 10-29 become very popular among young people aged at 18 -35 years old. Fast fashion is
Miniso's theme. It strives to create a new and happy shopping environment, so that customers can
experience happiness, fashion and a healthy lifestyle.

 MINISO (Name Story）

The establishment of MINISO is the creation of a brand-new lifestyle. It does not deliberately
emphasize the so-called fashion or personality, but offers good and unique products to consumers.
At the same time, MINISO would not consider that popular brands should be raised their value. On
the contrary, it stands on consumers’ points of view when developing products, which is - back to
the essence, and returning to the nature, making its products more fashionable, more reliable with
lower prices. MINISO enriches our lives with a wide range of products at reasonable prices, thus it
becomes a new and fashionable lifestyle.

 MINISO (Logo）
The design of MINISO's Logo is about the image of a shopping bag, which is simple but
fashionable. While showing the industrial features perfectly, it also emphasizes the concept of
consumption, which is of strong identification and memorable.

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 MINISO (Logo）
The combination of Logo name and graphic portfolio is an expression of "smile services" to
consumers and advocates the "happiness is the best" life attitude. The essence of life is the pursuit
of happiness. Let's face life happily and enjoy what we have in life!

 BRAND PROFILE
Sticking to the life philosophy of “simplicity, nature and good quality” and the brand proposition
of “returning to nature”, MINISO focuses on life supplies with aesthetic beauty. With the core
values of excellent product design, high cost performance and comfortable shopping experience,
MINISO gains popularity among consumers, which sets the personalized consumption trend in the
household market.

MINISO began to develop in the Chinese market in September, 2013. It actively explored the
international market and has opened over 3500 stores in five years, with business turnover reaching
USD 2.5 billion in 2018. At present, MINISO has reached cooperation agreements with more than
80 countries and regions including the United States, Canada, Russia, Singapore, the United Arab
Emirates, Korea, Malaysia, Hong Kong (China) and Macau (China), with an average monthly
growth rate of 80 - 100 stores.

MINISO advocates the philosophy of quality life and in the brand spirit of “respecting consumers”,
dedicates itself to providing customers with products of “high quality, competitive price and
creativity”. MINISO earns love from the major consumers aged from 18 to 35 due to its simple and
quality features and keeping pace with consumption trend.

MINISO established a new type of life aesthetic collection store, which has become the main force
in the department stores and shopping malls along with catering, fast fashion clothing and
entertainment. It strives to provide consumers with smarter, simpler and cozier products, so that
consumers can experience relaxed and happy lifestyles when shopping.

Taking product structure optimization and product management as its priority, MINISO insists on
selecting materials from all over the world. 80% of the design is from Japan, Korea, Sweden,
Denmark, Singapore, Malaysia and China, etc. While pursuing high quality and intelligent
technology, MINISO also attaches great importance to consumers’ shopping experience and
devotes itself to creating a culture of quality service, so as to convey such features as health, leisure,
quality and creativity through shopping experience.

 BRAND PHILOSOPHY

MINISO is not only a brand, but also a way of life. It does not emphasize the so-called fashion or
personality, and would not consider that popular brands should be raised their value. On the
contrary, MINISO stands on consumers’ point of view when developing products, which is - back
to the essence, and returning to nature.

MINISO enriches our lives with a wide range of products at reasonable prices. It is like a compass,
pointing to the "basic" and " natural" directions by providing simple and natural products.

