A Thrilling Business Gamble

Looking back at Miniso's growth, from its establishment to its successful listing on the capital markets and its brave steps towards internationalization, each milestone has been accompanied by doubts and ridicule from the outside world. Yet, precisely, these seemingly adverse voices fueled Ye Guofu and his team to keep pushing forward. Amidst the waves of criticism and skepticism, Ye Guofu led Miniso with a determination bordering on tenacity, carving out its own path.

When asked about his personal investment philosophy, Ye Guofu replied humbly: "I'm not a professional investor, and I don't have a set of investment criteria. My only focus is on making Miniso the best it can be." So, how did he achieve this? Perhaps the answer lies in Ye's keen market insight and deep understanding of consumer demand.

Ye Guofu, the global business magnate known for founding the "10-yuan store" Miniso, once again made waves in the industry with a groundbreaking transaction that showcased his boldness and meticulous attention to detail. Amid turbulent market conditions, he made a decisive move, investing a massive sum of 6.27 billion RMB to acquire a 29.4% stake in the long-established retail giant Yonghui Supermarket, thus becoming its largest shareholder. This move was a thrilling business gamble and a profound reshaping of the traditional retail landscape.
Yonghui Supermarket, once a retail giant that shocked the industry with its brilliant performance, has recently been facing a harsh winter, accumulating losses of up to 8 billion RMB, with store closures in rapid succession. It resembled an eagle pushed into a corner by the market's torrents, desperately needing to spread its wings again. Miniso, though rapidly expanding globally under Ye Guofu's leadership, winning the favor of countless consumers with its cost-effective products and unique brand philosophy, still appeared relatively "small" compared to Yonghui. As such, this acquisition raised considerable concern, with many seeing it as a "snake swallowing an elephant," and the waves of criticism were immediate.

What's particularly noteworthy is that Miniso's financial report showed a cash balance of only 6.23 billion RMB. This meant that Ye Guofu had invested nearly all of Miniso's financial reserves to complete the deal. Yonghui Supermarket reported almost 80 billion RMB in revenue in 2023, while Miniso's revenue stood at just 15.2 billion, making the gap between them starkly clear. Once the acquisition news broke, the capital markets responded quickly, with Miniso's stock price dropping on both the Hong Kong and US exchanges, and criticism flooded in.

However, in the face of this external skepticism, Ye Guofu remained unusually calm and resolute. He explained that his confidence in the investment stemmed from four key reasons: first, he firmly believed that after undergoing a series of challenges, Yonghui Supermarket could undergo a significant transformation and regain vitality; second, he saw this as an excellent opportunity to "buy the bottom," with substantial financial investment value; third, he valued Yonghui's advantages in channel development and supply chain coordination, believing these could provide new growth opportunities for Miniso; and fourth, he was confident in Miniso's experience and capabilities in developing its brands, thinking it could help Yonghui Supermarket improve its gross margin and achieve steady growth.

A Bold Challenge to Jack Ma

Looking back to 2012, a high-stakes bet was made on the future of e-commerce versus traditional retail on national television. Jack Ma and Wang Jianlin, two titans of business, bet 100 million RMB on whether e-commerce could capture 50% of the Chinese retail market by 2020. Four years later, when the public had nearly forgotten this bet, Ye Guofu provocatively called out to Jack Ma: "If you admit defeat, I'll help you pay back 100 million." This remark quickly drew widespread attention, and Ye was humorously dubbed "Ye Big Cannon" by the public, with many questioning whether he was seeking attention.

Yet, Ye's "big cannon" was not a baseless provocation. His view on the new retail model differed sharply from Jack Ma's "online + offline" approach. Ye Guofu saw new retail not as a simple integration of online and offline channels but as a field that required deeper exploration and practice. He warned that unthinkinglyunthinkingly following Ma's vision could lead to a significant pitfall.

Time proved Ye's foresight. By 2023, e-commerce accounted for only 27.6% of China's total retail sales, far from achieving a parity with offline retail. Meanwhile, Ma's acquisition of RT-Mart faced difficulties, with the parent company, the high-end retail giant Auchan, facing a massive loss of 1.6 billion RMB in fiscal year 2024 and closing 20 stores. The ten-year dream of Alibaba's new retail was also beginning to unravel as they started divesting from related businesses.

Ye Guofu's Humble Beginnings

Ye Guofu's journey to success began in poverty. Unable to afford tuition, he never graduated from secondary school. He moved south to Guangdong to work in factories and make a living. His first business venture was a ceramic store, which lost several hundred thousand RMB. But Ye did not give up. His second business, a small cosmetics shop in Foshan's Baihua Mall, turned things around. Despite being just 15 square meters, the store attracted customers with its "free makeup" strategy. He opened three more stores in the same mall in less than a year. By 2003, these four stores generated over 400,000 RMB in net profit.

2004, Ye Guofu had another breakthrough when he learned that a small accessories store was making far more money than his cosmetics shop. This prompted him to pivot, and one year later, he founded "Aiya Ya," a discount store specializing in inexpensive accessories. The wide range of affordable products quickly captured the public's attention, and the market soon recognized the model.

Through a rapid expansion model and celebrity endorsements, "Aiya Ya" opened over 3,000 stores in five years, reaching an annual retail sales figure of 560 million RMB. However, with the rise of e-commerce, "Aiya Ya" faced its transformation challenges. Ye Guofu chose to travel abroad for research and discovered that brick-and-mortar stores still thrive in developed countries, notably Japan's home goods stores, which won customers over with high value-for-money products, excellent service, and comfortable environments. He realized domestic stores were failing primarily due to overpriced, low-quality goods and poor after-sales service, leading consumers to shop online.

Ye's insights led him to found Miniso, a brand that adopted a model offering high-quality, affordable products, providing a new path for transforming physical retail. His entrepreneurial journey proved that continuous innovation and adaptation to market changes are key to success.

In Miniso's development, Ye Guofu adhered to the brand philosophy of "quality, affordability, and fashion." He achieved high-value products that met consumer desires for a better life by optimizing the supply chain, reducing costs, and improving efficiency. At the same time, he boldly broke from traditional retail models, using online-offline integration and global expansion strategies to extend Miniso's presence worldwide rapidly.

This acquisition of Yonghui Supermarket shares could be seen as Ye Guofu's bold attempt and strategic move in the new retail field. While the deeper implications behind this move may not be immediately clear to the public, as Ye Guofu himself has said, true business wisdom often lies hidden in seemingly improbable decisions. Through this process, Ye Guofu and Miniso are demonstrating what it means to "grow amid doubt and push forward through the challenge."