Revelation Of 28 Years Of Sea Going To The Sea

In 1980, Muji was born as the private brand of Sai you supermarket in Japan. As a Japanese parity home retail brand, MUJI products are cheap and quality products.

In 1989, the Muji company was officially registered. After the next year, it obtained all the management rights from Xi you, separated from Xi you, and opened the chain of replication and expansion.

MUJI started its overseas expansion in 1991, and has successfully opened its stores to 27 countries in the world in 28 years.

According to the MUJI products official website, there were 474 stores in all kinds of MUJI products in 2017, exceeding the number of stores in Japan for the first time.

In the 2017 yen, 380 billion yen revenue, overseas stores contributed 38%.

MUJI scheme reached 500 billion yen in 2020, and overseas stores contributed 42%.

However, the way of Muji's voyage to the sea was not smooth sailing. It even suffered a continuous loss in the first 11 years. It was not until 2001 when Matsui Chung three became president that he gradually explored the methodology of opening stores overseas.

In the book of Muji's world view, Matsui Chusan reviewed the reasons for the failure and the experience of reversing it.

Downturn (1991-2001): lesson from deficit for 11 consecutive years

In 1991, Muji first overseas store opened in London and opened a store in Hongkong in the same year.

Two stores are the starting point of the European and American markets, and one is the starting point for Asian overseas markets.

MUJI early opened shop and chose cooperation mode. The first store was set up with 50% of London Free department stores, but after six years of operation, the Department of free store was in a predicament and had to cooperate with it.

Hongkong stores have exposed the operational problems facing the cooperation mode.

MUJI was a joint venture with the Yongan group in Hongkong, and entrusted the operation rights to Yongan group.

Considering that Asian consumers have a higher degree of acceptance of Muji, they shop more frequently than Europe and America, and reach 13 stores in the rush hour.

However, people in Yongan group rented the shops in accordance with the price of real estate companies, and the rent was very high.

Moreover, managers are ignorant of Muji's brand culture and sales strategy, resulting in a dismal turnover.

In 1997, when the Asian financial crisis broke out, shops rents rose sharply, and the operation of the Yongan group deteriorated. Finally, the two sides could only dissolve the joint venture company, and the shops were all closed and withdrawn from the Hongkong market.

After Hongkong's defeat, Muji has put its energies into the European market.

Before 1998, Muji has maintained one or two stores in Europe every year. It became five stores in 1998, eight shops in 1999, and seven shops in 2000.

This time, Muji or not a complete set up shop system, resulting in more open, more closed.

On the other hand, Muji commodity prices are also not competitive in overseas markets.

In the early days of the sea, Muji had to pay high store rentals, plus goods exported from Japan to overseas stores, which led to over three times the price of goods in overseas stores, which made it difficult to establish a good and cheap brand impression in overseas markets.

Matsui Chusan concluded that the main reason for the continuous loss in the first eleven years of the voyage was that it was unplanned and only knew that new shops were being opened up.

But even so, Muji has not stopped exploring overseas. One of the main reasons is that Muji has been doing well in China (Japan).

Matsui Chusan recalled that before and after the financial crisis, Muji's turnover in Japan was more than one hundred billion yen, and its profit exceeded thirteen billion yen.

It can also be seen that the basic premise of Muji's entry into the sea is the rapid growth of domestic business, which can be used to pay for the failure to open stores overseas.

It was not until 2001 that the management of Muji's overseas stores became more and more serious. The loss reached an unprecedented 3 billion 800 million yen. The company began to reform, and Matsui Chusan became a president.

Growth period (2001-2012): re examining store opening strategy

In 2001, Muji returned to Hongkong to open a store. This time it was operated by itself, employing local staff in Hongkong, and strictly controlling the rent of shops.

MUJI still opted for a good quality location in Hongkong, but it doesn't rent expensive street stores, but it is similar to the three or four reasonable price points of the building.

This has also developed into the principle of Muji shop: that is, in the first class area, to abandon "first class", and look for places such as second, third and so on, and do not open shop in places where the rent ratio is beyond control and the turnover is less than 15%.

