Chinese retailer Miniso planning for US$1 billion IPO

Affordable household and variety items retail chain Miniso is said to be planning an initial public offering (IPO) to raise around US$1 billion, in a share sale that could take place in Hong Kong or the United States (US).

The timeline on when the IPO would take place has not been confirmed yet, people who know of the matter told Bloomberg. The firm has invited banks to pitch for roles on the proposed offering, the sources said.

As the discussions are still in the early stages, the details of the offering and fundraising amount could also change, the sources added.

The Tencent-backed Chinese retailer is co-founded by Japanese designer Miyake Junya and Chinese entrepreneur Ye Guofu in 2013. It has more than 3,500 stores in over 80 countries including the US, China, India, and Singapore.

The firm has been regarded as a more affordable counterpart to Japanese lifestyle brand Muji, which is owned by Japanese conglomerate Ryohin Keikaku. Last year, Miniso posted a revenue of 17 billion yuan (US$2.5 billion).

Raising funds to support expansion plans

The funds from the proposed IPO is likely to be used to support the firm in its aggressive growth plans.

In September last year, Tencent and Asia-based investment management firm Hillhouse Capital pumped in 1 billion yuan (US$140 million) in its first external financing round. With those funds, Miniso has plans to have 10,000 stores in 100 countries by 2022 with a sales target of US$15 billion.

The firm has its products designed in-house and bulk purchases its goods to keep costs low and make its items affordable to consumers. It prices its items such as cosmetics, earrings, and household items at around US$2 to US$5.