How Can MUJI Products Maintain Their Own Brand Premium While Expanding And Reducing Prices?

One is the representative of mass parity products, the other is the symbol of refined consumption.

Where does this difference come from?

According to the world clothing and shoe net, Xue Hau bought more MUJI products after studying in Japan.

"In Japan, it is more popular with the people. In China, it can buy it after all, but it will be a bit expensive."

After she came to Japan, she changed the whole set.

Stationery.

"It feels like the price of other brands and stationery stores."

Stationery, food, skin care products, clothing Xue Xue have bought, every time she returns home, she will bring MUJI products to her family and friends.

If you have been to MUJI products in China and Japan, you may notice one.

In two markets, different positioning -- in Japan, it is a low price mass brand, in China, it represents the high-end lifestyle brand with consumption upgrade; one will appear in the street, convenience stores and subway stations, one is high-end.

The standard of commercial real estate; it is a national brand in Japan, and it will be bought from housewives to white-collar workers, but in China, its consumers are young middle class.

MUJI, a set of DNA, has become two kinds of existence in two countries.

Why are there two MUJI products?

The reason for "two Muji" lies in the pricing system first.

Clement, who was once sold in the Muji shop in China, explained to reporters that "at the beginning, everyone had a very irrational admiration for MUJI.

Everyone will think that MUJI will be more upmarket than UNIQLO because the price is more expensive.

When she was studying in England, she often bought things in Muji in London. After that, she did not think Muji was superior to UNIQLO.

If Muji is priced in Japan based on "cost reduction" such as "simplified packaging" and "avoiding material waste", its pricing in the Chinese market is obviously more complicated, with more brand positioning considerations.

Before the first price fixing in October, 2014, most of its products were set at the initial exchange rate (1 yuan to 12~13 yen), and prices were basically divided by 10 by yen.

Although the price has been reduced by 200 yuan, the price difference still exists.

The real exchange rate is this: from 1 yuan in 2013 to the Japanese yen, it exceeded 15.

In 2015, the RMB against yen was basically around 1:20.

Now, if we do not consider the tax effect, the price of Chinese products in China should be divided by 16 by the exchange rate.

This way of pricing makes Muji prices in China reach two times that of Japan.

MUJI has its own cost considerations. At that time, it did not have warehousing centers in China, and it needed to pport those made in China to Japan before sending it to China.

In addition, China's VAT is relatively high (17%, Japan's consumption tax is 8%).

However, there is also a stealth gap, which is the actual consumption and purchase level of the two countries' consumers.

According to the world bank's data, the Japanese GDP PPP is equivalent to 4.4 times the purchasing power parity of Chinese consumers in 2008, and the gap has shrunk in the 2015 year, but Japanese consumers still have 2.5 times the purchasing power of Chinese consumers.

With this in mind, you will find that Muji can not be priced in China without the illusion of scarcity and luxury.

An intuitive example is a wooden stool priced at 1000 yuan (Japanese yen 10000 yen) in China. On the basis of knowledge, why the bench is priced at 1000 yuan renminbi is the most heated topic in the topic of Muji.

According to a friend living in Osaka, "Jun Hai" calculates that 1000 yuan is equivalent to 1/5 of China's general consumer's monthly income, while 1 yen million yen is equivalent to 25 of Japanese consumers' monthly income.

The pricing method of "yen divided by 10" has been discussed many times, and Muji later did not put the Japanese price on the product.

It is worth pointing out that the price of Muji is tied to location and shop form.

In China, Muji is often tied up with high-end commercial real estate projects.

For example, the first batch of shopping centres and shopping centers stationed in MUJI products are: Joy City, Wanda or Tai Koo, which are generally located in the first tier Business District of the city, and only extended to the two level business circle in recent years.

Such a configuration, rent determines its cost will be higher.

In Japan, it has more forms.

In addition to the shopping mall, it has a roadside store, a single house on the street, a shop for no prints; a KIOSK, which is said to be specially designed for office workers and students, and is missing in time for commuters (recently they closed the industry); in the family convenience store, no prints and its own counter (it has such cooperation with the 7-Eleven in Taiwan).

At least in the subway shop and convenience store counters, it shows an image of economic benefits.

{page_break}

When it comes to the concept of Muji, Tanaka Yasuo's novel, like crystal, is always regarded as an example of antagonism.

It refers to the life of the heroine's student and model, and spends a lot of ink (or even annotation) on all kinds of famous brand and high-end consumption activities and lifestyle. It reflects the flashy consumption of the Japanese bubble economy era.

In the 2008 year old market where Muji has opened second stores in China and began to expand, the middle consumption boom has begun to heat up. While talking about "petty bourgeoisie", luxury consumption is becoming more and more common, and most of them are dominated by ostentatious consumption.