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PRODUCT LINE

MINISO's creative products are mainly based on life and leisure department stores, including
creative home, health and beauty, trendy ornaments, office supplies, stylistic gifts, seasonal
products and other 8 categories, more than 10 000-product types. Miniso pursues a simple design
style. Every product developed from a user's point of view, focusing on the rationality of the
product and the durability of its use. And the product quality is strictly managed, from the supplier's
screening and quality control, product quality control mechanism improvement, quality upgrading,
layer by layer control. They are constantly pursuing the perfection of quality. Following are the 11 major
product lines it has:

 Creative Homeware
 Stationery and Gifts
 Health and Beauty
 Accessories
 Food and Beverages
 Boutique and Bags
 Toys
 Textiles
 Digital products
 Life department
 and Seasonal products.
However, in Pakistan the following product lines are more popular and focused on according to the
consumer base response regarding the products affiliated with the following product lines:

 Household Items
 Daily Life Products
 Health and Beauty
 Fashion Accessories
 Digital Products

STORE LOCATION STRATEGY AND STORE LAYOUT

MINISO's location strategy is to open stores in what it calls "the second-best [spot] in a prime location."
The reason is simple: lower rents. That means when operating out of shopping centers, it opts for less-

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convenient locations, such as on the third floor (even though they sometimes do opt for the first floor in
aspect of customer convenience to approach store) or farther from the escalators.
This approach is the opposite of that taken by other global brands such as H&M, Zara and Uniqlo, which
compete for the hottest spots.
MINISO places extensive effort in cultivating an enriched store layout and location to help customers
capture the experience of roaming in a free environment. While the exterior retail store layout includes
exterior store design and customer flow, it also includes the following factors:

 Geographic location of the retail store (real estate).

 Size of the building and length of the walkways accessible from the entrance and exit.
 Use of furniture and exterior space for people to gather and interact.
 Style of architecture of the retail building.
 Color of paint and choice of exterior building materials.
 Design of the physical entrance and exterior window displays.
MINISO has a special team of analyst comprising of both international and locally employed design
specialists and strategists that undergo following steps to determine store layout.

 Target the First Floor (exception)

MINISO’s research indicates that customers prefer to navigate the floor of a retail store they
initially entered. Walking up and down stairs or using elevators and escalators to navigate a store
hurts customer flow. When possible, planning for a single floor store design will optimize the
customer experience. Exceptions exist, such as downtown locations where real estate is at a
premium or large department stores and malls with multiple categories of merchandise where
placing a store on the third floor and away from escalators can be more advantageous. Further,
specialists point out that store like MINISO should consider customer perception if a variety retailer
is planning store layouts, as customers associate single floor layouts with low-price and high-
variety merchandise.

 Identify Customer Flow

Customer flow patterns vary depending on the type of retailer, the size of the store, and the target
customer. Specialists and strategists use their observations to discover the problems and
opportunities unique to the store environment. The next step in maximizing space for profitability
is identifying customer flow. For understanding your customer flow and identifying areas of
opportunity MINISO uses video recording. However, setting aside different times of the day to
make in-store observations in person and recording notes is a step in the right direction for
identifying customer flow patterns that the experts tend to apply.

 Avoid the Transition Zone

After the experts identify how customers navigate the entire retail space, MINISO turns its attention
back to the entrance. The transition zone area, coined the “decompression zone”, refers to the space
just beyond the entrance to a retail store. The average customer needs this space to transition so
they can familiarize with the new environment. MINISO is adamant that nothing of value to the

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retailer, not high-margin merchandise, prominent signage, or brand information goes inside this
zone as it can be clearly observed that clear pane windows and white and red contrast of the

MINISO logo provides that transition. Customers need time, however brief, to adjust to new
lighting, smells, the music, and the visual stimulation in the store.

 Design for Clockwork Navigation

The next step moves beyond the transition zone and shifts the focus on how to leverage a customer’s
tendency to navigate the retail environment. The area just outside of the transition zone is where it
is important to make a first impression. Customers consistently turn right after entering the store
and continue to navigate the store in a counterclockwise direction. Customer behavior repeats itself
time and again in consumer research. Although researchers and design professionals have different
explanations for the reaction, in general, many recommend displaying high-margin merchandise
and valuable information just to the right of the entrance (outside of the transition zone).

