Accelerate The Capture Of Young Consumers, Muji'S Ninth Price Cut In China

According to MUJI Muji micro-blog official, micro-blog has cut some of its products since August 30th. Chinese Market The average selling price is 20%. The price reduction is mainly concentrated on clothing and daily life products, covering the basic funds. T-shirt Shirts, down garments, lipsticks, carpets and air purifiers are more than 500 products, of which household products are reduced by 40%.

As a matter of fact, Muji has been reducing the price of products in the mainland market since October 2014. This is the ninth time that the brand has lowered the price of Chinese products. It is just a year since the last price cut. Some people expect that the price will be basically the same as that in Japan this year.

MUJI, which opened its first store in Shanghai in 2005, attracted a large number of Chinese consumers and developed rapidly in the first tier cities because of its unique and environmentally friendly design aesthetics. Unlike Japan, which only opened as a "grocery store" at the subway station and street side, Muji has always been a boutique store in China's large business district. Its simple and environmentally friendly unique design attracts a large number of Chinese consumers and rapidly expands in the first tier cities.

However, the high price gap caused by the positioning gap between China and Japan has been gradually enlarged with the growth of China's middle class and the rise of cross-border electricity providers. According to people familiar with the matter, the price gap between China and Japan is up to 2 times.

MUJI accelerated its expansion in 2012. Chinese Market It is mainly for 123 tier cities, but with the increasing penetration of brands, many hidden problems are also exposed. Smart consumers soon discovered that most of MUJI products were made in China, and they were largely buying the rents for the brand's bustling areas, which soon disappeared with the "wave of price cuts" of Muji.

At the same time, China's tariff cuts on imported products have provided an excuse for cutting prices. Following a tariff cut in December last year, the State Council announced a tariff reduction in July this year.

Zhang Jianping, director of the regional economic cooperation research center of the Ministry of Commerce and international trade and economic cooperation of China, said that the large-scale reduction of import tariffs on consumer goods is aimed at reducing the cost of imported products and allowing more products to enter the Chinese market. Consumers do not have to go abroad to "buy goods" or "sea panning", so they can buy these goods at a reasonable price in China.

Although there is no detailed document showing the specific tax reduction for each category, the clothing category mentioned in the tariff reduction document released by the State Council at the end of last year has been reduced by at least 50% on the basis of the original import duty rate. The largest decline category is only 1/3 of the original tax rate, and the import duty rate of perfume and toilet water, lip and eye cosmetics is reduced from 10% to 5%.

Another analyst pointed out that Muji's frequent price cuts in recent years, in addition to China's tariff policy adjustment, another reason is that group performance growth is gradually slowing down.

In 2016, the growth rate of Muji's parent company's quality plan was the lowest in three years, and its total revenue was 333 billion 381 million yen, or 19 billion 500 million yuan, representing an increase of 8.4% over the same period last year. The profit was 382.78 billion yen, or about 2 billion 200 million yuan, representing a 11.1% increase over the previous fiscal year.

After several price adjustments, the performance of the good plan has recovered since last year, and the growth rate has accelerated. The group's operating income in the fiscal year ended February 2018 increased by 13% to 3795 billion yen billion yen, or about 22 billion 200 million yuan, and net profit rose 16.6% to 30 billion 100 million yen, or 1 billion 700 million yuan, which has recorded a profit rise for four consecutive years.

In the 2018 fiscal year's revenue structure, China's market revenue rose the highest, surging 25.3% to 68 billion 890 million yen, or about 4 billion 30 million yuan, has become the world's second largest market for MUJI products, and has more than 200 stores in China. Besides traditional stores, there are also Muji hotels and restaurants.

As of May 31st, the first quarter of fiscal year 2019, the income of good plan increased by 9.7% to 106 billion 521 million yen, or 6 billion 400 million yuan, operating profit increased 12.2% to 13 billion 319 million yen, or about 800 million yuan, and net profit rose 21.7% to 9 billion 542 million yen, about 570 million yuan.

It is noteworthy that MUJI The second step is to accelerate the preemption. Young people market 。

Now, Muji has changed its dominance in the way of life in China. Since last year, the major clothing giants in China have been eyeing this big cake. Last February, Jiangnan cloth group launched the home brand "JNBY HOME", which was divided into two product lines, REplay and jnby+. In January this year, Taiping bird. Clothes & Accessories It announced that it would spend 23 million 250 thousand yuan on cross-border fashion homes.

In February of the same year, Hai Lan Jia's lifestyle lifestyle home brand Hai Lan optimized living museum landed on the micro mall after landing in Jiangyin, Zhangjiagang, Suzhou and Wuxi in Jiangsu province. Some analysts expect that in 2022, Hai Lan optimized the terminal sales scale of the life hall to reach 1 billion 170 million yuan. Considering the company's early development strategy, the store will directly run the business, and the composite growth rate is expected to reach 74% over the 2018-2022 years.

In the face of increasingly fierce market competition, Muji selection has joined hands with domestic e-commerce giants to further consolidate its leading position in the industry.

In June of this year, Liu Qiangdong, chief executive officer of the good quality program, met with the chairman and chief executive officer of Jingdong group, Beijing, and visited several "unbounded retail" samples from Jingdong. MUJI products entered Jingdong to participate in the "618 grand ceremony" and become sales of clothing, home textiles, home appliances, TOP3, and men's French flax slacks became TOP3 products. In less than a month, MUJI Jingdong's official flagship store has gained 140 thousand attention.

Some analysts pointed out that Jingdong holds that the data of China's middle class are matched with the core consumer groups of MUJI products, plus Jingdong's first-class distribution and warehousing services can effectively reduce the time and financial resources of the self built channel of the brand. At the same time, working together with MUJI products is in line with Jingdong's strategy of testing the quality of e-commerce through the brand concept of "Jing Zhi Ji" and "Jing Zhu" in recent years. The two can complement each other.

At the same time, Muji's shopping app MUJI passport is officially launched. Consumers can directly browse the brand official website through this APP, purchase orders, inquire orders and apply for after-sale, so as to achieve the integrated shopping experience of mobile terminals.

However, even though price cuts have laid the groundwork for the channel to sink and expand the consumer base, matakawa still admits that the development prospects of MUJI products in the Chinese market should not be taken lightly. In view of the continuing instability of the global geo economy and the consumption enthusiasm or decline of the middle class, competitors such as UNIQLO and UNIQLO are also starting to accelerate their enclosure in Asia, and the future of Muji will remain difficult.

For the 2019 fiscal year, the plan is expected to increase business revenue by 11.8% to 424 billion 300 million yen compared with the same period last year, operating profit rose 10.4% to 50 billion yen, and net profit rose 10.6% to 33 billion 300 million yen over the same period.

Since the beginning of this year, the share price of 7453.TYO has fallen by more than 9%, and its market value is currently 890 billion yen, or 54 billion 900 million yuan.