June 26 (NBD) -- Chinese budget consumer goods retailer MINISO plans to go public to raise around 1 billion U.S. dollars, reported Bloomberg citing person familiar with the matter.

The initial public offering (IPO) is to take place in Hong Kong or the United States, but the timeline for listing hasn't been decided, the person disclosed.

The company responded that it actually started the IPO project and employee stock incentive plan at the brand strategy conference held last January, when it expressed the intention to draw capitals through diverse channels.

Photo/Wang Fan (NBD)

As a fast fashion brand founded in 2013 by Japanese designer Miyake Junya and Chinese entrepreneur Ye Guofu, MINISO sells household and consumer product priced mainly between 10 yuan and 100 yuan.

National Business Daily noticed that MINISO's cost-effective goods have won consumers globally. As of 2018, the chain has opened over 3,500 stores across 79 countries including China, Russia, Singapore and the United States, hiring more than 30,000 employees. Data from MINISO show that the annual customer flow for its shops approaches 1 billion, and the number of purchasers tops 300 million.

The rapid expansion is partly fueled by its franchise business model. The model requires franchisees to pay royalties, store rents and decoration costs, and the first payment for goods, and MINISO offers store operations, staff recruitment, and commodity distribution, which helps the retailer achieve significant cost savings.

The fast growth has made MINISO a favorite of investors. In September of last year, the company received funds of 1 billion yuan (145.6 million U.S. dollars) from tech behemoth Tencent and investment firm Hillhouse Capital.

MINISO posted a surging income in the past two years. Ye Guofu revealed at the annual meeting this January that MINISO reaped revenue of 17 billion yuan last year, compared to 12 billion yuan for the previous year.

To further boost sales, MINISO announced in September last year it has teamed up with JD's logistics unit JD Daojia to provide in-city delivery service for 800 MINISO stores across 33 major cities in China.

Positioned as a brand to create simple life, MINISO has been frequently compared with Japanese consumer goods retailer MUJI. Some insiders believed rising MINISO has become a challenger that MUJI can't ignore. 

But it is noteworthy that MINISO has long been criticized for infringement and been tangled in several copyright disputes. 

From 2013 to 2015, the company's brand agent was involved in 65 legal cases. Morever, in March 2018, household brand NOME filed a lawsuit against MINISO over trademark infringement. Later in October of the year, the two-year infringement case between MINISO and illustrator Bai Guan ended with an official apology from the retailer. At the end of November 2018, Shen Wenjiao, founder of furniture brand PIY, published an open letter to Ye Guofu accusing MINISO of law violations.  

Email: lansuying@nbd.com.cn