What Is The Secret Of MUJI Products With Annual Sales Of 20 Billion?

A steady black

Inside, comfortable cotton and linen shirts, from head to toe, except for glasses and shoes, Yamamoto Naomiyuki has MUJI.

In fact, the style of pparent frame glasses is also very similar to Muji.

Yamamoto, managing director of (Shanghai) Commercial Co., said that after working for a long time, "I and Muji's aesthetic standards and values were in common."

In Muji.

In the concept, "commonality" is an important term, which refers to the common sense between people and things. It also refers to the unanimous praise of the concept of plain life between consumers and brands.

In the late 80s and early 90s of last century, Japan's land prices rose under the bubble economy, and the boom in speculation was widespread. Young people were scramble for the financial and real estate industries. However, young Yamamoto Naomiyuki was an exception. He had little interest in the "illusory" figures such as economic indices and stock prices.

After working for some time in a financial company, he submitted his resignation and pferred to industry to enter the Muji finance department.

"What I value is the value of things, and the supply of real goods to consumers."

Yamamoto Naomiyuki told reporters that Muji is such an industrial company.

Anyone who has experienced Muji shop will be able to feel its unique style: the tone is always white, beige or log color, and furniture, stationery, cosmetics and clothing are displayed in different categories. It is clear, bright, simple and comfortable.

Behind the visible products and decoration is the unique concept of Muji, a value that has persisted for 36 years.

Over the past three years, the number of MUJI products in mainland China has increased from 100 in early 2014 to 200 in early 2017.

In terms of the economic scale of 20 billion yuan, Muji is not outstanding, but the philosophy of its simplified design is special.

V formation

At the end of the 1970s, a Japanese businessman Diqing two invited the famous graphic designer Tanaka, a light designer, an architect, Sugimoto Nukishi and a three member of the Propaganda Department of the West Wu department store to gather together at home.

At that time, Diqing two is the president of Xi you company and runs Xi You department store.

It is not entirely true that there is a human figure, "Yung Diqing two", a real businessman.

In his spare time, he would spare time to write poems, essays and novels. His representative work, the rainbow Cape, was awarded an important literary prize in Japan.

Thanks to the deep talk of Japan's worship of big names and over consumption, people put together a strategy of "anti brand": producing simple, practical, low price products, letting things play their own value, fighting against gaudy, complicated and luxurious in a long, durable and comfortable way, and defining a new design concept "this is good."

In December 1980, the self created brand of Mui Yin's west department store came out, meaning "good products without labels".

In the early days of its birth, there were only 40 kinds of MUJI products, including 9 kinds of daily necessities and 31 kinds of food, and their sales channels were attached to Xi you food, daily store counters or family convenience stores.

Tanaka has designed two famous posters for Muji, to reflect the idea of Founding: a picture of a baby who staggers and crawls, named "love without decoration"; one is "a whole salmon". In the past, canned Japanese salmon can only take the most beautiful fish belly, remove the fish head and fish tail, and the Muji salmon can retain the whole bar, not waste.

In 1981, MUJI products were extended to cotton socks and T-shirts.

According to the concept of "home", Xi You department stores put its products in the same area, so customers who buy food for food will unconsciously see daily necessities and clothes, and many people even buy food and clothing together.

After a small test, the Muji set up a direct store in Qingshan District of Tokyo, with an area of only 103 square meters, and its varieties slowly increased to 700.

In 1989, when Muji was independent of Xi you, brand sales exceeded 10 billion yen.

Two years later, Japan was at the height of the economic bubble, and the senior executives with independent management decided to open up overseas businesses. The first overseas store was set up on the streets of central London, all of which came from Japan.

Subsequently, MUJI Hongkong shops opened successfully.

Statistics show that in 1998, the company made plans for 50 new stores in Europe in 4 years.

In 2000, the company set up shop in the underground street of Le Louvre Museum, Paris. It became a hot topic in Japan for a while. The scenery was boundless, and domestic and foreign businesses were advancing vigorously, making the company more and more complacent.

Unexpectedly, the hidden danger of high-profile expansion is immediately exposed.

In 2000, sales of Muji existing stores fell year-on-year, the first time in the following year.

According to the selling price, the backlog value is 10 billion yen.

Public opinion has shifted swiftly and the era of Muji has passed.

"From the financial statements analysis, there are problems in the current capital chain, and should not be tough enough to open stores overseas."

Yamamoto Naomiyuki, then finance minister, recalls frankly.

The results of the parent company's Muji plan show that in the 2000 fiscal year (March 2000 -2001 February, and so on), the group's current investment activities spent 9 billion 626 million yen, up 136% from the same period last year, and the "cash and cash equivalents" decreased from 6 billion 780 million yen to 3 billion 478 million yuan, which was reduced by nearly half.

At that time, Muji employees were mostly lack of overseas experience, and the management bodies were bloated. Sometimes a document would be covered by 7 chapters before it could be confirmed.

MUJI's commodity design gradually deviated from its original intention and became featureless.

"We only produce things that we think are good, and customers may not feel that way.

Apart from customers, the crisis has happened.

Yamamoto Naomiyuki once said publicly.

With a painful experience, Muji has begun to streamline single items, remove large quantities of inventory, shut down 10% of shops in two years, and the first stores in London and Hongkong have been abolished.

At that time, the Japanese economy was in the stage of deflation, and its consumption power declined and prices dropped.

