The Ups And Downs Of Reasonably Cheap And Expensive Brands

At present, the common goal of ZARA, H&M and UNIQLO is to focus on the Chinese market. Under the massive attack of fast fashion, Muji, another chain retail brand from Japan, is also releasing a signal to the outside world to speed up the opening of stores and break through 100 stores by the end of the year. Why can a good Muji product without LOGO become popular in the Chinese market?

　 Successful "Replica"

Muji was born in 1973 during the oil crisis, when Japan's industrial production fell by 20% and the country's economic growth slowed significantly. Muji also seized the development opportunity to launch simple and plain products without brand logo. In 1990, Muji began to accept the transfer of direct store business; In 1991, it opened overseas stores in the UK and Hong Kong, China; In 1995, Muji was listed on the Japanese market.

According to a person familiar with Muji, Muji is not a mid-range brand in Japan, but the first choice for some housewives with poor living conditions. "The pricing of Muji products in China is almost the same as that in Japan. The company directly converts the price through the exchange ratio of RMB and yen."

In fact, from packaging, design to price, Chinese Muji can almost be regarded as a "replica" of Japanese Muji. However, Muji came to China with Japanese prices, and its status changed significantly. In China, Muji is the first choice for consumers with quality of life. Although the product design is simple, the packaging is simple, and the raw materials are not successful, Muji has successfully won the hearts of many consumers. According to Muji's data, during 2006-2011, nearly 74% of women with an average age of 34 visited Muji 3.3 times a month.

　 Reasonably cheap and expensive

Muji's original idea is to develop goods based on product departmentalism. In the opinion of Lin Yifan, director of Zhengjian Brand Research Center, Muji is not a cheap brand. Although it is a basic design, the concept of Muji can give higher value to the goods.

At the time of Muji brand's birth, food and groceries were mainly among the 40 commodities. Subsequently, Muji continued to expand its concept, from simple and economically rational products to natural, pragmatic and personalized products. From the combination of wood and paper pipe rack to the non bleaching and dyeing and primary color goods. At the same time, Muji also began to develop overseas products, and made direct orders from factories for global scale development. In addition to expanding categories and promoting differentiation, Muji has maintained a rapid growth in performance by accelerating the opening of stores, strengthening the brand concept and adopting more competitive production and sales models.

Muji aims to open 40 new stores this year, and plans to have more than 100 stores in China by the end of the year. At the same time, Muji's global expansion continues. In the opinion of Wang Yongping, Secretary General of China Commercial Real Estate Alliance, Muji, as a secondary anchor store, is also favored by shopping malls. Wang Yongping believes that compared with the demand for large business area of fast fashion brands such as ZARA and H&M, Muji stores usually cover an area of more than 200 square meters, with high gross profit margin, so malls do not need to sacrifice too much interest. At the same time, Muji's overall design style from commodities to stores is also quite "high-grade", meeting the requirements of consumers who pursue quality.

　 History of Brand

Although Muji has entered a period of full speed development, during 1997-2001, Muji also experienced a decline in performance. In 1997, the operating income of Muji reached 7.57 trillion yen, and the operating profit was 668.4 billion yen; In 1999, the operating income reached 10.7 trillion yen, and the operating profit was 1.74 trillion yen. After 1999, Muji's performance soared due to the strategic error of rapid expansion and the thinning of brand concept.

During 2001-2002, Muji went through restructuring, set up a special team for experience reform, dealt with bad inventory, closed or reduced non-profit stores, and carried out intensive office work to improve efficiency and reduce costs. Now Muji has expanded to 22 countries and regions. It is understood that in the first half of this year, through the adjustment of goods and stores, the sales performance of Muji products in China has increased by more than 50% year on year.

The relevant person in charge of Muji said that the company would pay attention to the second and third tier cities in China in the future. According to the analysis of the insiders, brands that follow the middle and low-end route are easier to expand in second and third tier cities, and price advantages and brand influence will become the "stepping stones" for such brands.