MUJI China'S Profit Fell For The First Time In 8 Years, And Many Times It Was Exposed To Quality Problems.

MUJI will start a new story in the Chinese market by entering into home decoration.

MUJI official website publicity: since December 21, 2019, Muji has been involved in the home decoration business in the Chinese market. According to its official micro introduction, Muji is about to launch home decoration business in China with several enterprises. These include less ocean exchange, Haier whole house customization and housing.

In fact, Muji is only a public grocery store in Japan. It has become a symbol of high-end quality after coming to China. However, in the past two years, because of the emergence of local similar style brands, such as famous brand products, N ME, NetEase and so on, MUJI products prices have gradually stepped down from the "altar" and have been re priced several times.

A rough statistics from the Yangtze daily news showed that Muji has been cutting prices for 11 times in 2014 in the past five years to "curry favor with" Chinese consumers.

It has also raised concerns about product quality issues for many times. The Yangtze Commercial Daily reporter sketchy out that in the past three years since 2017, Muji has been exposed to more than ten quality problems.

The decline in operating profit and quality problems have caused concern. The competition between the two industries has intensified, and the Muji has been questioned. How long can the brand from Japan go to China? The Yangtze daily business reporter contacted the MUJI products by phone and e-mail, but no reply has been received before the press release.

It has opened more than 30 stores a year.

"Holidays and weekend guests are much more crowded than they were a few years ago." The number of Muji workers has been reduced and reduced. Recently, the Cheung Kong Daily reporters visited Muji shops in several major business circles in Wuhan, and found that even during the New Year holidays, there were not many consumers in the shops. There were only a few attendants in the huge shops, and most of them were discounted products. On the contrary, there are more holiday products in the shops near N, ME, and famous brands.

The decline of Muji is now in sharp contrast to its popularity in recent years.

MUJI (MUJI) was founded in Japan with the intention of "no trademark and high quality". Its advocacy of minimalism and environmental protection has been sought after and enjoyed by Chinese consumers.

In 2005, Muji opened its first store in Shanghai and officially entered China. Since 2012, Muji has been expanding at 30-50 stores a year in China. As of February 28, 2019, Muji has a total of 420 stores in Japan, and there are 497 overseas outlets, of which 256 are the largest in mainland China, accounting for more than half of overseas stores. Most European and Middle Eastern countries and regions have only a single digit number of stores.

The Muji company's good plan results show that in the 409 billion 697 million yen sales of Muji in fiscal 2018 (March 2018 to February 2019), sales in the East Asian market (except Japan) reached 122 billion 340 million yen, while sales in the Chinese market reached 75 billion 92 million yen, accounting for 61.38% of sales in the East Asian market (except Japan).

China's same store sales fell for the first time

MUJI products did not last long in China.

From 2016, the comparable sales growth of Muji in the Chinese market continued to decline: in 2017, the growth rate of Muji's same store sales began to slow down, and the negative growth occurred for the first time in the second quarter of 2018. The 2019 quarter of the 2019 quarter, compared with sales, the mainland market has dropped to 2.2%. And since 2016, the growth rate of China's single shop business interests of Muji has also begun to decline, and the growth rate of the third quarter of 2017 has been negative.

Recently, the first quarter results of the 2020 fiscal year announced by the good plan show that in the 3 months ended May 31, 2019, the sales of the good plan increased 5% to 112 billion 300 million yen (about 7 billion 100 million yuan), while net profit dropped 31% to 6 billion 500 million yen (about 400 million yuan).

In an interview with consumers, the Changjiang Daily reporter learned that Muji was loved by consumers, relying on its fresh and minimalist Japanese style and excellent quality, with a large number of fans, but the price did make some consumers feel too high.

For example, a single pine bedstead, Muji price 1000 yuan, IKEA with the type of only 249 yuan, cardboard cover box, Muji price 110 yuan -150 yuan, IKEA the same type as long as 39-59 yuan.

MUJI also realized the price problem, gradually stepped down the altar, and repeatedly priced the goods. Reporters rough statistics found that since 2015, in the past five years, Muji has 11 consecutive price cuts "please" Chinese consumers. Every time we choose some products to depreciate, there are many star word-of-mouth products, and they are also challenged that the products are not sold.

Search for new growth points in home decoration

Growth is slowing, sales of stores are falling, and MUJI products, which are losing consumers, are trying to find new growth points through diversification.

Recently, Muji has opened MUJI INFILL China's first store and the first demonstration space in Qingdao. It is located in the L2 layer and the B1 layer of the Ginza mall in Qingdao. The entire MUJI INFILL is provided by Muji, and the whole house custom service is provided by Haier's whole house home.

MUJI will provide MUJI INFILL home improvement service in China on the basis of a notice issued on the official website of Muji in China a few days ago. "From the ground, walls, roofs to storage, kitchens, sofas, beds, showers, bathtubs, bathrooms, the basic scenes of life, MUJI INFILL provides a one-stop service from planning adjustment to design and construction."

Zhang Shule, an industry commentator, told the Changjiang Daily reporter that the weakness of bidding for single category and competitive quality is the biggest problem for Muji in the Chinese market. Perhaps opening the home decoration mode will give it the possibility of reshaping the overall cognition and truly turning life philosophy into brand image.

Moreover, Muji, known for its environmental protection and high quality, is loved by Chinese consumers. However, it has been exposed to quality problems in recent years.

The Cheung Kong Commercial Daily reporter sketchy sorting out found that since 2017, Muji has been exposed to more than ten quality problems in the past three years.

In recent years, MUJI products have been repeatedly complained by consumers that there are no labels, no indication of origin, material and usage, quality and worry, and a lot of products sold on sale are frequently complained by consumers for a long period of time. However, the quality of Muji's official attitude is very strong and there is no sincerity of apology.

The industry believes that if Muji can not reinvent its production process and strengthen quality control management, more quality problems will emerge next. If there is a serious security problem, it will have a greater impact on the Muji market in China.