Miniso Gets Dressing Down in Online Brouhaha

Miniso Gets Dressing Down in Online Brouhaha

Key Takeaways:

Minisoa??s shares are down 17% since it was accused of mislabeling a Chinese-clothed doll as Japanese, and more broadly of trying to hide its Chinese roots

The attack represents a relatively unique risk faced by both foreign and domestic companies doing business in China

By Doug Young

Its logo is red with a distinctively Japanese look. But these days trendy brick-and-mortar retailer Miniso Group Holding Ltd. (NYSE:MNSO) is seeing a lot more pink.

The company, which wea??ve often mocked for trying to make its stores resemble popular Japanese brands like Muji and Uniqlo, has spent much of the last month trying to convince the public that ita??s really a very Chinese company. The brouhaha has taken a bite out of Minisoa??s stock, which is down about 17% since it first put out a statement July 25 clarifying its status.

Wea??ll examine the ruckus in more detail shortly, including its origins and Minisoa??s response. But from a broader perspective, we should note that this kind of tussle represents a relatively unique risk to doing business in China, especially for well-known consumer brands. Such brands can quickly and unexpectedly become the target of angry buyers who believe the company has done something unethical, unjust or outright illegal.

Those consumers then vent their frustrations online through social media, whipping others into a frenzy that at a minimum can result in reputational damage, and at worst can end in boycotts and even regulatory action. The Miniso case involves an increasingly influential group of nationalistic Chinese known locally as a??little pinks,a?? who typically rail at anything they see as unpatriotic.
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