In addition, a set of Chinese shop evaluation system jointly studied by Muji and Peking University to assist the opening of shops. In this scoring system, different configurations correspond to different scores, such as whether they are near the station, whether there are cinemas, the size of nearby supermarkets, and whether there are famous merchants, etc.

On the one hand, Muji has set up a new shop strategy and more rationally. On the other hand, it has also assessed the opening stores and shut down unreasonable stores.

Matsui Chusan found that some European stores opened up tourist attractions such as Le Louvre Museum and Disney.

Despite the high volume of traffic, customers have no reason to buy Japanese goods at European attractions.

And lots are good, natural rents are high, and these stores are the main source of the deficit.

So Muji has closed some European deficit stores.

The new store in Hongkong has achieved good results, and the internal atmosphere of the company has improved.

Coupled with the closure of Europe's deficit shops, overseas business has been profitable since 2002.

Under the reform of Matsui Chusan, Muji has begun to explore the direction of overseas strategy: focus on overseas markets in East Asia.

Since 2002, Muji has been the center of China's Asian market. The number of shop opening has remained at two digits every year, but it has not been closed in Europe. But in Europe, it is still necessary to turn off two or three stores every year.

From the official website of the company, it is obvious that the number of stores in East Asia is much higher than that in Europe and the United States.

This shows the influence of Muji, which is permeated with the culture of Zen, which is easier to be accepted by consumers in East Asian countries.

In contrast, European consumers' advocacy of noble culture, coupled with their own historical reasons, may be inconsistent with Asian brands.

The other reason is that more countries are in the period of economic growth.

Matsui Chusan said that the best way to judge a country's economy is to see the number of motorcycles in a country, which means that the country is still at the early stage of economic development.

There is great room for growth.

When a country is in the period of rising, its success rate will be higher, and it will be moved to the local consumers.

Obviously, Muji has entered the Chinese market in 2005, which is to see the great potential of the Chinese market.

Leap forward (2013 to present): can overseas business continue to take off?

After 2013, Muji's overseas business entered a take-off period.

In 2013, the overseas business unit's revenue was 28 billion 400 million yen.

By 2017, overseas business revenue increased to 144 billion yen, 4 times 5 times.

In the 2017 earnings report, president Song Qi Xiao said the East Asian market in East Asia's overseas business was the main driving force for growth.

In this regard, China is undoubtedly the top priority.

By the end of 2018, Muji has 256 stores in mainland China, accounting for 50% of Muji's overseas stores.

However, Muji has faced some challenges in China in the past two years.

MUJI is not a cheap brand in the Chinese market.

Although prices have been cut through logistics and supplier exchanges, the price of Chinese and Japanese commodities is consistent in 2020.

But even if the price is uniform, Muji prices are still very high, mainly due to the large disparity in per capita income between China and Japan.

In 2018, the per capita disposable income of the whole country was 28228 yuan, while the average Japanese yen was 1 million 764 thousand and 864 yen / year, or 104127 yuan, about 5 times that of China.

Therefore, the same 400 yen (about 24 yuan) of a pen, Chinese consumers will assess the cost-effective, after all, the ordinary pen on the market only 2-5 yuan.

Plus tariffs, exchange rates, logistics and other reasons, Muji is difficult to achieve the ultimate in China cheap.

MUJI itself is aware of this. In China, the most obvious position is to open a large store.

By the end of 2018, Muji has set up 4 world flagship stores in China, with an area of about 3000 square meters, 5 times the number of standard stores in China.

But on the other hand, there are more and more domestic retail brands in the Chinese market, such as famous products, noble products, NetEase's strict selection, Su Ning poles, and millet products.

These new brands aim at cost-effective products, and imitate all kinds of explosive products to intercept new middle class users.

According to the third quarter earnings report of Muji, in the first three quarters (February 2018 to November), the sales of Muji in the Chinese market was 53 billion 635 million yen (about 3 billion 347 million yuan), and the sales volume of stores fell by 1.5% in 2018.

Despite the resistance, it has to be said that the Chinese market has not yet appeared to be rivals in the brand positioning and influence of Muji, and it still plays the role of "mentor".

At present, many new Chinese brands are exploring overseas markets and exporting products and services of Chinese culture. As a 28 year old brand, Muji's experience of sea going is of great reference value to new brands.