 Straight Store Layout

A straight retail floor plan is probably the most recognizable type of layout and recommended by
the professionals to complement customer flow with the brand perception and layout. Celebrated
for its economy of floor space, the straight plan uses store walls, corner spaces, custom retail
displays, and other shelving fixtures to maximize every possible selling point on the floor.
The straight store layout is efficient, simple to plan, and capable of creating individual spaces for
the customer. Plus, a basic straight design helps pull customers towards featured merchandise in
the back of the store. Merchandise displays and signage is used to keep customers moving and
interested.
However, MINISO pays close attention to store design. Their stores reflect the high-quality design
of their products—simple and modern—creating a pleasant shopping experience.

STORE ATMOSPHERICS

Atmospherics are the controllable characteristics of retail space which entice customers to enter the store,
shop, and point of purchase and at MINISO, It is indeed the art of display. As a designer brand of fast
fashion, products at MINISO are large in quantity and are updated rapidly.
MINISO demands a product turnover of 21 days, with products updating every seven days so as to keep
the feeling of novelty for consumers and give them a new surprise every time they come to the store.
Therefore, much attention is paid to the product displays… It may sound easy, but it is really complicated
in practice. What’s the difference in number of columns when different items are displayed on the same
shelf? How to create the best visual effect? What’s the most proper height of the shelf so that the consumers

can most easily reach the items? And so on. The display itself is creative work that demands the spirit of
exploration.
How MINISO makes the most of atmospherics
 The Treasure Hunt Aesthetic:

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Generally, MINISO stores are clear and stacked, labelled and shelved gives customers the freedom
to come and explore without needed guidance that reduces the hassle to ask around for anything or
from a store employee. The promptness to go in, pick a product and pay creates an environment of
ease for anyone who is short on time or just simply knows what to buy and do it without wasting
time.

 Simplistic and Minimalistic Approach:

The simplistic store design added with the minimalistic product outlook adds to the total
environment of the store being hassle-free, fun and easy. The compact variety store design is a
further plus point that allows most people to get around easier in the store and the size and
portability of products due to their minimalistic design helps the customers to grab onto products
without feeling the need to have a cart or bag.

 The Color Scheme and Lighting:

White and red are the first colors one can see and identify a MINISO store with its winking logo,
these colors play to the shopper’s psychology and promote a calm and inviting appeal to the
customers that enter any MINISO store with adamant amount of lighting. Lighting is primarily used
to create an aesthetically pleasing atmosphere for shoppers as well as for function so that shoppers
can see the merchandise and their way around the store. It also makes most customers unwillingly
visit the store and buy something even though they had not planned to do so. The clear glass panes
giving out a glimpse of items inside further instils anyone to take a look at the store and the variety
compels most to buy at least one product.

 Experiential Marketing through music:

Music is the most common atmospheric variable because it does have a major impact on a variety
of shopper behaviors and helps them live the shopping experience much better. This includes sales,
excitement, perceptions and actual time spent in the store, in-store traffic flow, and the perception
of visual stimuli in the retail store. Music is a significant variable for retailers to focus on when
deciding on the correct atmospheric variables of their store because music can actually influence a
shopper’s decisions and behaviors when they are not even aware of the music. The use of
background and foreground music can all have a significant impact on a shopper’s behavior and
purchasing decisions. Light and ambient tunes played as background music in MINISO stores is
known to be a tool for increasing sales and enhancing positive attitudes toward the store.
Background music has been known to create soothing or arousal cognitive feelings from shoppers.

 Signage:

Signage refers to the collection of signs, posters and these elements together fulfill a number of
different functions:

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(a) Organizational

MINISO uses signage to advertise the store; strengthen its image; and promote the products on
offer. It communicates their policy on various matters, such as the type of product, quality, price
and customer services.

(b) Promotional Signage

It may refer specifically to special offers. These are displayed in windows to entice the customer
into the store. For instance, MINISO stores may display large posters in their windows of products

on special offer or anything new in stock to attract more customers. This draws attention to the
products and does not get in the way of the customer peeking through windows.

