Miniso stock declined due to weak domestic demand as the firm plans to expand overseas stores this year to offset the local downturn.
The Chinese retail firm’s stock closed Friday’s session by sliding -0.40% to $24.69 apiece. However, it recovered losses in the pre-market trade and surged by 2.88% to $25.40 per share.
Miniso strategically plans to open 600 overseas stores and approximately 400 outlets in China this year, marking a significant shift from its 2019 performance.
The company’s plans mirror Beijing’s firms’ pursuit of growth abroad as the nation grapples with enhancing domestic demand.
Moreover, the declining cost of products produced in China’s factories makes them more competitive overseas.
According to Miniso’s CFO, Eason Zhang, customers’ behavior was influenced by projections for future earnings and economic hopes, creating headwinds for firms in China.
Zhang acknowledges the challenges posed by the new normal of the Chinese economy. Also, he buoyed up that the company is adapting to this phase of slower but more sustainable growth.
Meanwhile, reports show that by the end of 2023, Miniso has over 4,000 outlets in most big cities in China and nearly 2,500 abroad.
Chinese Shoppers Offset Miniso’s Sluggish Demand
Zhang highlighted the impact of Miniso’s domestic demand slowdown, offset by Chinese consumers trading down from more costly retailers.
He also said that shoppers are logical as they purchase in malls and other places, which benefits the retailer.
Zhang noted that Miniso’s outlook differentiated it from Chinese competitors, focusing globally on unbranded cheap products.
Meanwhile, the Guangzhou-based retailer has projected that markets abroad will account for greater than half of its sales in the next two to three years, better than over 35.00% in the previous year.
The CFO revealed that the firm acknowledged promoting the country’s culture as part of its social responsibility by integrating Chinese design into its items.
