MUJI Replaced UNIQLO As The Most Popular Japanese Dress.

With its strong growth and expansion in China and its favorite middle class population, MUJI Muji is replacing its "fellow townsman" Uniglo.

Becoming the most popular Japan

Groceries

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Muji Muji's parent company Ryohin Keikaku Co. Ltd. (7453.T) Co., Ltd. today released its first quarter results in fiscal year 2017, ending in the first quarter of May 31, 2016, the company recorded an increase of 13% to 87 billion 536 million yen in the first quarter, and net profit rose 27.2% to 7 billion 671 million yen over the same period.

The Chinese mainland market is still the main engine of growth of Ryohin Keikaku Co. Ltd.. The sales in mainland China increased by 18.9% to 13 billion 384 million yen in the first quarter of fiscal year 2017. If the fixed exchange rate is calculated, the increase will be 28.8% and the sales increase will be 4.7%.

Even in the extremely depressed Hongkong market, the sales of the company still increased to 3% HK $3 billion 680 million, and the fixed exchange rate and the comparable sales increase were 1.6% and 6.5% respectively.

Southeast Asian markets in mainland China, Hongkong, Taiwan and Korea totaled 21 billion 978 million yen in the first quarter, an increase of 13.9% over the previous year, with fixed exchange rate growth and comparable sales growth of 5% and 22.8% respectively.

As of the first quarter of May 31, 2016, Ryohin Keikaku Co. Ltd. Co., Ltd. plans to increase its operating profit in Southeast Asia, China, Hongkong, Taiwan and Korea to 16.4% yen to 4 billion 503 million yen, accounting for 39.4%, which has shrunk compared with 40.4% in the same period last year.

With the rapid growth of China's economy and the sluggish consumption of mainland China, the growth of Ryohin Keikaku Co. Ltd. Co., Ltd. is also slowing at the same time. However, compared with its rival Uniqlo, UNIQLO and H&M, the Japanese brand positioning is undoubtedly the industry leader.

Tang Xiaotang, founder of No Agency, a consultancy and retailer and luxury goods industry, said that the middle class is now widely recognized in China's retail market, and MUJI Muji is undoubtedly one of the most representative brands.

According to the report released by the Credit Suisse last year, China's middle class population reached 109 million, while the Ryohin Keikaku Co. Ltd. Ltd. Co., Ltd., the MUJI Muji in mainland China is undoubtedly the brand that cut the above 109 million population.

"The retail industry is particularly affected by China's macro-economy," Tang Xiaotang said. Although MUJI Muji has its inherent advantages in positioning, it is hard to avoid slowing growth in the mainland.

However, he said that the MUJI Muji product mix still helped the brand to take the lead in the mainland market. "Home products can help the brand increase the unit price and profit margin of the customer, while increasing the supply of the less profitable food category can increase the flow and brand loyalty."

There is no doubt that the design and value orientation of MUJI Muji, as well as the range of products covering clothing, home and food, are the most favorite brand characteristics of the current Chinese consumer lifestyle change.

For this reason, MUJI Muji has expanded in China in the past year. In fiscal year 2016 and fiscal year 2015, the number of MUJI MUJI products in mainland China increased by 32 and 28 respectively, and this year it plans to increase by 40 by the end of February 2017. The number of stores in China is expected to reach 200 by the end of February 2017.

On the contrary, the latest quarterly reports of Uniqlo UNIQLO and H&M, H&M Hennes & Mauritz AB (HMb.ST), Hayne and Maurice show that the sales fixed exchange rate of the group's mainland market in China as of the two quarter of May 31st was only 3%, although Uniqlo's UNIQLO parent company Fast Retailing Retailing (Company) fast marketing group has not disclosed the specific performance of the Chinese market in the quarterly report, but the company is now in a predicament, and its prospects are dim. Its business in the Greater China and South Korea has been shrinking, and Hongkong and Taiwan in Greater China are selling back because of the weak local economy.

As of the first quarter of May 31, 2016, Ryohin Keikaku Co. Ltd. Co., Ltd. had a 19.6% increase in operating profit to 11 billion 423 million yen, from a 16.6% increase in operating profit to 11 billion 427 million yen, with an operating margin of 13.1%, an improvement of 40 basis points compared with the same period last year. Gross profit recorded a 15.2% increase in the first quarter to 42 billion 866 million yen and a gross margin of 49%, an increase of 90 basis points compared with the previous year.

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In the first quarter, Ryohin Keikaku Co. Ltd. Co., Ltd., Japan's local market revenue recorded 59 billion 186 million yen, an increase of 11.9% over the same period, and operating profit increased 23.7% to 7 billion 135 million yen, accounting for 62.5%.

It is worth noting that the market in West Asia and Oceania, which has 45 stores, is very strong in the first quarter. The market includes four countries, namely Malaysia, Thailand, Singapore and Australia. Among them, the Australian market has surged by 35% in the same quarter, the sales increased by 214.5% according to the fixed exchange rate, the sales in the same market of the Singapore market also rose 24.2%, and the same market sales in Thailand also increased by 12.6%.

In the first quarter of this year, the total sales of southwest Asia and Oceania increased by 18.9%, a year-on-year increase of 6 stores.

Ryohin Keikaku Co. Ltd. Co., Ltd. plans to maintain the overall revenue growth of 9.4% to 336 billion 500 million yen in 2017, and maintain the overall operating profit growth of 10.3% in the 2017 fiscal year, as well as the 1.4% increase in operating profit in Southeast Asia and the 19.6% increase in operating profit in the domestic market.

Ryohin Keikaku Co. Ltd. (7453.T) Co., Ltd. plans to sell 25520 yuan on Friday, up 2.57%, the stock has risen 3.56% this year, far exceeding the 225 decline of 225 Nikkei index 17.60%, and the next week's three quarter results of the company's main competitor, Fast Retailing Company Ltd. (9983.T) XXX group share price has fallen by 35.82% so far this year.