China's Retail Revolution : a new wave of global expansion

When Bosideng opened just off Oxford Street in London back in 2012 many analysts forecast that it was the start of a Chinese wave of retailers coming to Europe.

And yet it never really happened. Bosideng remains and reopened a renovated store in 2022, but has not expanded, and China’s retail presence has mostly been felt online, starting with Alibaba and JD.com .

However, China’s retail brands are beginning to make an impression around the world. Miniso, a value driven East Asian lifestyle offer, had built a cult youth following but it was from a strategy to launch ‘super stores’ in major cities last year, including flagship locations in Guangzhou, Hangzhou, Shanghai, New York and London, that its modest ambition to become a “lifestyle superbrand that gives joy to clients all over the world” really exploded.

The company’s global store network shot past 6,000 as of the most recent update from September 2023, at which time Miniso had 3,802 locations in China and 2,313 stores in overseas markets, of which there are now over 100, including a recent launch this year in Hong Kong.

At the time of its last update, Miniso was expecting to add another 100-200 new stores on a net basis in China before 2023 concluded and is targeting the opening of between 350 to 450 stores in overseas markets this year.

The stores in its new wave of flagships are a vibrant pink throughout, and offer more than a thousand lifestyle products, as well as featuring specific product zones including its TikTok-famed blind boxes, plus homewares, plushies and lots more.

Likewise, online marketplace Temu set out its global ambitions during the recent Super Bowl, as it aired six prime time ads and offered $10 million in giveaways as it attempted to seduce a huge national audience to “shop like a billionaire”.

Temu is officially incorporated in Delaware and headquartered in Boston, in the US, although it is owned by the global commerce group PDD Holdings, and is the sister site to domestic e-commerce platform Pinduoduo. PDD Holdings was founded in 2015 and relocated its headquarters to Dublin, Ireland in 2023.

This, along with leveraging low cost manufacturing and cheap labour in China, has helped to keep Temu’s operational costs, and therefore product prices, super low.

However, some analysts have expressed concerns about the sustainability of Temu's jacked-up marketing and the loss leaders it delivers to shoppers; some reports put the cost of such efforts between $2 billion to $3 billion in 2023, as Temu seeks to drive its rapid and aggressive expansion in more than 45 countries within a year.

Comparisons with Shein are inevitable, although the latter has remained as a manufacturer of fashion and accessories, and which has started to take store space within partner business Forever 21 in the US.

Shein has operated pop-ups before, but the venture with Forever 21 through its tie-up with mall giant Simon Properties and the Authentic Brands Group represents a far more serious commitment to physical space.

It’s taken a while, but China’s retail industry has arrived.

PHOTO CREDIT: Miniso