Author: Yi Ran
From ah ah ah to famous brand, ye Guofu’s “ten yuan store” rushed to NASDAQ.
On September 24, Beijing time, mingchuang Youpin officially submitted its IPO prospectus to the US Securities and Exchange Commission (SEC) and intends to list on the New York Stock Exchange under the code of MnSO. The IPO underwriters are Goldman Sachs and Bank of America Securities.
China’s largest “ten yuan store”
According to the prospectus, in 2019, Gmv (transaction amount of website) of mingchuang Youpin will reach RMB 19 billion, and the revenue will be RMB 9.394 billion.
According to the prospectus, mingchuang Youpin has 11 categories and about 8000 core SKUs, and it is promoted at the rate of increasing more than 600 SKUs a month. More than 95% of its products are priced below 50 yuan in the Chinese market.
At present, mingchuang superior products are still in a loss state, with a loss of 290 million yuan and 260 million yuan in 2019 and 2020 fiscal years respectively.
Sales and distribution expenses are an important expense of the company, increasing from RMB 818.3 million in fy2019 to RMB 1190.5 million in fy2020. The reason for the increase is the expansion of CO brand cooperation, and the authorization fee has increased from RMB 21.9 million to RMB 109.5 million.
As of the first half of this year, mingchuangyupin has established brand cooperation relationship with intellectual property licensors of 17 famous brands such as marvel, Disney and Hello Kitty, and has provided about 2300 core SKUs of joint brands.
However, as a low-cost retail store, the gross profit margin of mingchuangyu was 26.7% in fy2019 and 30.4% in fy2020, which was well controlled.
In September 2018, mingchuang Youpin won the investment of 1 billion yuan from Tencent and Hillhead capital, which is the first time that it has introduced external investment. According to the prospectus, Tencent and Hillhouse capital each hold 5.4% of the shares, and the founder Ye Guofu holds 80.8%.
Mingchuang Youpin plans to raise $100 million this time, which will be mainly used to expand global stores and retail networks, upgrade warehousing and logistics networks, and further enhance digital operation systems.
Although the specific timetable for listing has not yet been set, public opinion is generally optimistic about listing.
The famous and excellent products are also co founded by Ye Guofu and Japanese designer Miyake Shun, and follow the Japanese design style. Since the first store in China was opened in Guangdong in 2013, mingchuang high-quality products has maintained a very fast opening speed, which is known as the largest “ten yuan store” in China.
After “blooming everywhere” in China, mingchuangyipin began the journey of “going to sea”. However, this expression is not accurate enough. After all, famous creative products were first registered in Japan, and the publicity was also “Japanese fast fashion”. Maybe the global expansion now should be “reverse going to sea”.
At present, there are 4200 stores in the world, more than 2500 stores in the Chinese market and 1680 in the overseas market. According to the financial report of fiscal year 2019, the revenue contribution rate of overseas market is 32.7%.
According to the report of Frost & Sullivan, the global private brand comprehensive retail Gmv is 52 billion US dollars, and the Gmv of mingchuang superior products is 5.2% with 2.7 billion US dollars, which is the largest private brand comprehensive retailer in the world.
In January 2019, mingchuangyoupin has set the medium-term target of entering 100 countries and regions in the world, expanding the number of global stores to 10000 and the scale of revenue exceeding 100 billion yuan by 2022.
Although the global outbreak of Xinguan has disrupted the plans of various brands, mingchuang superior products have not stopped. Ye Guofu even “bucked the trend” in April this year, saying that it had raised the target of 600 stores within the year to 1200.
Only do low price explosive products
“Welcome to miniso! Japanese fast fashion brands… ”
When this white, clean and transparent offline retail store of Japanese style appeared in the public’s view, many people even misunderstood that mingchuangyu was the sister store of Muji, but the price was much cheaper. Of course, some people will directly blame this as a “Shanzhai store”.
As a “domestic product” designed by Japanese and made in China, the predecessor of mingchuangyu is a jewelry chain store that sweeps the streets with pink.
Relying on the magic weapon of “fast fashion + affordable chain”, ye Guofu made a name in the retail industry very early. In 2012, alas, there were more than 3000 stores across the country. In his interview, he also called out the heroic words of “A-share listing in 2013”.
However, the rise of online shopping has made the life of offline shops difficult.
After years of hard work in the retail industry, ye Guofu has long been aware of the crisis. He frequently visits and studies in the United States, Denmark, Japan, South Korea and other developed countries.
After the rise of online, consumers will naturally have higher requirements for shopping experience when they choose Offline. At that time, ah Ya proposed to complete the fourth generation of shop bidding and design upgrade. This time, ye Guofu turned his eyes to Japan. The Japanese style of small fresh and exquisite design feeling is favored by young consumers.
In Japan, most of the 100 yuan boutiques in cities are made in China, but it is difficult to buy the same quality products at the same price in China. “12 yuan to buy such a good thing, not to mention in Japan, even in China will be sold out.”
“High quality, low price” products are always attractive to consumers.
Ye Guofu decided to “start a second business” and weaken the management of the well-known ouah ah ah. He chose to create famous and excellent products together with Japanese designers, and used a brand-new image to stand the test of the market.
Ah ah, it’s jewelry. Famous and creative products are life aesthetic products. They cover a wider range, but only do “explosive products”.
