MUJI Cut Prices, Flatter, Push More Formats And Embrace New Retail.

In fact, Muji has been courting China through several price promotions before testing new retail outlets.

The consumers.

Cut prices to please

Pushing many formats to embrace new retail

In June 28th, Muji, released by official WeChat, said that the Beijing mufang store, the flagship store of Muji "three in one project", which was originally expected to open in March 20th, will open in June 30th.

It is worth noting that this is the first three in one flagship store in Shenzhen after the first three in one flagship store in China.

It is understood that the new MUJI HOTEL launched by Muji is jointly planned by Tokyo UDS Co., Ltd. and its wholly-owned subsidiary, Yu Du Si and Co., Ltd., and UDS, Yu Du Si completes the decoration design and is operated and managed by the company.

MUJI HOTEL has not only the world's first batch of Muji vending machines, but also self-service laundry rooms and free bicycle rental services in the guest rooms.

At the same time, the MUJI Beijing shop on the ground floor of the hotel also opened on the same day and purchased some furniture and decorations in the hotel rooms.

In other words, MUJI HOTEL is not only the forerunner of Muji's entry into the hotel industry, but also the Muji's attempt to accept the new retail trend.

And there are signs that Muji is constantly implementing the new retail concept to fully cater to the development of the Chinese market.

In addition to the flagship store recently opened in Beijing, Muji has also opened cross-border stores integrating Caf & &Meal MUJI restaurant in Chengdu and Shanghai.

In January this year, the first three in one flagship store in Shenzhen's Shenzhen industrial city was officially opened.

At the end of last month, Muji world stores opened, and stores in Xiangyun Town will soon open.

As a matter of fact, before mutilate the new retail business, Muji has already been able to satisfy consumers in the Chinese market through many price promotions.

In January of this year, Muji announced that the company will launch the largest "new pricing" campaign in history. This event includes 7 commodities, such as small business and imported food, and this is the eighth time since the entry of Muji into China.

Since its entry into the Chinese market in 2005, Muji has been criticized by consumers for its large price gap between China and foreign countries.

In October 2014, Muji announced its first "new pricing" campaign, mainly targeting grocery stores. The average price of goods in over 100 categories was 17.5%. In 2015, it continued to cut prices for three times, and two of them were mainly aimed at grocery stores.

In August 2016, Muji announced that more than 500 items of goods were on sale at the store, with furniture prices falling by 67%. In January 2017 and August, Muji again launched a price reduction campaign for furniture products, and furniture prices also fell by more than 60%.

Because of the brand effect, Muji has gained a lot of "loyalty powder" in the Chinese market, but in fact it has been caught up in the passive situation of slowing sales because of overpricing. In order to stimulate sales growth, price reduction has become one of its most frequent "big moves" in recent years.

Declining performance

The Chinese market is a battleground.

According to the 2017 performance report released by the Muji company, the company's total revenue last year was 379 billion 500 million yen, an increase of 13% over the same period last year, and its net profit was 30 billion 110 million yen, an increase of 16.6% compared with the same period last year. This is already a four year profit increase for Muji.

Among them, China's market revenue was 68 billion 900 million yen, an increase of 25.4%.

The reason for the rise in China's market revenue is that Muji has opened up more.

The sales revenue of newly opened stores increased by 4.6% last year.

This data is not really eye-catching compared with 20% in 2015.

Although Muji's performance in China is encouraging, its performance from last March to August can be found to be largely due to the stimulus of its price reduction strategy.

MUJI has launched two price promotions in the past six months, of which furniture prices dropped from 5% to 20% in January.

The price reductions in August were household, electronics and health beauty categories, with a decrease of 67%, 21% and 24% respectively.

After the implementation of the price reduction strategy, the company's sales outlets increased by 7.9% compared with sales, and the direct passenger business grew by 7.5% year-on-year.

In this regard, Muji said in the earnings report that the price reduction not only attracted new customers, but also increased the repeat purchase rate of old customers.

But for an enterprise, price cuts will not only significantly reduce the brand's status in the minds of consumers, but will also continue to suppress brand profits.

In June 30th, Matsuzaki Kyo, President of the Muji operation company's good quality program, announced that the company will develop specialized products for the Chinese market in Shanghai from September.

It has to be mentioned that MUJI products were mostly developed in Japan and sold around the world.

But considering that the number of stores in China now accounts for 1/4 of the world's total, the good plan has decided to develop new products that meet the needs of Chinese consumers.

In addition, in 2017, Muji has opened 29 new stores in the Chinese market, compared with the number of 40 new outlets opened between 2016 and 2017.

Song Chi also said that Muji now attaches great importance to China.

The number of stores in China reaches 235, second only to Japan.

In the future, it is expected that 30 new stores will be opened annually to further expand the Chinese market.

The importance of Chinese market for MUJI products is evident.

Confirmed habits are hard to get rid of

Helplessness accumulated over the years

Due to the different national conditions, although the Japanese entity retailing industry is also suffering from the impact of the electricity supplier, the traditional retail industry can still maintain a strong development. This can be seen from the performance report of the one or two.

In 2017, Muji's revenue in the Japanese market was 2347 billion yen, an increase of 8%.

The same store sales increased by 6.8%, the best achievement in the past five years, and this achievement was achieved on the premise that the stores basically did not expand.

However, the development of MUJI products is not so good as China's market is becoming more and more powerful.

Although Muji has entered China for 13 years, the number of stores has already exceeded 200, but its sales growth in China has been declining in recent years, which is worrying.

On the one hand, the market of Muji has been overpriced relative to the overseas market.

Although the brand has been bundled with cheap quality in Japan, it has become a high priced brand selling art and petty bourgeoisie after entering China. This is also a major reason why Muji has been unable to capture more consumers in the Chinese market for many years.

On the other hand, it comes from the environment where Muji is not suitable for the electricity supplier.

In the consumer market dominated by giants such as Alibaba and Jingdong, the desire to develop online business on Muji is not strong, and the experience of consumers still needs to be perfected.

Fortunately, as of June this year, Muji was finally launched on the Jingdong flagship store, and the product was officially launched on Tmall Jingdong dual platform.

Since January this year, Muji has been moving frequently, not only to embrace new retail outlets, but also to open up sales channels under the online and offline channels, and constantly release information to carry out multi format layout to meet the needs of Chinese consumers.

But in the crisis of slow development and fierce tigers, it is still a big question whether the Muji that weighs ahead can play a beautiful "back fire".