Can Muji Improve Its Performance By Cutting Prices?

According to the world clothing shoes and hats net,

Official WeChat released the latest discount information, including shirts, windbreaker, sofa, quilt quilt cover, lamps and lanterns series and other products.

At the same time, the price of Muji has also been lowered in the Chinese market for price adjustment.

MUJI released a new round of price cuts in China in January 19th, the sixth price cut since 2014.

Behind the brand discount sale, however, is a sustained slowdown in performance. According to the latest three quarter report released by the MUJI products company, the latest quarterly report released in 2016,

Comparable sales in China increased by only 0.8%, while the growth rate in the first two quarters of fiscal year 2016 was only around 5%.

In fact, the signs of slow growth in performance began in 2015, and the same store sales growth in the four quarter of 2015 dropped from 38.6% in the first quarter of the same year to 9.7% in the same quarter.

Analysts pointed out that with other

Compared with brands, Muji has no advantage in consumer groups and product prices.

For the time being, it is hard to save the performance of MUJI products by reducing prices.

Continuous price reduction

In January 19th, Muji released its new pricing information on its official WeChat account. It said that on January 20th -2 2, the price of some products would be lowered, mainly related to household products, including sofa, quilt cover, feather quilts, slippers and so on. The price range fell from 5%-20%.

A new $200 yuan neck pillow has been priced at 160 yuan, with a drop of 20%.

It is reported that this is the sixth price adjustment of Muji since 2014.

Yamamoto Naomiyuki, director and general manager of Muji (Shanghai) business limited, has previously said that Muji will continue to issue "new pricing" for 295 products in 2017, and the price cut will reach 14%.

In fact, Muji's price reduction campaign started testing water in 2014.

In October of that year, Muji reduced prices to 107 different categories of goods, with a price drop of 17.5%.

Thereafter, prices were cut down in January 2015 and August.

In 2016, Muji also made two price reductions. In January of that year, the average price of groceries was down by 21%, which involved 256 categories. In August of the same year, MUJI products were again cut in 330 categories, with an average reduction of 20%.

Mui Yin (Shanghai) Commercial Co., Ltd. propaganda promotion department staff told reporters that after several rounds of "new pricing", the price of clothing products in the Chinese market has basically been flat with Japan.

Trapped performance

According to the results released by the MUJI products company, the sale of MUJI products in China in the first three quarters of 2016 was 38 billion 659 million yen, or about 2 billion 201 million 500 thousand yuan. In the three quarter of 2016, sales increased by only 0.8%, compared with sales of 4.7% and 5.4% in the first and two quarters respectively.

In addition, the data also showed that the growth rate of MUJI products in the Chinese market in the 4 quarter of 2015 was 38.6%, 22.6%, 15.9% and 9.7% respectively, slowing down significantly and falling to single figures in the first quarter of 2016.

Kang Lanxin, Dean of the school of dress and collocation, said that the reasons why the brand continued to depreciate in China can be seen from its performance.

Compared with other fast fashion, Muji does not advocate fast and imitative design, but promotes quality of life.

It is also this strategy that makes its selling price much higher than that of other products.

However, for reasons of price reduction, Yamamoto Naomiyuki denied the idea of boosting sales, and said: "our goal is not to attract customers by discounts, but to eventually lower prices so that we can buy our products at excellent prices."

MUJI workers also said in an interview with reporters that the brand "new pricing" activities are mainly for customer feedback.

The price of Muji has always been criticized in China.

In addition, there are bottlenecks in the expansion of Hua men shop and the reduction of commodity attractiveness.

Some analysts have pointed out that price cuts can boost Muji sales, but in the long run it is difficult to save the performance of MUJI products, and the attractiveness of its pricing strategy to consumers is declining.

Falling price circle

Reporters learned that the price of MUJI products in China is larger than that in Japan.

For example, the price of a wall mounted CD player on the Japanese official website is 13 thousand and 500 yen, or about 830 yuan, and this product is priced at 1080 yuan in MUJI Tmall flagship store. The price difference is obvious.

Kang Lanxin pointed out that when the so-called "high quality" goods in China were not yet rich, MUJI products with unique concepts and distinctive shop designs appealed to high-end consumers.

At present, there are many high-quality, cheap and design alternatives in the domestic market, such as famous products, and so on. The competitive advantage of Muji is gradually lost. In addition, in recent years, Muji product innovation and product design have not changed so much that its market space has been eaten up by competitors.

However, the price cuts for Muji have continued.

In reply to reporters, Muji said that the ultimate goal of the brand is to reduce the price. "In the future, we will also increase the price range."

People in the industry are worried about the rapid reduction of brand names. It is very dangerous for brands to attract consumers, compete for the market and promote performance through price cuts.

If the price of goods is in step, they can quickly win the brand, but this will not only damage the brand, but also hurt a large number of loyal consumers in the short term. Frequent price cuts will easily cause the brand to fall into the vicious circle of price reduction, resulting in the worse performance, the more price reduction, the worse the performance will be.

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