MUJI, China'S Market Is Down By Sales. Four Point Nine Percent Price Cuts Are Hard To Beat?

Simple, fresh and natural is the impression left by MUJI. From Japan to the world, Muji has been singing all the way, developing more than 900 stores and becoming the benchmark of global retailing.

However, with the rapid expansion, Muji has been continuously exposed to quality problems. In July 17th, the Beijing municipal market supervision bureau announced the results of random sampling of furniture quality in circulation area. 6 of the 11 unqualified furniture detected were from Muji, with an unqualified rate of 83%. Among them, the mudies found in the samples were not qualified, and the nominal materials were not in conformity with the actual materials. Subsequently, Muji (Shanghai) Commercial Co., Ltd. responded, "there is a problem with the identification of commodity names because of the translation of Japanese trade names."

According to reporters' incomplete combing, this is already Muji, the fourth time this year has been exposed to product quality problems.

With the frequent product quality problems, Muji's sales performance has also entered a bottleneck period. It is disclosed that in the first quarter of fiscal year 2020, the net profit of the parent company's good plan fell by 31% compared with the same period last year, and the comparable sales decline in the Chinese market has risen to 4.9% 。

In fact, with the rise of more and more similar lifestyle brands, Muji has been cut 11 times in 5 years, but it still can not escape the "disfavor" situation in the Chinese market.

In July 24th, in response to frequent exposure of quality problems and the future development trend of the company, the Yangtze daily news reporter sent an interview letter to the non printed products, but the other side did not reply as far as the press release.

4 quality problems were discovered during the year.

In July 17th, the Beijing municipal market supervision and Administration Bureau announced the results of random sampling of furniture quality in circulation field. The bulletin showed that 5 pieces of furniture produced by Muji were not compatible with the actual material. For example, there are 3 products named walnut, the actual material is black walnut and plywood, and two nominal beech solid wood, actually is water Fagus; nominal white oak, is actually fiberboard. In addition, there is a table wear resistance problem.

In response to the furniture sampling unqualified incident, in July 19th, Mui Yin made an apology to the consumers on the official public number and offered to provide customers with replacement services for the purchase of these 6 furniture. Next, the company will rectify the problems reflected in the incident and show that the monitoring of furniture products will be increased in the future. Many consumers are talking about the Internet, thinking that Muji is suspected of deceiving consumers and false propaganda.

In response, Zhang Keke, deputy director of Hubei Penglai law firm, told reporters in the Yangtze daily news that "Muji" acts obviously violated the consumers' right to know and to choose. The nominal material and the actual material do not conform to the typical fraudulent practices, and consumers can claim the liability of the Muji for a three loss in accordance with the provisions of the consumer protection law.

It is worth noting that, according to the Yangtze River Commercial Daily reporters do not completely comb, this is already Muji, the fourth time this year has been exposed product quality problems.

The more recent one was in April 2019. Muji had submitted a recall plan to the State Administration of market supervision and administration, recalling part of the imported painting notebook and stainless steel ruler. In January 15th, Muji was hit by news of carcinogenic risk of food, which had a serious impact on its brand image.

In addition, in September of last year, Muji had been uncooperative in the routine sampling inspection work of the Beijing industrial and commercial bureau. Later, according to the inspection results announced by the Beijing Bureau of industry and commerce, the 10 batch of MUJI products failed in the sampling inspection, and the main problems involved were fiber content, color fastness and other indicators.

Parent company net profit plunged 31%

By the end of February 2019, Muji has 917 stores in the world, covering 32 countries and regions.

According to statistics, the sales of Muji in the Chinese market accounted for 20% of the company's total revenue when it entered the Chinese market in 2005. But by the impact of Taobao electric business in 2014, Muji had to be re priced in the Chinese market. Meanwhile, the rise of many kinds of shops also made Muji feel pressure. In the face of competition pressure, Muji has frequently adopted a price reduction strategy.

According to the statistics of the Yangtze daily, the price of Muji has been reduced to 11 times in the Chinese market since the first price fixing in October 2014 to 5 years. In particular, at the end of August last year, the ninth price cut for Muji was 20%, the highest price being 40%.

However, Muji's performance declined. From the two quarter of fiscal 2018 to the two quarter of fiscal 2019, the quarterly income of the Muji parent company's good plan in the Chinese market increased year by year. 22.6% , 21.2% , 18.3% , 14.8% and 10.4% The growth of operating revenue is slowing down gradually.

In July 15th, the first quarter results of the 2020 fiscal year announced by the good quality plan showed that the sales of good plan increased by 5% to 112 billion 300 million yen (about 7 billion 100 million yuan) in the three months ended May 31, 2019, and net profit dropped 31% to 6 billion 500 million yen (about 400 million people's currency), which is the first time since 2014. Comparable sales decline in the Chinese market has risen to 4.9% 。

In response, Sun Wei, the first person in the top-level design, said in an interview with the Yangtze daily news reporter that "economic growth is weak and consumption purchasing power is overdrawn, resulting in a mismatch between high-end positioning and consumer groups of Muji, and through sales promotion, to a certain extent, reverses the decline in consumption."

However, in view of the decline in both revenue and growth, the president and executive director of Muji's parent company, Mr tasakawa, has repeatedly explained that the poor performance in China is entirely due to inadequate stocking in the supply chain process, which has nothing to do with the reduction in customer support for stores and the growth of brands.

In the face of fierce competition, Muji has begun to develop and extend its business. In June 2017, MUJI Diner, the world's first Muji restaurant, opened in the flagship store in Huaihailu Road, Shanghai. In 2018, Muji set up two hotels in Shenzhen and Beijing, MUJI Hotel, and Shenzhen's hotel was the first Muji world hotel.

In addition, in response to the Chinese market, Muji's "China needs" series of products launched in March 2019 also revealed a clear "please" intention. Through the customized adjustment of the product size in China, Muji hopes to make a clear idea of product strength.