Published in the "little time", this book refers to the popularity of a large number of famous brand novels, and it is also a yearning for consumerism.

Whether it is "crystal" or "little time", the image of "No Brand" represented by Muji represents their opposite.

From 1980 to the present, Muji's brand image has not changed much. The difference is that Japan was already a developed country, and China is still in development, and has just begun to upgrade its consumption.

That's the era when "foreign brands" penetrate into more Chinese consumer clothes and groceries.

In 2008, several fast fads slowly stabilized in the first tier cities: Zara entered the Chinese market for two years; H&M just entered the Chinese market in 2007; and 6 years ago, UNIQLO entered the Yangtze River Delta region and formally entered the North China market centered on Beijing.

MUJI has become one of the tutors of China's consumer lifestyle in the process of upgrading consumption. It brings lazy sofa, ultrasonic perfume machine, tiny neck pillow and wall mounted CD machine. These things can improve the quality of your life in the shopping guide.

Many consumers may not have heard of it before.

MUJI shows the side that "the needs of life can be taken care of so meticulously", and many of them are accomplished through excellent industrial design.

The product of this company has another feature: because of various categories, consumers can slowly "upgrade" their own expenses.

At the very beginning, the "entry" products of young consumers were stationery, priced at more than ten yuan. As they entered the society, they began to work and promoted their salaries. They purchased products from stationery to cosmetic products and clothing.

After having your own space and family, you may continue to buy home appliances (such as cleaning, storage and bedding) or even furniture.

In the Muji setting, some of the entry-level consumers who only bought pen at the beginning can become a single consumption person some day.

In addition, its concept has a unique selling point in the Chinese market, and it is also the reason why it dare to take 1.2~2 times pricing.

The "good name without name" and many Made in Japn tags are special for many Chinese consumers. This distance brings a scarce and advanced feeling that consumers may be more willing to pay for it.

Nina, 25, who worked in Internet Co, talked about the first visit to Muji.

She said, "the main color of log color is Logo red, which is rarely designed by domestic brands."

"Exquisite" and "detail oriented". She described her feelings as Muji.

By contrast, Japan's local grocery and furniture brands are numerous, and the average level is high. Consumers are highly differentiated when choosing such products. Even you have to choose Muji style products, from independent designers to chain retailers.

The "Muji" reform also mentioned that the "Savings" brand of DAIEI is similar to Muji's "no brand" positioning (its launch even earlier than MUJI products 2 years).

However, although Muji has advocated the concept of simple life like "just good", in the final analysis, it is also a kind of consumption.

MUJI's "expensive" and "worthless" are the topics that consumers will talk about when they mention it.

MUJI started a new pricing campaign in 2014. After 5 rounds of price cuts and the appreciation of the yen, its price in China is still 10%~30% higher than that in Japan.

In addition to logistics, shop location and other cost considerations, this may also be related to the commercial strategy of Muji itself.

"The price of overseas markets is 1.2~2 times that of Japan", which is written by a 2013 year old paper on flagship stores in Waseda University, which has long been one of Muji's pricing strategies.

Or at least we can say: Muji did not cater for it, but did not try to ease the misunderstanding of Chinese consumers.

For example, Muji in China rarely publicize slogan in Japan: "because it is reasonable, so cheap" and "cheap" for a reason.

On the introduction page of micro-blog, the company wrote: "Muji" is meant to be "no label high quality goods".

MUJI, which was born in 1980, interpreted the spirit of the times with the concept of "no label, value and no modification".

There is no mention of the word "cheap".

It will not easily say that China wants to make a cheap brand in China.

From the beginning of 2014 to the end of 2016, several price reductions were also called "new pricing".

In an interview, Matsuzaki Kyo, the president of the good plan, once said, "I think it is because of the brand image that we have sustained profits."

Kazakhtin kazakhtin, President of the company

Because of the existence of two MUJI products, Muji can make some new formats in the Chinese market, such as the newly announced MUJI Hotel.

It announced in December 26th that it will build the world's first "Hotel + catering + retail" three in one project with Shenzhen industrial group in Fukuda's Shenzhen Shangshang city.

This hotel will provide 79 rooms that are "anti luxury" and "anti shabby". The price will not be very expensive and not particularly cheap (Matsuzaki Xiao Yu).

All space design and interior products will be provided by Muji, and the owner will be responsible for the specific operation of the hotel.

The news was announced just after the completion of 200 MUJI products in mainland China in December 12th.

Shortly before that, Caf MUJI, a cafe, was also opened in Shanghai.

The new format is to find new growth points.

In this tight rhythm, you can read the ambitions of Muji and a little anxiety behind it.