Although the design is Japanese style, ye Guofu’s retail learning object is not Muji. Ye Guofu has always praised Costco’s supply chain efficiency, product selection, pricing strategy and its reputation among consumers. “We want to make a mini version of Costco, the essence of which is high quality and low price, and single product is popular”.
He led his team to visit Costco’s US headquarters. Based on his past experience, he summed up the “three high and three low” playing methods for mingchuangye, namely, “high appearance, high quality and high efficiency; low cost, low gross profit and low price”.
In terms of design, mingchuang superior products have carried out a comprehensive control over commodities, except for food, all of them are private brands. Looking for export products factory, let the supplier also deeply involved in product design, direct order procurement. The most popular item in mingchuang boutique is the “mingchuang ice spring” of conical bottle. Ye Guofu is proud to introduce that it took three months to open the mold during the design.
Ye Guofu is very clear about the problem that upstream manufacturers in the supply chain are concerned about – account recovery. In order to attract large OEM factories and well-known brand suppliers, he personally came out to discuss business with manufacturers, “one-time order of one million or ten million, and cash settlement.”.
In 2018, mingchuangyupi cooperated with IBM to build a global business operation service platform with SAP as the core system. Through big data decision-making and analysis, it launched a comprehensive digital transformation and realized integrated and refined operation. The circulation time of famous, creative and excellent products is only 21 days.
Therefore, it is necessary to choose a low profit rate of 8% in the commercial area.
In order to achieve the necessary speed of store expansion, famous and innovative products realize asset light operation, and adopt the operation mode of partnership system. The investors rent and decorate the stores, and the famous creative products carry out unified distribution and sales management. The franchisees can get 38% of the turnover (33% of the food products).
According to the prospectus, the return period of a single store is generally 12 to 15 months.
Hidden dangers behind prosperity
Ye Guofu also firmly believes that his enterprise in recent years is the representative of consumption upgrading, rather than consumption degradation: “consumption upgrading is to let people spend less money to buy better products, rather than spend more money on better products. The latter is the consumption habit of the past.”
“Traditional e-commerce basically has to pay a lot of advertising and traffic fees, but in fact, the wool comes from the sheep.” Ye Guofu thinks, “our store itself is a huge flow entrance.”
Mingchuang high-quality products provide a learning template for all enterprises that think “offline is dead”. The scene consumption experience of physical retail cannot be given to consumers by e-commerce.
In the past, the annual online revenue of mingchuangyoupin accounted for less than 1%. However, under the influence of the new epidemic, affordable and diversified distribution channels are particularly important. Although Ye Guofu had positive expectations for opening stores in April this year, the current data show that the number of stores of mingchuang high-quality products has hardly changed this year.
In the prospectus, Minchuang also reflected the concern: “the inability to continuously meet the changing expectations of online shoppers may put us at a competitive disadvantage.”
This year, ye Guofu put forward the concept of “new community e-commerce” — create community services based on offline stores. Each store serves the consumption of household goods within 3 km around the store, and cooperates with SF to launch “intra city express”. Relying on the wechat marketing ecology, online famous and innovative products distribution fission small program is launched to enter the private domain flow, enhance the stickiness of members and improve the repurchase rate of customers.
Next, ye Guofu wants to develop “famous and innovative stores”. Compared with the past, it is a kind of light franchise store, trying to do secondary distribution, creating a life Butler.
However, he stressed that the logic of famous, innovative and high-quality products is different from that of traditional e-commerce, which combines local life services and needs to be supported by high-density physical stores directly to consumers, rather than through a third-party e-commerce platform.
Ye Guofu’s goal is to increase the proportion of online sales of famous and excellent products to 10% within the year.
“During the epidemic period, the new products we launched were 20% – 30% cheaper than before. The more careful the consumers are, the more we need to provide consumers with products that exceed expectations, and there is no shopping pressure. ”
At the same time, famous creative products also need to face and deal with disputes. The most direct negative effect caused by blindly controlling costs is the quality of products.
In recent years, a “one step peeling nail polish” has been found to have a concentration of 589.449 g/g, which is more than 1400 times the national standard limit. In response, mingchuangyoupin said that although it disagreed with the test results, it respected the opinions of the regulatory authorities and completely removed and destroyed the relevant products.
The unwillingness to face up to the wrong attitude has aroused public dissatisfaction, and some consumers have questioned the reputation of brand spokesmen.
Despite the increased investment in design and copyright, the label of “Shanzhai design” has not been completely removed. According to the company’s data, there were 22 disputes involving the design patent right and trademark exclusive right.
In addition, fenlibao, a P2P platform with the “blood transfusion” mode of mingchuangyupin, shut down its server in August, which attracted much attention. Mingchuang Youpin has stripped off the Internet finance related business this year, which is also regarded as paving the way for IPO.
From the public opinion controversy at the beginning of its establishment, commentators despised it, and now it goes straight to NASDAQ, becoming the leader of the global private brand retail industry. Famous and excellent products rely not only on Japanese style, but ye Guofu wants to understand the new retail logic of “ten yuan store” and implement the idea in place.
And these hidden dangers behind the prosperity may become the butterfly that causes the storm. Although the “ten dollar shop” is small, it is not simple. Ye Guofu wants to make the “ten yuan store” business to the extreme, there are still many problems to face up to.