(e) Point of sale

These signs are placed near the items they refer to. This is so that the customer can see the price
and other detailed information. Some of this information may already be on product labels or
packaging. However, point-of-sale signage can quickly identify for the customer those aspects
likely to be greater interest, such as whether the product is on special offer which MINSIO does by
having a display screen during billing towards the buyers who can be identified through the screen
when the product is scanned.

(f) Lifestyle Images

MINISO uses various images such as pictures of people and places to create moods that encourage
that encourage customers to buy the products. These are part of the visual merchandising that the
store uses.

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PRIVATE BRAND
The brand represents itself is Japanese, with an international design team. The reality is that all the products
at MINISO are private label. This means that the goods are sourced from Chinese factories, and the
packaging and labels are changed to reflect the MINISO brand.

PRICING STRATEGY

"Premium low prices" is the competitive mace of MINISO. Among the more than 3000 kinds of
goods in its stores, the mainstream prices are between PKR 249 to PKR 1500, and products of
the same quality is cheaper than those products on the market. MINISO's secret is "low cost, low
gross margin, low price." Its top priority is low cost.

 Low cost:

MINISO carries out a large-scale purchase, a unit of 10, 000, 100,000, million units for a large
number of orders, to obtain more voice in the procurement negotiations, to achieve quantitative
pricing, reduce the cost of procurement. Secondly, through the "buyout system", suppliers do not
have to worry about the sale of goods, completely simplifies the management of the enterprise,
reduces many unnecessary intermediate links, and greatly reduce the cost of circulation. Third, by
eliminating intermediation, products go directly from factory to store, cut off distribution links,
save distributor commissions and some marketing costs, and greatly reduce product costs. Finally,
the support of a strong logistics system MINISO has logistics centers in each province in China,
products that do not go through any level of distribution. Logistics centers focus on the aspect that
they deliver goods and distribute them quickly, ensuring efficient operation even in Pakistan due

to the efficient economic corridor, and because the goods they sell are sold out quickly, it greatly
reduces the inventory management cost of products.

Low prices:

With low-cost, plus MINISO never high-priced advertising, zero-cost marketing, let costs and
prices both reach the bottom line, coupled with the continuous creation of "fashion", the end of the
low prices to achieve real results.

PROMOTIONAL ACTIVITIES (MIX)

Before a store launch MINISO focuses heavily on creating awareness through promotional activities an
analysis of their action program from 2017 is as follows:

Action Program

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 MINISO launches a trade sales promotion campaign at major marketplaces to educate

potential consumers and generate channel support before the store and product launch.

 MINISO then focuses on creating a integrated print/TV/radio/internet campaign targeting

homemakers and professional consumers. The campaign shows how MINISO emphasizes the
good quality, unique style and trend of the reliable single dominant product.
After MINISO has established itself in the market Miniso then does not follow the traditional path of
promoting itself through costly advertisements or selling activities rather it uses the most common mediums
that are more famous nowadays, such as:

 Initially Lesser Focus on Print Media

MINISO has less focus on print media after a store-launch and does not have brochures, or ads in
newspapers and even rarely any advertisement on TV rather the posters and in-shop advertisements
are posted around the area the store exists to attract customers. Hence focus on social media

marketing is MINISO’s take on reaching larger potential customer base in shorter span of time with
reduced cost in the case it has finally established itself in the market

 Promoting Products through Social Media Marketing

Instagram and Facebook have become common mediums to promote businesses and products and
MINISO reduces advertisement cost by posting about promotional deals on social media to attract
maximum customers while bearing minimum effort and cost. Other activities on social media are
to:
o To create buzz-User-generated photo contest on social media accounts and web site

o To attract, retain and motivate customers for a pull strategy-Use advertising and mass
media promotion, word of mouth referrals, customer relationship management, and sales
promotions and discounts.

 Post-Hype Tactics
Finally, MINISO picks up the pace by collaborating with magazines and celebrities and bloggers
to create a post-hype attribute by featuring products in magazine columns or enlisting celebrities to
voice as ambassadors and show how they enjoy using MINISO products.

