Miniso and lululemon continue to grow and gain popularity abroad; Nike cuts its virtual digital business | Brand Weekly Report

Organized by He Zhexin

Big News

MINISO's Gross Profit Increases by 45%, Ye Guofu Says to Enter Malaysia First for Overseas Expansion

The first batch of MINISO products to go overseas is now enjoying the fruits of victory.

Recently, MINISO released its financial report for the third quarter of 2024. The report shows that the total revenue of MINISO Group in the third quarter increased by 19.3% year-on-year to 4.52 billion yuan. The company's overseas revenue increased by 39.8% year-on-year to 1.81 billion yuan. The gross margin for this quarter was 44.9%, up 3.1% from the same period last year, reaching a historical high.

Ye Guofu, the Chairman of the Board and CEO, said at the press conference after the financial report, "Blindly pursuing low prices is irresponsible to everyone. Without a reasonable price, there is no guarantee of product quality. Without reasonable utilization, it is difficult for the enterprise to continue to innovate." He also mentioned that for domestic enterprises to go overseas, they should "go to Southeast Asia first and then to Europe and the United States". Among Southeast Asian countries, they should first capture Malaysia, which has the largest number of Chinese. "If you can't do well in Malaysia, I suggest you not go global."

In 2015, MINISO opened its first overseas store in Southeast Asia. In the first half of 2024, the global stores of MINISO Group exceeded 7,000. As of September 30, 2024, the global stores of MINISO Group reached 7,420, with 859 new stores added in the first 9 months of 2024. The net increase in the number of stores of MINISO overseas and TOP TOY in the first 9 months of 2024 exceeded that of the entire previous year.

MINISO is promoting more sub-brands globally. On October 19, the company's trendy toy brand TOPTOY opened its first store in Thailand, officially challenging Pop Mart.

lululemon Continues to Rise, Thanks to the "Middle Class" in Chinese Counties

lululemon's decision to go to Chinese counties has proven to be correct.

In the third quarter of fiscal year 2024, the net revenue of this Canadian sports brand's business in mainland China increased by 39% year-on-year, and the comparable sales also increased by 27%, remaining the region with the fastest global growth rate for several consecutive quarters.

In the fourth quarter of 2022, lululemon listed mainland China as a separate region in its financial report. According to the company's previously released growth plan, the number of lululemon stores in China will increase to 220 by 2026. According to the official website, the number of lululemon stores in mainland China (including duty-free and pop-up stores) is 162.

In October, lululemon's Chief Executive Officer Calvin McDonald flew to Shanghai for a three-hour meeting with analysts, and along with his deputies, described how the strategy of tailoring products for the local market has been effective. General Manager Ng said that up to 35% of China's sales come from products tailored for the Chinese market.

In contrast to its success in China, the North American market continues to slow down, with net income increasing by only 2% in the last quarter. Analysts generally believe that lululemon's weakness in the United States is mainly due to competitors seizing market share, coupled with continuous inflation suppressing demand. The company lowered its full-year sales forecast in August.

New Arrivals, Brands

LV Launches Jingdezhen Gualeng Doucai Xiangyun Tea Set Box, When "Vulgar" Meets "Elegant"

The largest luxury brand under LVMH, Louis Vuitton, continues to explore the taste of China's "old money".

According to FashionBiz, Louis Vuitton recently collaborated with He Xin, the curator of Jingdezhen Shangci Guanyao, to officially launch the Gualeng Doucai Xiangyun series, which is stored in LV's unique tea set box, with the necessary tea utensils placed inside. The Gualeng Doucai Xiangyun series designed by He Xin combines the tea-drinking habits of the East and the West. The tea utensils are mainly in green and gold, using the traditional ceramic cloud pattern design, with blue and white dots as the base color, and covered with gold dots to convey the traditional auspicious meaning. The Jingdezhen Gualeng Doucai Xiangyun Tea Set Box consists of a total of 21 pieces, including the Louis Vuitton tea box, teapot, pot stand, fair cup, water bowl, six tea cups and saucers, tea towel, tea scoop, tea needle, and tea brush.

Continuing to Upscale, ZARA Launches Thousand-Yuan Skiing Series

ZARA is actively competing for the winter market with thicker profits than down jackets.

Recently, this Spanish fast-fashion brand officially launched the skiing series to layout the winter market. This series mainly includes alpine skiing suits, covering items such as jackets, jumpsuits, down jackets, ski goggles, gloves, helmets, ski socks, and ski boots. The prices range from 169 yuan to 1,599 yuan, and are currently available through official channels.

