Response To Crisis Muji Will Start "Strategic Store"

After several quality disturbances, Muji's "good quality" image finally encountered the last straw because of its inferior raw materials. In the wake of disappointing online reviews, Muji Chinese companies are also looking for ways to save themselves.

In July 23rd, the relevant person in charge of muimi (Shanghai) Commercial Co., Ltd., who was interviewed by the Beijing Commercial Daily, revealed that it was about to launch a "strategic store" plan in the Chinese market, making differences with the Japanese national mode and increasing the proportion of local products.

The storm began with the recent announcement of Beijing's market supervision bureau that the nominal material of Muji part furniture is not in conformity with the actual material. In wood household products, raw walnut, known as walnut, plywood, nominal walnut, fiberboard, and white oak, are suspected of deceiving consumers. For this reason, Muji has also made an apology and promised rectification.

As for the cause of this problem, the relevant person in charge of Muji has explained that the domestic commodity "literally translated the commodity name of Japan".

A home industry analyst who declined to be named said that the materials used in the above products were different from the nominal materials, but the price difference between the actual materials was very different. Even the translation caused by the two countries also exposes loopholes in the company management process in the Chinese market. At the same time, the use of high quality timber in the country and the relatively low price of raw materials in the Chinese market will also be a pity for the "loyal powder" consumers.

"In the future, there will be some distinctive" strategic shops "in China, and the range of products will be different from those in Japan. In addition, the restaurant menu and service will also be different from those in the previous flagship store. We plan that by the end of 2023, the proportion of the localized commodities in the Chinese market will be increased to 50% of the total merchandise in the grocery department. In the interview, Muji gave the measures to be launched in the Chinese market in order to reverse the current situation. The person in charge of the Muji shop in Japan has its own characteristics, such as the supermarket in the North flower shop in Osaka, and the first floor of the flagship store in Ginza has local products such as fruits and vegetables, convenience products and so on, while the flagship stores currently open in China are all quite similar.

In fact, Muji has gone through a period of rapid development in China. The Muji company's good quality plan has just released its first quarter results in fiscal year 2020, showing that sales rose 5% to 112 billion 300 million yen in the three months ended May 31, 2019, and net profit fell 31% to 6 billion 500 million yen compared with the same period last year, the first time since 2014. In the past 2019 fiscal year, sales increased by 7.9% to 408 billion 850 million yen, operating profit fell 1.2% to 33 billion 850 million yen, and net profit rose 12.4% to 33 billion 850 million yen over the same period. China's market sales increased by 11.6% to 75 billion 90 million yen compared with the same period, and comparable sales fell 2.1% year-on-year. In the first half of fiscal year 2018, the Chinese market declined for the first time compared with sales, and the rate was 2.2%, which also led to a 0.2% decline in the revenue of the parent company's good plan.

In response to the slowdown in mainland China's performance, the relevant person in charge of Muji said that in the second quarter of the 2018 fiscal year, mainland China's revenue grew by 120.4% over the same period, while the second quarter of fiscal 2019 increased by nearly 111.1%. This is mainly due to inventory reasons. On the one hand, the internal circulation management system has been replaced internally. On the other hand, the make-up reservoir of the basic Moisturizing Series is also scarce, but now the problem has been solved.

Lai Yang, a special expert of the North Institute of Commerce and executive vice president of Beijing business economics society, said that strategic shops are important for the development of MUJI products in China. MUJI is a way of life that matches the lifestyle of the shop. Different regions have different characteristics of shops, which is also a strategy of differentiation in China. It has both its unified brand image and different regional characteristics. The so-called strategic stores and flagship stores are actually doing transformation, and no longer rely on expanding stores to increase sales in the past. It is to increase brand awareness and brand identity, and to increase revenue and increase consumer loyalty through this aspect.