Joint Promotional Activity with MARVEL

MINISO recently launched its set of products that were associated with MARVEL and it created quite a
buzz as most consumers were adamant to purchase anything that provided MINISO quality with a
MARVEL theme which included toys, phone accessories, homeware and much.

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LOGISTICS, WAREHOUSING AND INVENTORY MANAGEMENT

SYSTEM

Logistics and Warehousing Strategy

MINISO has not officially disclosed how logistics and warehousing works but has given a basic strategy
that focuses on keeping low price, high efficiency good return
• Three high and three low strategy:
Compared with the traditional retail industry, MINISO creates a new product style “MINISO style” at
a low price, high quality with rich design in the sense of products to meet the needs of today’s
consumers. This strategy is called “three high and three low”. The so-called three low refers to low
price based on low cost and low margin while the three high means high efficiency, high technology,
and high quality. In order to ensure the price advantage, MINISO adopts the volume quotation system
to enhance the bargaining power of large-scale procurement. Unlike traditional retail which includes
heavy intermediate channels, MINISO implements the buyout customization which put an end to the
supplier on the possibility of a final product pricing. At the same time, once the goods are in the
warehouse, they are settled promptly according to the process in order to ensure the new arrivals in the
store every 7 days. In addition, the control of gross margin is also important. The company’s gross
profit margin is controlled by about 8%, while the gross profit in shops is controlled below 38%, in
order to guarantee the real low prices.

Inventory Management

The traditional retail sales mostly adopt the long-channel sales mode, most goods sold through the
manufacturer-agent-wholesaler-retailer layer by layer, and this kind of long-channel sales mode causes the
commodity price to be false high. Although the network retail has removed the intermediate link, has greatly
reduced the commodity price, but also exposed the quality is not guaranteed, the after-sales service is
difficult, cannot satisfy the shopping experience and so on malpractice. In order to formulate a sound sales

policy, speed up capital turnover, reduce current costs and transfer products to consumers in a timely
manner. MINISO sells its own products smoothly, and the channel of choice must be the greatest benefit

MINISO Adapting SAP Technology

Technology is the best way of improving efficiency. In 2018, MINISO cooperated with SAP to
comprehensively upgrade the enterprise management system and apply technology to upgrade the supply
chain. Ma Yutao, the vice president of MINISO IT Center explained the role of IT in the chapter of “creating
intelligence”. Firstly, it is about efficiency; and secondly, it is about experience. 98% of the world's top 100
retailers use SAP to improve efficiency. MINISO's SAP was successfully launched in the first phase, with
an investment of over 100 million, only taking six months. The new system can realize the integration
process of key business, turn stocking to ordering overseas, make stocking accurate and reduce inventory.
It also transfers the account checking process and accounts settlement from off-line to on-line, which
simplifies the process and collects funds quickly. For example, it takes only a few hours to settle the money

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rather than a week. Furthermore, the new system also provides comprehensive insight and quick response
to consumer demands, creating experience that go beyond consumers' expectations.

In SAP, the inventory management functionality revolves around the movement of materials in and out of
the storage facility and the physical count of those items at regular intervals.

Organizational Structure

In the SAP system, each storage facility is part of an organizational structure created in the system.

For inventory management, there are two organizational levels which are required to be created; the plant,
and the storage location.

 Plant:

This is a physical location in the organization where some processes take place. Sometimes these
processes involve stored material, sometimes maintenance or sometimes production.
For inventory management, a plant will be created to represent a location that receives, stores, and
issues materials.

 Storage Location:

This describes a designated area within a plant. A storage location can be a site where inventory is
held. The physical location can be a room, a row of shelves, a racking system, a refrigerated cabinet,
a trailer or a space in the plant that is identified by painted lines on the shop floor. The inventory
can be materials that are used in the production process, finished goods or maintenance items. The
storage location is the lowest inventory level in the inventory management function.

