By Sophie Yu and Brenda Goh

BEIJING (Reuters) – Chinese retailer Miniso Group will open a “flagship store” in New York this year and nearly double its U.S. stores, betting that price-conscious post-pandemic shoppers will buy cheap but fun items for home and work, such as $10 stuffed cats and $4 avocado-shaped staplers.

With fewer than 60 outlets, Miniso is still dwarfed in the U.S. by giant low-price retailers like Dollar Tree, as well as its own Chinese base of nearly 3,000 stores.

However, Miniso said the company is moving quickly to capitalize on lower rents in the pandemic-hit U.S. economy. And Vincent Huang, the company’s vice president in charge of overseas business, told Reuters that he ultimately sees potential for “thousands” of U.S. stores.

The plan underscores the ambition of a company that was founded in Guangzhou just eight years ago, now has annual sales of around $1.41 billion and is listed in New York with a market value of $4 billion. Shares have fallen 2.3 percent since its IPO in October 2020 amid a general slump in retail caused by COVID, but the company’s investors include Chinese tech giant Tencent and Hillhouse Capital, among others.

The expansion also comes at a crucial time for shopping centers across the United States, as many big-name retailers have succumbed to the drastic decline in sales that immediately followed the first wave of the coronavirus pandemic in 2020.

Among the brands that disappeared from U.S. retail was Flying Tiger Copenhagen, a Danish convenience store chain that competed with Miniso in many markets around the world but closed its 13 U.S. stores in November last year.

Miniso operates about 4,800 stores in more than 90 countries worldwide and will have 54 stores in the U.S. by the end of the year, up from 30 at the start, Huang said.

“We decided to expand our presence in the U.S. now for several reasons, including that the costs of opening a new store after COVID-19 are lower,” Huang said in a recent interview.

The new stores include Miniso’s first city-based store, which opened in November in the recently opened Tangram mall in Flushing, New York – an area known for its vibrant Asian American community. Huang described it as a “flagship store” with a 3,300-square-foot space, slightly larger than a tennis court, selling everything from neck pillows to notebooks and makeup.

“STRATEGIC MARKET”

In the US, expansion costs have fallen by around 20 percent, mainly due to rent reductions, and the pandemic has also made it easier to secure good locations, he said.

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“We have always believed that we are an international company and that North America is our strategic market,” he said.

Miniso describes itself as “a retailer of Japanese-style lifestyle products” and has been compared in the past to the Muji chain of Tokyo-listed company Ryohin Keikaku.

But Miniso, with its busy store and bargain markets, is located in a market segment occupied by the well-known Japanese $1 store chain Daiso Industries, which has been present in the US since 2005 with a network of almost 80 stores, including its first branch on the East Coast, which is also located in Flushing.

Miniso does not disclose exact sales figures for its stores in the United States, where it opened its first store in California in 2017. But last month the company said it generated about 20 percent of its total sales of 9.07 billion yuan ($1.41 billion) last fiscal year from its 1,800 stores overseas, such as in Mexico, Indonesia and India.

Huang said Miniso’s U.S. sales have recovered to pre-COVID-19 levels, with sales up 73% year-on-year in the first half of 2021. “Since the pandemic, we’ve been more popular than ever,” he said.

Contributing to this popularity in recent years have been product collaboration collections with leading brand owners such as Disney, Coca-Cola and Marvel Entertainment, resulting in items such as Mickey Mouse face cream, Coca-Cola ceramic mugs and Spider Man mouse pads.

“Ultimately, consumers don’t care if we are Chinese or Japanese, American or European,” Huang said. “What consumers care about is whether they can buy inexpensive products with as little money as possible.”

(1 US dollar = 6.4511 Chinese renminbi yuan)

(Reporting by Sophie Yu and Brenda Goh; Editing by Kenneth Maxwell)