MUJI Will Replace UNIQLO As The Most Popular Japanese Brand.

With the strong growth and expansion of China and the favored middle class population, Muji is replacing its "fellow townsman".

Become the most popular Japanese clothing and grocery brand.

The Muji's parent company's good quality plan released its first quarter results in fiscal 2017 today. 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 mainland China market is still the main engine of growth in the good plan. Sales in the first quarter of the 2017 fiscal year increased by 18.9% to 13 billion 384 million yen. If fixed exchange rates were calculated, the growth rate would be 28.8% and 4.7%, respectively.

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, China's mainland, Hongkong, Taiwan and South Korea's operating profit increased by 16.4% to 4 billion 503 million yen, or 39.4%, representing a contraction of 40.4% over the same period last year.

As China's economic growth slows down and mainland consumption is sluggish, the growth of the mainland's mainland market is also slowing at the same time. However, compared with its competitors, UNIQLO and H&M, the Japanese brand is still the industry leader.

Tang Xiaotang, founder of NoAgency, a consulting and speculation institution in the luxury goods industry, said that the middle class is now widely recognized in the Chinese retail market. 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 good quality plan's MUJI Muji on the mainland is undoubtedly the brand that hit the 109 million population.

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

However, he said Muji's product mix still helped the brand to take the lead in the mainland market. "Home products can help brands improve customer unit prices and profit margins, while increasing the supply of low profit food categories can increase passenger flow and brand loyalty."

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

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

On the other hand, UNIQLO and

The latest quarterly report shows that the fixed exchange rate of the group's mainland market in the two quarter ended in May 31st was only 3%. Although the company did not disclose the specific performance of the Chinese market in the quarterly report, the company is now in a predicament. The prospect is bleak. The business of the larger China and South Korea's UNIQLO businesses has been shrinking. The Hongkong and Taiwan in Greater China are selling back because of the local economic weakness.

As of the first quarter of May 31, 2016, the operating profit of the good plan business increased 19.6% to 11 billion 423 million yen, from 16.6% of the continuous operation business profit to 11 billion 427 million yen, with a profit 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.

In the first quarter of the year, Japan's local market revenue was recorded at 59 billion 186 million yen, an increase of 11.9% over the same period last year, and operating profit increased by 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.

The good plan maintained the overall revenue growth of 9.4% to 336 billion 500 million yen in 2017, and maintained 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.

On Friday, the good quality plan closed at 25520 yen, up 2.57%. The stock has risen 3.56% this year, far exceeding the 17.60% decline in the Nikkei 225 index. The company's main competitor, XXX group, which will release its three quarter results next week, has fallen 35.82% this year.