Movement of Goods

There are a number of goods movements in the SAP system, and they can be either inbound from suppliers
or the production department, outbound to customers, a transfer of stock from another plant within the
company, or an internal movement within the same plant.

 Goods Receipt:

This process can be either inbound from a supplier or can be from a company's own production
process. A goods receipt can be performed so that the materials are immediately available for use,
or they can be placed in a quality inspection hold so that the quality department can perform tests
on the items to ensure that they are within specifications before releasing them to stock. Sometimes
the goods can be placed in a blocked stock state where the company does not accept financial
liability for the materials as they were not ordered, or incorrect. In that case, the material is not
available for use.

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 Goods Issue:

The items in the warehouse can either be used in the production process or sold to a customer. In
either scenario, the items are issued to a production order or sales order which causes the stock
level at the plant to be reduced. In some instances, the material can be issued to scrap if it is deemed
unusable by the quality department, past its shelf life, or damaged.

 Internal Movements:
Material in the plant can be moved from one storage location to another before it is used in
production or delivered to a customer. There is a goods movement so that the material is moved
from the main storage area to a staging location close to where the production or delivery area is
located. Sometimes the material is moved to another plant if they need the material sooner. In that
instance, there is a plant to plant transfer of materials. One other internal movement is the transfer
posting, where a material is logically changed within the system. For example, a material that has
been received as material requiring quality inspection can be changed to material that is available
for use, by performing a transfer posting.

Optimizing supply chain means delivering to your customers what they want when they want it and
executing that by spending as little money as possible. By using SAP to MINISO has been able to achieve
an optimized inventory management.

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SWOT ANALYSIS

A more comprehensive analysis if compared globally,

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COMPETITIVE STRATEGY

 Blue Ocean Strategy

“Blue Oceans are defined by untapped market space, demand creation, and the opportunity for
highly profitable growth.” That is to say, in blue oceans, there are no mutual interferences among
competitors because the rules of the game are waiting to be set.

But how can it be explained in economics?

According to blue ocean strategy, customers think that value roots in getting higher utility at a
relatively low price, as for enterprise, value rests with obtaining higher yields with a relatively low
cost. Value innovation can only be successful when utility, price and cost are correctly integrated
as a whole. Therefore, when studying blue ocean strategy, you must analyze the relationship among
utility, cost and price.
Blue ocean strategy changes the rule of competition by remodeling the law of supply and demand,
transforming the ‘price-demand-supply-price’ in the logic of traditional competitive market into
‘utility-demand-supply-cost’ in the logic of non-competitive market. These are the core secrets how
blue ocean strategy can get their ways to success:

a) Let your sight be beyond competitors and face the requirements of the buyers.
b) Provide customers with products they can’t refuse.
c) Price your merchandise in a way no rivals can intimate.
d) Offer innovative value to untapped demand.
e) Create a satisfactory value chain between enterprises and customers.

Therefore, how does MINISO make full use of blue ocean strategy?

a) Meet consumers’ needs: the reason why online shopping is so popular among people is that
they just have to clip their mouse at home and wait for their deliveries. But what if there is a
brand that can make brick-and-mortar stores almost the same as online stores by providing the
same price as well as the same quality? In that case, it can not only satisfy customers’ daily
necessities but also their desire to go window shopping.

b) Irresistible buying reasons: the small store gathers various products such as articles of daily use,
bags, cosmetics, electrical appliances, personal cares, toys and even stationeries. Under the
theme of faddish lifestyle, the store sells everything you may need in your daily life like a
delicate grocery store.

c) Unsurpassable price: more than 3000 kinds of commodities MINISO sells, which are procured
from mostly the export enterprises in Yangtze river delta, the pearl river delta and some
overseas companies realize the ideal circulation of ‘from the factories to the stores. It enables
MINISO to emerge as a ‘dollar store’ in some exquisite shopping malls as it has a prevailing
relation to ones seen globally. The price is obviously competitive and eye-catching. The ability of

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purchasing and marketing by itself gives it a great advantage in price, which allows it to maintain
enough margin under the cost-effective policy.

d) Exploit untapped field: self-management is an important direction of the retail transforming

and also, the main route to break down homogenization and lead to differentiation. Besides, it
might be the most powerful means to change the current situation that profit is little and devote
cheap and fine products to customers.

