What Strategy Has Been Made In Recent Years To Make Japan'S Muji Brand Develop Well In China?

In recent years, Japan brand MUJI MUJI The momentum of development in China is good, with its simple Japanese style and high quality. product It is known to all. Recently, the second quarter earnings report of the 2017 fiscal year, released by Ryohin Keikaku Co. Ltd., the parent company of the Muji company, showed that although the growth rate of the parent company in the two quarter has slowed down, the overall operation is still healthy.

Mainland stores continue to expand

As of the two quarter of this year, the net sales of Ryohin Keikaku Co. Ltd. products increased by only 5.9% to 739.44 billion yen (1 yuan, or 14 yen), while the sales growth in the first quarter was 13%. In the two quarter, the total income of the group was 74 billion 181 million yen, an increase of 6% over the same period, which also slowed down sharply compared with the 13% quarter in the first quarter. In the first quarter of its earnings report, as of the first quarter of May 31, 2016, Muji turnover increased by 13%, net profit rose 27.2% to 76.71 billion yen.

Due to the rapid expansion of the mainland market, good plan is the best performing international retailer in the past year. However, in view of the slowdown in mainland China, the intensification of the property market bubble and the more concentrated consumption spending on tourism, technology and other experiential projects, the growth rate of the group in Mainland China will inevitably slow down, which has a direct impact on the overall growth rate of the Japanese parent company.

According to statistics, from March 2016 to May, the revenue of the East Asian Division of MUJI products accounted for 25.1%, of which China accounted for the owner. It is no exaggeration to say that China is now the largest overseas market of Muji. As of August 31, 2016, the 5 months of the first half of the fiscal year were fixed exchange rates, and the sales volume of mainland China sales increased by 30.1% to 264.32 billion yen, or 5.1%, higher than the 2.5% and 4.9% of Hongkong and Taiwan, but lower than that of South Korea.

Over the past year, Muji has been expanding in China. In the 2015 and 2016 fiscal year, they added 28 and 32 stores to mainland China respectively, and in the current fiscal year, they plan to open 40 new stores in China. By the end of February 2017, the number of stores in China is expected to reach 421.

But in the first few years of its entry into China, Muji development was slow, until 2011, there were only 38 stores in China. But in the past three years, Muji has maintained more than 30 new stores every year, and this year it will reach 40.

Robust expansion plan

As the main brand of good planning company, Muji was born in 1980. The starting point is to create a simple and comfortable low priced commodity by thoroughly realizing the rationalization of the commodity production process, and reexamine the commodities through "select materials", "modify processes" and "simplify packaging". For example, the bleaching process of paper pulp is omitted, the paper will bring light beige, Muji will be used for packaging materials or labels, creating a very pure and fresh commodity group. At present, there are more than 7000 kinds of MUJI products in clothing, grocery, food and even home. For many Chinese consumers, Muji represents "refined" and "minimalist" lifestyles.

Due to the slowdown in domestic economy and the impact of electricity suppliers, domestic retail sales are now in the bottleneck. As a foreign brand, Muji has maintained a good momentum of development. Under its rapid expansion, its footsteps have been surprisingly stable.

Yamamoto Naomiyuki, managing director of MUJI Shanghai headquarters, said in an interview with the media that they would first calculate whether the turnover would be profitable based on the benchmark of the shop, and if they could not meet it, they would not open a shop, and then they would open a store on the basis of profitability of every shop. Matsuzaki Kyo, the president of his parent company's good planning company, came to Hongkong, China to attend the opening activities of the new store. He also said he would maintain a conservative shop strategy and make a profit.

MUJI thinks that it is better to reduce rent costs than to pursue a poorly managed turnover. Therefore, Muji location strategy is aimed at the two place in the commercial facilities of the first class area as the location of the shop, for example, in the same shopping center, Starbucks opens on the first floor of the golden section, the Muji chooses the silver area on the third floor, so the rent will become relatively cheap. At the same time, most of the shopping centers in the country have fixed rent and sales commission, and the high quality of Muji has insisted on selling the rent as the rent principle. That is to say, in the domestic high rental shopping center, most Muji shops only pay 10% to 12% of the sales volume to the developers as rents, and such cheap rents are brought by the strong appeal of the brand.

In addition, Muji has been trying to adjust prices in order to obtain passenger flow. Since 2014, Muji has already made five rounds of price cuts, especially in the week after the latest new pricing campaign, sales increased by 170% compared with last year, and sales were almost two times that of last year.

In the view of no print, this price reduction can not be generalized with the discount promotion of traditional shops. Discount promotions may allow consumers to create a mental setting without discount, but after the price adjustment, no Indo is expected to realize the basic price of China and Japan in 2018. Moreover, unlike many retail brands that are vigorously developing the electricity supplier, despite the purpose of increasing turnover, Muji and Tmall cooperate to open flagship stores and have their own official website sales channels, but its official said Muji will still focus on the store as a main force to enhance the consumer's sense of experience.

However, there are also people in the industry who say that Muji has grown faster than the growth rate of consumer demand and consumption. So the growth of same store sales in the future may be further slowed down. In addition, compared with the previous years, this kind of minimalist lifestyle brand has also increased a lot in China. Both international brands and domestic brands are working hard to develop this market. For example, the famous brand top quality products with low price and high quality products are similar to MUJI products on labels and product styles, while Taobao and Tmall also have many original brands of similar styles.

Perhaps this pressure has been felt. In the past two years, Muji shops are also changing. Yamamoto Naomiyuki said that the era that early commodities can be sold on shelves is gone forever in China. Now, to attract customers, retail establishments must pay more attention to experience.