Property

MINISO's Advantages in the Retail Industry Clear in the Market of Tanzania after Entering the Scene

DAR ES SALAAM, Tanzania, July 10, 2018 /PRNewswire/ -- Since entering the Tanzanian market in January 2018, MINISO Tanzania has done remarkably well. This is due to the "blue ocean" nature of the market in the country, as well as other factors, including the economic development and characteristics of the African and Tanzanian retail markets, the competitive advantages of brands and the objective evaluation of local consumers. Similarly, there was a vacuum when it came to the style of store MINISO offers.

Tanzania is a strong economic power in East Africa, with annual GDP growth of more than 5.5% over the past decade. From the perspective of the retail market, Tanzania has recovered from years of brand competitions in previous years, and has entered a state of recuperation. Likewise, in terms of competition, MINISO stands out from the crowd.

"Competitors? MINISO has clear brand positioning, which caused a copycat wave in the local market to a certain extent. Africa is our blue ocean market, and we only have followers but not rivals," said Wallace Li, director of MINISO Tanzania.

MINISO Tanzania stores
MINISO Tanzania stores

With the economy forecasted to grow by 7.2%, Tanzania's retail market has huge potential.

The state of economic development is crucial to the development of retail. Africa is the continent with the largest concentration of developing countries, and its economic development has drawn increasing attention from the world. As for Africa's economy in 2018, consumption and investment are the two main driving forces of economic growth.

Africa's economic development cannot ignore the "inside" and "outside" factors: on the one hand, it is relatively peaceful and stable in Africa, with few wars or political problems, which allow its nations to focus on their resources to promote economic development; on the other hand, foreign investment keeps pouring into the African market, creating employment opportunities and stimulating the overall consumption capacity of the society, thus boosting economic growth. Rich natural resources, rapid growth of local market, abundant labor forces, economic and social development in various fields, these are the key factors that major economies such as Europe, the United States, China, Japan, and India accelerate their pace of globalization and actively explore the African market.

Tanzania is an east African country with rapid economic development. According to the World Bank's economic outlook brief released last year, Tanzania will be one of Africa's fastest-growing economies by 2018, after Ethiopia and Ghana. The World Bank expects that Tanzania's economy will grow by 7.2% next year.

According to the report by PwC (PricewaterhouseCoopers), Africa has a population of over 1 billion, and its expected to rise to 2 billion by 2050. The labor force in Africa is growing even faster than its growth of total population, thus boosting consumption in the region. Benefiting from population and consumption growth, the African retail market has huge growing potential. Tanzania, in particular, has been described as one of the 10 African countries with the greatest potential for retail market growth.

Why could MINISO surpass a group of competitors in the local market?

With the influx of a large number of foreign capital and the continuous upgrade of global consumption, the consumption in Africa is becoming increasingly internationalized, and people's purchasing behaviors are changing and upgrading at the same time. Therefore, consumers will tend to live more healthily and raise awareness of brands. Based on that, MINISO, the Japanese designer brand has introduced the concept of "quality life" to Tanzania, providing customers with "quality, creativity and low-price" products.

Wallace Li, the director of MINISO Tanzania expressed that since MINISO was established on January 28, 2018, two MINISO stores located in Dar es Salaam, Tanzania's former capital and political, economic and cultural center, have opened. Although the number of MINISO stores is not that large at present, they enjoy a good reputation among consumers, and the overall market performance has excited the brand. Wallace also indicated that the monthly turnover of MINISO stores reached up to 240 million Tanzanian shillings (about RMB 700,000), which ranked first amongst similar types of retailers in the mall.

As a result of the popularity of MINISO stores, many imitators of MINISO have mushroomed, but most of them failed in the end. Why? Because MINISO has a clear market positioning and advocates for providing global consumers with "high quality and low-price" products and good services, whose unique business model cannot be easily imitated.

Demand for goods of consumers around the world is basically the same, good quality and low prices, while varying slightly from country to country. Through the actual market survey, the director of MINISO Tanzania found that there is a large gap and serious polarization between the rich and the poor in the African market, thus the target consumer of MINISO has been defined as the group of consumers with permanent jobs.

"The blue-and-white collar workers and the upper-middle class can match the price system of our products, and even our employees like MINISO products very much. Consumers in Asian markets tend to be 15-35 years old, while those in Tanzania and Africa are 25-45 years old," said Wallace.

Not only do the age groups of consumers differ a bit, but cultural differences in each country and region can also result in different hot sale items in the local market. In Tanzania, MINISO's fashion accessories topped the list, and digital accessories, articles of daily use, and toy series are also popular with local consumers. In addition, as the local certification of health and beauty products is released recently, the sales volume of other categories such as massage tools and cosmetics are also rising rapidly, which will gain popularity from consumers to a large extent.

As for the future development of MINISO in Tanzania, the brand will firmly establish cooperation with local partners in 2018 to develop the local retail market with local capital.

MINISO has won praise for its reliance on products to enable consumers to build brand awareness independently.

MINISO products are favored by young consumers because of their simple, natural and good quality. The price of MINISO products is mostly between $1.5 and $30, which is within an acceptable range for most consumers. The most direct and objective way to understand the position and recognition of this brand in the retail market is through consumers, clients and even peer businesses.

The feedback of Tanzanian consumers to MINISO is mostly positive, such as "a wonderful shop" and "candy shop to a girl". Customers commented on GOOGLE maps that it was "the best budget friendly products found literally nowhere else." That brand awareness mainly comes from products. Most consumers feel that MINISO provides consumers with products of a strong sense of design and good quality, which is reliable and affordable, thus they are happy to shop in MINISO. Furthermore, even the peer businesses could not help but praise MINISO's business model and services, commenting that MINISO was an "unforeseen business mode". That is the reason why the the director of MINISO Tanzania said confidently that: "We have followers but not competitors."

MINISO has expanded globally since its establishment in 2013. It has opened more than 3,000 stores around the world within 4 years, reaching cooperation agreements with partners from more than 70 countries and regions with sales revenue exceeding USD1.8 billion in 2017. In the process of MINISO's global development, Tanzania is an important part of the region of the African continent. With the development of social economy and the acceleration of urbanization, the consumer group in this area is expanding and the purchasing power is increasing, thus the retail market of this country has undoubtedly great growth potential.

Photo - https://photos.prnasia.com/prnh/20180709/2181842-1