PRODUCT HANDLING RISKS AND RETURN POLICY

In store product handling is one of the major concerns for stores like MINISO, as their SAP system is quite
efficient and does not require personal supervision that products in the store would. Even though, MINISO
aims at keeping lesser staff to manage inventory and stock it in order to reduce cost in that manner but still
keep an analysis of the risks and how to handle their store products by the following manner:

The Environment
The following characteristics of the work environment are considered:
• Space available

A lack of space to carry out manual handling may lead improper product handling and even injury
in case of handler.

• Floor

Handling loads on different working levels or on floors that are slippery, uneven or unstable may
increase the risk of accidents.

• Climate

The physical climate (temperature, humidity and ventilation) may affect the risk of product damage
and can even harm the worker or employee handling product.

• Lighting

Insufficient lighting may increase the risk of accidents when handling products. It may also make
employees work in an awkward position.

The individual

There are also some individual factors that can influence the risk involved in product handling:
• Experience, training and familiarity with the job
• Age
• Physical capacity
• Willingness to use personal protective equipment (for example, clothing and footwear).

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Risk assessment of product handling activities

Employers are required to assess the risks resulting from working tasks and activities, and analyze manual
product handling. A risk assessment is a careful examination of what in the work could cause harm to
people and product. It can then be decided whether sufficient precautions have been taken, or whether it is
necessary to do more to prevent harm. The challenge is to eliminate, or at least reduce, the potential for
accidents, injury or incorrect product placement that arise from working activities and tasks.

Simple steps can be followed to carry out an effective risk assessment in the workplace:

• Look for the hazards that could cause accidents, injuries or damage product, taking into
account the load, the task, the environment and the operator.
• Decide who might be harmed and how: evaluate the potential consequences of the hazards.
• Decide whether the existing precautions are adequate or whether more should be done; find
ways to reduce the risk
• Monitor the risks, and review preventive measures.
Prevention measures
The negative effects of manual handling can be prevented by trying to eliminate or at least reduce the risk
factors involved. The following hierarchy of prevention measures should be used:
 Elimination
First, can the work be designed and organized in such a way that manual product handling can be
avoided completely, or at least restricted.
 Technical measures
If manual handling cannot be avoided, automation, mechanization and the use of lifting and
transport equipment should be considered.
However, attention should be paid to ensure that new work risks are not created
 Organizational measures
Organizational or administrative measures should only be considered if elimination of manual
product handling is not possible, and if technical measures are not effective in reducing the risks
involved in manual handling.
 Provide information and training to workers
If workers have to carry out product handling activities, they should be informed of the risks of
accidents, particularly concerning their specific tasks.
They should also receive training on correct handling techniques.
Return Policy
MINISO in Pakistan clearly states that no product can be returned and they have an integrated check-out
system that records a product at checkout as sold and cannot be placed back again in the unsold inventory.
This has created discord among customers as MINISO did not properly advertise this aspect when shoppers

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entered the store but now the checkout employees have been trained in personally asking customers about
their purchase to make sure they don’t buy anything they don’t intend to pay for or take home.

OMNICHANNELS

MINISO has a belief that physical stores are a more experiential form of buying rather than buying online
and their store aesthetic is strong suit, but due to the changing global trends of online shopping and need
for an online store MINISO has focused on joining up with DARAZ. It’s own website is more or less of a
walkthrough of the brand profile and what products it encompasses rather than an integrated network that
shows prices and variety altogether as their appeal to “Brick and Mortar” stores that resonates with the
physical store aspect they project they still have focused on partnering with DARAZ as MINISO understood
that most homemakers in Pakistan find it more relatively easier to order online than to make a trip to the
store and with the added aspect of product being received by an individual who lives in an area that does
not have a physical store it is much more favored.

