Price Cuts Can't Save MUJI Products.

In March 22, 2019, MUJI WeChat official announced that it would "change the price and make changes for China" and said that it had developed a series of "China needs" commodities and expressed its sincerity to Chinese consumers.

This time, the price of bed products dropped to 560 yuan, a decrease of 36%. At the same time, the price of T-shirts decreased from 78 yuan to 58 yuan; some stationery products, the tag price was 35 yuan, and the discount price was 18 yuan, a drop of nearly 50%.

This is the eleventh reduction in Muji in five years. Price cuts are naturally useful, but the use of price cuts is also limited.

In the first quarter of 2019, Muji sales fell 3.9% in mainland China. This is not the first time. As far back as the three quarter from March 2018 to November, the sales of Muji in the Chinese market had dropped by 9% compared to the same period last year.

On the contrary, in China's local market, all the apprentices such as NetEase's strict selection, Taobao's heart election, millet products, famous brands and excellent products have all learned the essence.

This is the story of a church apprentice who has starved to death. Is there any apprenticeship, Muji and the future to face the storm?

MUJI failed?

The first to feel the decline of Muji is front-line staff.

On a Friday afternoon, there were five employees in the Muji store in Hangzhou, Zhejiang. Two were on the side of the cash register, one was near the fitting room, and another two were in the shop.

Public reporters waited in the shop for several hours and found that there were few visitors in the afternoon. One employee told reporters that the business on weekdays was relatively light, and that the passenger flow at the weekend was relatively more, but compared with the UNIQLO, it could only be said to be normal, far from being "bustling".

This store in Hangzhou is only a microcosm of Muji's sales in China.

In recent years, Muji has expanded rapidly in mainland China, increasing at the rate of twenty or thirty stores a year.

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.

Despite the increasing number of stores, the transcript of Muji produced in mainland China is not good looking.

In 2018, Muji's single store revenue in China was $2 million 630 thousand, as early as 2008, the figure had reached $2 million 340 thousand. In the past ten years, it only increased by 12.5%, compared with a slight increase of 3.5% in the previous year.

From the histogram, three, 2016, 2017, and 2018 for three years, Muji's single store revenue is basically on a horizontal line, and there is not much change.

Look at the sales revenue and proportion of Muji in mainland China.

Since 2008, the curve has been rising up to 16.23% in 2017, when the number of stores in mainland China was 200. By 2019, the number of stores increased by 56, but the proportion of sales in mainland China increased by only 1.21%.

Relying solely on the expansion of offline stores has been unable to boost sales revenue.

Three years data show that Muji has been rising in China since 2017. More serious is the fall of some key data.

In October 2018, Muji's parent company's good quality plan released its earnings in the second quarter of the year. It has been mentioned that since the entry of mainland China, Muji has fallen by 2.2% compared with the first time in sales, and the income in the first half of the fiscal year has dropped by 0.2%.

Influenced by the mainland market, the earnings report of Muji's parent company's good plan is not good, and its profit and profit margins have declined compared with the same period last year.

The burst is always started from a casual failure. This Muji's dilemma seems to be a decline in sales in the mainland of China, but in fact, looking at the long history of enterprise life, it will be found that it has arrived at a life and death type bayonet.

　　 Once high up, now a price cut?

In 1978, the second oil crisis broke out, the world economy was in great trouble, and Japan was also plunged into the great depression. Two years later, the Sai Wu supermarket of the West Wu group launched "Muji", meaning "no label good products".

This ingenious idea has become the biggest selling point. The "no label" Muji has become a well known brand.

Years later, it expanded from 9 kinds of household products and 31 kinds of food from the beginning of its birth to thousands of SKU, and sales channels from supermarkets, daily use stores and convenience stores to direct stores, and expanded from Japan to dozens of countries and regions.

In July 2005, Muji produced the first store in mainland China in Nanjing West Road, Shanghai, and opened second stores in Xidan, Beijing three years later.

The location of Shanghai's Nanjing West Road and Beijing's Xidan Joy City is the positioning of Muji in China.

The same product, which has changed itself in mainland China, has become a light luxury brand. It is hardly feasible to open the market. But in those years, Chinese people still had some misconceptions about foreign brands, and the simplicity and artistic style of Muji itself really attracted a lot of loyal fans.

So, entering the mainland market for ten years, Muji's sales performance is booming.

In December 2015, the flagship store of Muji 3000 square meters opened in Huaihailu Road, Shanghai, and queued for more than 100 meters.

At this point, Muji has also reached its peak in China. But then, the long and painful downhill.

"China is the most important market for Muji." Yamamoto Naomiyuki, a former managing director of Muji China, said.

MUJI has already sniffed the direction of this important market. In October 2014, it announced its first "new pricing" activities in the Chinese market for the first time, with an average price reduction of 17.5% over 100 categories.

Thereafter, the price will be lowered every six months. So far, the price has been reduced by 11 times, but the effect is not obvious.

After visiting many Muji stores, the public reporters found that the most popular ones were T-shirts and stationery products with higher price and higher price. However, the home products with higher unit price are rarely asked.

In a store, the only purchase of household products in the morning was a young couple who chose a pillow. They told reporters: "we feel that the price is still high, but we need it urgently. There is no alternative alternative here. We can only buy one more."

MUJI will call "price reduction" as "new pricing". It does not want to destroy brand tonality at low price. It wants to retain old customers while pulling new customers.

But the reality is probably that the new customers have not come, and the old customers have left.

Take this hard case as a case, 19L's small pull rod box will still cost 858 yuan after the price is cut. For price sensitive people, pricing is still too high. Why do not consumers buy Samsonite or RIMOWA when they focus on brand adjustment?

　　 Why do Chinese consumers not buy it?

In 2017, "3. 15" exposures MUJI products from Japan's nuclear radiation area; in January 2019, Muji hazelnut oatmeal biscuits were detected carcinogens; in March, a bottled water was found to contain over 590 thousand potential carcinogens and recall of 590 thousand bottles.

To do business, cheap and good is the first class, the price is high, the quality is the second; if the price is expensive, then who will pay the bill?

China's middle class consumers are becoming more rational. They are no longer superstitious about foreign brands. They also learn to pay for products with high cost performance.

The Muji has been "alone in the mainland" in mainland China. But in recent years, local brands have grown and competition is fierce.

In 2013, "famous brand" was established, and as of December 2018, it has 3400 stores worldwide.

In April 2016, the NetEase was strictly elected and directly linked to the big name manufacturers. It was called "parity Muji" since the first day of its existence.

In April 2017, millet was born, relying on Millet ecological chain system, using millet mode to make consumer goods.

In May 2017, Taobao's heart election came out. On line, there are over 2000 SKU and more than 800 standard products in one year, attracting over 100 million visits.

Seeing that the disciples, who were born only three or four years ago, are getting more and more prosperous. The management of Muji has become more anxious.

This is not, at the beginning of 2019, eight years later, Yamamoto Naomiyuki, the managing director, also stepped down to Shimizu So. The question is, can he turn the tide?