MUJI Products, New Pricing, Resist External Shocks, But Have Little Effect.

After the continuous decline in the same store sales in China and two food products suffered from genetic carcinogens, Japanese mugwear and clothing brand MUJI Muji performance continued to slump.

In January 23rd, reporters at MUJI Beijing Aegean Sea store found that clothing and lifestyle goods depreciate at 6%-30%.

Meanwhile, the goods in the Muji's official website are also on sale.

This is the tenth price cut for Muji in China.

Despite frequent price cuts, it is still difficult to mobilize the enthusiasm of consumers.

In addition, many competitors are encroaching on the Muji market.

Expert analysis, enterprises need to seek a "new door" outside the price cut.

Multiple "new pricing"

After the outbreak of carcinogens, the price of Muji will be pushed back to the consumer's perspective.

Recently, the Beijing business daily visited the Aegean gate shop and found that Muji was once again reducing its price.

However, both consumers and Muji have been indifferent to Muji's tenth price reexamination in China.

Reporters saw at the store that the new pricing involved dozens of products in clothing and lifestyle categories, with a price cut of 4-162 yuan, at 6%-30%.

Among them, no side seam double yarn woven pajamas series, the original price of 298 yuan, the new price of 248 yuan, a decrease of 16.8%.

The price range of large capacity ultrasonic perfume machine is 29.5%, from original price 550 yuan to 388 yuan.

At the same time, the reporter noted that the price reduction for the entire line price adjustment, from online official website, Tmall, Jingdong and other flagship stores, to offline stores, unified implementation of the new pricing.

It is understood that Muji 10 "new pricing", price reduction products involving categories, including household, electronics, health beauty, clothing, life and other products, basically contains MUJI products sold in all categories.

In order to cater to the Chinese market, Muji has repeatedly implemented price cuts in the Chinese market.

In August 2017, Muji announced that Chinese shops would open new prices in autumn and winter, after which the brand had made 6 price cuts in the Chinese market.

Among them, the household price cut was 67%, electronic category and health beauty category reduced by 21% and 24% respectively. The price reduction was officially implemented in the Chinese market in January 2018, and is called "the largest price reduction in history".

In September last year, Muji announced the implementation of the Ninth "new pricing". The price reduction products were mainly concentrated in clothing and daily life, covering more than 500 kinds of products, such as T-shirts, shirts, down garments, lipsticks, carpet and air purifiers. The price difference was about 15-1180 yuan, the price range was 14%-40%, and the price of household products was 40%.

External shocks

For the "new pricing" issue, MUJI China headquarters responded to the Beijing Commercial Daily reporter, saying that the "new pricing" initiative was formally implemented in October 2014, basically two times a year, and that the new pricing is permanent pricing.

The price of MUJI products in the Chinese market is not intended to increase, but the tariffs and factory manufacturing in China have led to price rises.

At the same time, the brand has gradually put some factories in the country to ensure that the price is reduced, which is also the reason for the price reduction in batches.

In addition, in the case of stable sales, the purpose of choosing a large scale price reduction is to increase consumers' shopping consciousness and hope to increase the number of consumers through large-scale discounts, expand the market and increase sales.

Beijing business daily correspondent compared with Japan's official website found that a 2.5 person seat width handrail sofa main body in the domestic original price 4500 yuan, the price reduced to 3150 yuan, while in Japan official website the same product sells for 57 thousand and 900 yen, approximately Renminbi 3584 yuan, is higher than the domestic 434 yuan.

However, in March last year, a 3 seat seat with a feather and feather independent bottle type spring cushion was priced at 7400 yuan in the country, while in the Japanese official website, the price of the same product was 92 thousand and 900 yen, equivalent to RMB 5574 yuan, which was 1826 yuan lower than that in the domestic market.

It is not hard to see that the price of products after the implementation of the new pricing is gradually approaching the Japanese market.

In addition, tariff reductions were made in 2018, and many international brands lowered product prices. Muji also had to continue to push forward the "new pricing" process.

During Muji's struggles in China's market layout, the rapid rise of NetEase's strict selection, MI Jia products, Taobao's heart election and Beijing's manufacturing platform will undoubtedly impact the MUJI products with high price.

The Beijing Commercial Daily reporter saw in MUJI China's official website that a 70cm * 140cm bath towel was priced at 180 yuan, while the same type of bath towel made in Beijing was priced at 99 yuan. The NetEase's strict selection of the same type bath towel was below 100 yuan, which was lower than the price of MUJI.

Yang Dayun, a fashion industry investor and excellent Italian CEO, told the Beijing Business Daily that Muji has attached great importance to the Chinese market. From the price reduction to the opening of stores, we can see that the company is trying to expand its Chinese market.

However, as NetEase and millet and other Chinese enterprises learn the price and quality of MUJI products, the cost and price of the local market will be more powerful, and the Internet channel will be more aggressive than Muji, and will have a great impact on MUJI products.

Little effect

Frequent "new pricing" measures also failed to make MUJI products achieve rapid growth in the Chinese market.

According to the latest results of the Muji fine parent company's good plan, in the two quarter of fiscal year 2018, the Muji China market fell by 2.2% compared with sales, and the operating income in the half year of the Chinese market was 36 billion 168 million yen, down 0.2% from the same period last year.

From the two quarter of fiscal 2018 to the two quarter of fiscal 2019, the company's operating income in the Chinese market increased by 22.6%, 21.2%, 18.3%, 14.8% and 10.4%, respectively, and the operating revenue growth showed a gradual slowdown.

Yang said that Muji could encounter greater obstacles in the Chinese market in the next five years or even make it difficult.

From the perspective of brand development, in addition to market factors, the strength of competitors is also an important factor affecting the brand.

Nowadays, the cost performance of Chinese goods is not simply achieved by reducing prices and reducing manufacturing costs. Internet companies such as NetEase use the electricity supplier to change the supply chain to reduce costs and achieve high performance price ratio. At this point, Chinese enterprises are more capable of coping with consumer demand and have more room for improving service quality.

Guo Zengli, director of the China shopping union Shopping Center Committee, told the Beijing Commercial Daily reporter that from the overall retail market, consumer behavior is changing gradually due to the upgrading of consumption.

Consumers have higher requirements for product quality, and are more inclined to choose brands with high cost performance and high reputation.

Because of the upgrading of quality, consumers' sensitivity to price is decreasing, and price reduction will not necessarily cater to the needs of consumers.

Therefore, for the retail brand, stick to the brand reputation, form an inherent image, improve the quality and optimize the cost management at the same time, and achieve the balance between price and quality.