CUSTOMER SERVICES

MINISO has lesser staff for customers to walk around and experience the store themselves but it does not
focus lightly on Customer Services:
In-Store Customer Services
o Product Testers and Samples

The stores have products that are mainly packaged and cannot be opened before purchase,
but MINISO has testers and samples that gives consumers the idea of how the product
might satisfy what they perceive it would give them in terms of value and price which
ultimately leads to a much happier purchase.

o Employee help when needed

Stores have employees that mostly focus on maintaining adequate product stock and store
operations but are there for any form of assistance required as all customers are different,
some might just know what product they are purchasing and some might want the store
employees to help them recognize what they actually need.

o Billing Screen
During checkout the customers are able to see a billing screen for them to observe what
they have bought and the prices along with tax are displayed so that inconvenience during
payment is not created.

Online Customer Service

MINISO does not have any email or contact number on site rather it has contact information for those who
seek to purchase a franchise, or propose a business idea or consider employment.

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Retail Management Report on MINISO

CSR ACTIVITIES

MINISO does not have a strong relevance to CSR but its focus on creating a better environment for people
through its products captures the philanthropic note of its goals as an organization.

Back to Nature Philosophy

MINISO pursues a simple & natural life philosophy, and focuses to design and manufacture excellent goods
at honest prices, taking into account of earth resources, environment, recycling, and other issues, and thus
truly return to nature and the essence of the product.
MINISO is not only a brand but also a way of life. It does not emphasize the so-called fashion or personality,
and would not consider that popular brands should be raised their value. On the contrary, MINISO stands
on consumers’ point of view when developing products, which is - back to the essence, and returning to
nature.
MINISO focuses on enriching lives with a wide range of products at reasonable prices. It is like a compass,
pointing to the "basic" and " natural" directions by providing simple and natural products.
Sticking to the life philosophy of “simplicity, nature and good quality” and the brand proposition of
“returning to nature”, MINISO focuses on life supplies with aesthetic beauty. With the core values of
excellent product design, high cost performance and comfortable shopping experience, MINISO gains
popularity among consumers, which sets the personalized consumption trend in the household market.
MINISO advocates the philosophy of quality life and in the brand spirit of “respecting consumers”,
dedicates itself to providing customers with products of “high quality, competitive price and creativity”.
MINISO earns love from the major consumers aged from 18 to 35 due to its simple and quality features
and keeping pace with consumption trend.

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RECOMMENDATIONS AND SUGGESTIONS

 MINISO needs to focus on developing a return policy that enables customers to return an item
which adds to being a good after sales service, in which MINISO also lacks.

 MINISO stores all are not alike; one store may encompass a certain variety of certain category of
products and the other may contain another. Yes, it is acknowledged that it is a variety store but
most customers suppose that all stores might carry a certain product that they are looking for and
when one does not find it in one store after previously surveying and finding it in a previous store
in a different locality, can lead to a less satisfactory outcome. MINISO needs to set up a systematic
stocking process to place products that all stores should have at the same time.

 MINISO’s pricing strategy is being affected by the increasing taxation and their “premium low-
price” motto is being set aside as prices are not falling in a low pricing segment which causes most
customers to refrain from purchasing as they want to buy on a budget. MINISO needs to
reconsider their pricing strategy if they plan to retain more customers.

 Most MINISO cosmetic users in a Muslim country like Pakistan have concerns regarding whether
the products are Halal or not, as it is an international brand and manufacturing occurs outside
Pakistan. MINISO should clarify this concern to help customers retain their confidence in the
brand.

 MINISO lacks a omnichannel and have DARAZ as a front for an online store, what most customers
have an issue with is that MINISO’s website is not having any detail on the price or availability of
products and most people who want to analyze any product before buying it want some form of
online information and if their official site gives away such information most customers will refer
to it more.

 Should focus on online customer services as their site only exhibits information of contact for
those who want to be potential franchise owners or seek employment.

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