ZARA's upscaling has been highly effective. The 2024 semi-annual report released in September shows that the revenue was 18.1 billion euros, an increase of 7% year-on-year; the profit reached 2.8 billion euros, an increase of 10% year-on-year. Deutsche Bank analysts are optimistic about the third-quarter report to be released on December 11.

ZARA Anfu Road Pop-up Store

Marketing Matters

Crocs Collaborates with Former YEEZY China Designer Ding Yun Zhang to Launch Co-branded Shoe Models

One of the "Three Ugly Shoes", Crocs, is becoming more and more trendy.

Crocs announced the official launch of the collaborative shoe model Diffuser with Chinese designer Ding Yun Zhang.

Ding Yun Zhang graduated from Central Saint Martins College of Art and Design (CSM) and comes from the YEEZY team. Ding Yun Zhang has also collaborated with Adidas on multiple co-branded shoe models. According to Hypebeast, the design inspiration for this shoe model comes from aerodynamic sports cars, aiming to pay tribute to Crocs' classic sandal Swiftwater. It retains Crocs' signature toe ventilation holes, features a shoelace system to shape a one-piece contour, and uses an all-white appearance as the first colorway.

There are more and more examples of international brands collaborating with Chinese designers. Xiao Jiale, the Chairman of Adidas Greater China, previously stated that they will continue to increase the "Chinese Design" products. Adidas' global CEO Kasper Rorsted also said that the proportion of products created in China will reach 70% in 2024.

what’s more

Nowa Coffee and Cotti Coffee Successively Launch "Shop-in-shop"

Constrained by costs, catering brands are starting to find "partners" to open shop-in-shop stores. According to Hongcan.com, recently, Nowa Coffee and Cotti Coffee have successively announced the launch of the "shop-in-shop" expansion model, implanting regular stores into the stores of other partner brands, and respectively announcing plans for 10,000 stores and 50,000 stores. Hongcan.com believes that reducing costs and increasing efficiency has become the top priority for the development of catering brands. For chain brands, the low investment and low cost of shop-in-shop stores place a smaller burden on franchisees, which is conducive to attracting more franchisees to join.

Bulgari CEO Says It Will Strengthen the E-commerce Business Layout in the Chinese Market

Luxury brands that have slowed down store openings are starting to accelerate their online business. Jean-Christophe Babin, the CEO of BVLGARI, recently stated that due to the weakened demand for luxury goods in the Chinese market, the brand will expand its business in India in the future to take advantage of its strong growth and favorable demographic structure. He also revealed that in the next two years, Bulgari will strengthen its e-commerce business in China to reach more luxury customers in smaller cities, rather than opening new physical stores. It is worth noting that Jean-Christophe Babin downplayed the impact of the slowdown in the luxury industry's growth, stating that the relatively weak performance this year is partly due to the comparison with the exceptionally strong 2023, when demand was driven by consumers' savings accumulated during the COVID-19 lockdown.

Nike's New CEO Cuts Business and Shuts Down Virtual Sneaker Brand RTFKT

The world's largest sportswear brand, Nike, announced that it will close its digital sports shoe company RTFKT. This move is part of the business focus adjustment by the new CEO Elliott Hill. Nike disclosed in a statement on Monday that RTFKT will cease operations by the end of January 2025.

Since Elliott Hill took over in October, Nike has been making leadership adjustments but has not yet announced a specific turnaround strategy. The investor day event originally scheduled for November has been postponed to December 19. It is understood that RTFKT was acquired by Nike for an undisclosed amount during the metaverse and NFT boom in 2021 and launched digital shoes for shoppers to purchase. At that time, Nike's former CEO John Donahoe said that this move was aimed at expanding Nike's digital influence and capabilities.

Hermès Raises Prices, and the Birkin Bag Will Exceed 100,000 Yuan

Hermès continues to raise prices. It is reported that the price increase will start in December, with an amplitude of approximately 6% to 12%. The price of the Birkin handbag will exceed 100,000 yuan, and the price adjustment of all products will be completed before January 1 next year. Hermès' revenue in the third quarter increased by 11.3% to 3.7 billion euros at constant exchange rates, slightly higher than analysts' expectations of 11%. The revenue in the first three quarters increased by 14% to 11.2 billion euros at constant exchange rates.

H&M Enters Douyin with Full Categories

After entering Pinduoduo, H&M has recently officially landed on the Douyin platform, opening another online retail channel. The brand stated that with the rise of live shopping and the younger consumer group, the fashion industry has ushered in an unprecedented transformation. After observing the unique advantages of Douyin in content ecology, social attributes, young user base, and user activity, the decision to continue to expand the online channel was made.

(Reference: Hypebeast, US Stock Investment Network, FashionBiz)