{page_break}

In the Chinese market, Muji retail stores are growing, but their performance is not satisfactory: same store sales are slowing down in the first quarter of 2015.

At that time, its same store sales reached its highest value in the history of Chinese market - 38.6%.

Then it slipped down and fell back to the number of units in the third quarter of 2015.

In the 2016 quarter of the third quarter of 2016 (9 ~11 months), its same store sales grew by only 0.8%.

In the first three quarters, total sales growth slowed down, with only 3.6%.

Meanwhile, the official website of Muji also announced the opening of new stores: Haikou, Nanchang, Yinchuan, Zhuzhou and Lanzhou.

These 234 tier cities are all new markets for Muji.

Young people there are no strangers to Muji.

Zhong Yan lived in Nanchang. Before Muji finished her shop in November last year, she used to buy on behalf of her. She also went shopping in Shanghai, and even went to Caf & Meal MUJI to eat.

Chai Ting is a native of Guiyang. She told reporters that two of Guiyang's MUJI products, "many people, will have to queue up".

Before Muji entered Guiyang, she had bought something from her generation.

In the two or three tier cities, Muji is still a more advanced lifestyle. It is often associated with some "light luxury" or at least mid-range brands, for example, in Nanchang, its shops are Y-3, Pandora and Michael Kors.

There are Costa and Mango near CITIC Yue Fang store in Changsha.

The upgrading of consumption in the two or three tier cities has just begun, especially in home appliances, sundries and furniture, which is an opportunity for Muji.

At the same time, the growth of the first tier cities may slow down, and Muji has brought out new formats to stimulate consumption.

In order to cooperate with the new format, in September 1, 2016, Muji set up a new Department called "new regulation division", mainly responsible for Caf & Meal MUJI and MUJI HOTEL, which proved the importance of new formats.

The new format is selling services on the surface, actually playing the role of displaying goods and images.

Restaurants are designed to sell tableware and food, and hotels may want to stimulate consumer demand for household products.

If you know that Muji, general manager of China, Yamamoto Naomiyuki mentioned that future sales targets will focus on furniture and food, then it will not be strange for it to open restaurants and prepare hotels.

MUJI is very clear about the complexity and level of Chinese market: the first tier cities and coastal areas and the second tier and three tier cities have different spending power and consumption habits.

In an interview with reporters, Matsuzaki Kyo has revealed that he will open a large store in China's major big cities and open small shops in the surrounding cities.

This is different from the strategy of UNIQLO in the two or three tier city, which also has a two storey building of 1000~2000 square meters.

It plans to guide the two or three tier cities from higher spending power.

MUJI products in the two or three tier cities consumers may often travel to the first tier cities, specifically to try Muji restaurants, sensitive to the trend and brand, familiar with the first tier cities or overseas lifestyle, but also sigh "unfortunately their cities do not have IKEA" those people.

The good plan that Forbes once rated as "the best medium sized enterprise in the world" seems to be not satisfied with the medium size.

In the process of further globalization and increasing scale, it is the driving force for them to explore the international market.

But the crisis is also approaching the ambitious Muji. The premium of the brand brought about by the lack of ideas, tonality and product scarcity is vanishing.

There are three main reasons: first, the expansion of Muji itself dilutes the scarcity, but as long as the market is large enough, this is not really a worry; secondly, the speed of MUJI products is not very fast. Because of the limitations of ideas and tonality, clothing always seems to make people feel familiar, while the home class rarely increases SKU. The third point is most important. The consumption choices and cognition of Chinese consumers are increasing rapidly. As in Japan, there are more and more things that can replace Muji.

"Every time I saw MUJI, those tableware couldn't get rid of my legs. Maybe it's because the wood is very popular now. These products are sold in many places. I feel that MUJI is not high enough to buy these products, and it will not stick to one house any more."

Public comment on a netizen said so.

Nina, who works in Beijing, feels that Muji has become "more commonplace" when she first contacted five or six years ago.

She thinks the reason is, "comparing with other brands, MUJI is not a sign of deterioration."

It is interesting that two MUJI products have similar problems in development.

MUJI was once in a loss before and after 2000 years in Japan. Its sales in the same store declined for four consecutive quarters, and its share price fell.

At that time, it relied on closing down poorly managed shops, shortening the new push cycle, and working with Yamamoto Teruji to improve product strength before turning the corner.

How to maintain their own brand premium while expanding and reducing prices? How to compete with low price rivals? Muji has encountered many difficulties in China many years ago in Japan.

But the biggest difference is that China's Muji is not Japanese Muji.

Chinese consumers are not Japanese consumers either.

More interesting reports, please pay attention to the world clothing shoes and hats net.