Matsui Chusan, the former president of the hospital, was burning a lot of stock.

Later, he recalled, this is to stimulate employees and cooperative partners with the feeling of the scene. "If we can't make really good products, these things are useless for consumers."

In order to prevent stock hoarding, Matsui Chusan initiated the establishment of a series of regulatory mechanisms, emphasizing the "quantitative" judgment, making Muji business development and store management follow the rules, without being overly influenced by personal subjective will.

At that time, Yamamoto Naomiyuki's main task every day was to collect and sort out the feedback forms of customers in each store, giving feedback to the top management of the company.

At the same time, we should build a functional system of R & D, design and planning, strengthen design and R & D, put forward "world Muji", cooperate with designers all over the world, and encourage consumers to contribute to creative inspiration.

At that time, the sale of groceries accounted for 55%. When I heard that the chairs of famous designers in Italy were very rich in design sense, Muji had the initiative to cooperate with them. In costumes, they had no initiative to publicize with the famous designer Yamamoto Teruji, and only spoke with products.

Yamamoto Teruji participated in the design for second years, and the market reaction was very obvious at once.

After the rapid recovery of MUJI products after reform in 2003, Muji again went abroad cautiously.

In 2005, Muji set up the first direct store in Shanghai.

Before the establishment, the team spent a lot of time studying the Chinese market and studying the profit mechanism of the store. Every new store plan was personally investigated, managed and acted by the company's top managers.

Since 2006, China's commercial complex has been rising rapidly. Muji and H&M, ZARA and other fast fashion brands have enjoyed the "Chinese dividend". The popularity of Japanese and Korean culture in China and its distinct brand philosophy have also facilitated the expansion of Muji.

As of August 2016, the "Muji" program opened 362 stores worldwide, accounting for 173 in mainland China. In fiscal 2014 and 2015 fiscal year, mainland China added 28 and 32 stores respectively, and plans to add 43 to 2016 in fiscal year 2016.

"Without the layout of 3-5 years in advance, a large number of international brands have missed the best opportunity to enter China, and there are few enterprises with long-term vision."

Liu Changqiao, founder of the domestic clothing brand O.T.R, told the "21 CBR" reporter.

Customer thinking

Yamamoto Naomiyuki has had such a patrolling experience.

Once, he came to a Muji shop in Shanghai.

At the cashier's desk, it was found that nearly 10 people were waiting in line, but only one cash register was working.

Next, several employees are discussing things.

Seeing this, he asked whether other cash registers were broken and displayed his work permit.

When the staff were informed that they were general managers, they opened more cash registers.

Yamamoto Naomiyuki thought carefully: "this is not a good phenomenon."

Yamamoto Naomiyuki doesn't like to always be in the office. He often toured the front line to observe all aspects of the store.

In his view, Chinese and Japanese employees have slightly different ways of thinking.

He often asks Chinese employees a question: what is the most important thing in work?

"The most important thing is to think from the consumer's perspective, whether in the management or in the first tier stores."

Yamamoto Naomiyuki said.

In 2000, when Muji was at the bottom of the valley, Matsui Chusan, who was in danger, did not take the way of reducing wages and layoffs to reduce the operating costs of enterprises.

On the contrary, he visited all 107 stores in Japan. He spent the night chatting with the store manager and the staff at the grass-roots level, creating opportunities to listen to the "sincerity" of employees, and sometimes visiting shops to observe.

"Meeting does not produce much wisdom. We should use our own eyes and listen with our own ears."

After an in-depth visit, Matsui Chusan found that 100 store managers had 100 ways of placing products.

He understood that the operation of a company is independent of individuals and depends on the system. A sound system can inspire everyone to play their role, regardless of their ability.

If Muji sets a reasonable and standardized system, the difference in sales performance between employees will not exceed 10%.

The results of the system reform will eventually converge on two thick guidance manuals, one is the MUJI GRAM (MG), which will regulate the daily operation of the shops. There are 11 volumes of MG in Japan, 10 in China, and the other in the directing business of the headquarters staff.

These two handbooks greatly enhance the standardization and efficiency of chain operation.

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To provide the success rate of site selection, Muji has set up a "shop benchmark book". Its assessment contents include the market (area, retail turnover, population, age ratio, income gap, etc.), commercial facilities assessment (station location, parking space number, tenant number, etc.), shop category (area, Muji member network, distribution, etc.) three categories of more than 20 projects, staff according to objective data to give a score to judge.

For example, when the sales volume of a new store is not easy to control, Muji will choose the two floor of the first class commercial area from the cost of lowering the rental cost. It is assumed that the shop is located on the first floor of the same shopping center. If the first floor is a prime location, Muji will choose the third floor with relatively cheap rent and strong popularity.

The aim is to strictly replicate the store mode through strict system information management, so as to ensure that every shop can recover the investment cost as soon as possible.

It is reported that the success rate of Muji production is over 90%. In the 2015 fiscal year, more than 200 shops in the East Asian region (including the Greater China region and South Korea) closed only 1 stores.

Matsui Chusan once said: "134 Muji shops in 39 cities in mainland China (up to May 2015), average 15.9 months to recover their investment."

After entering the Chinese market, Muji will adjust the MG content according to the local characteristics.

Every week, Shanghai headquarters will receive 100-200 improvement plans from the mainland stores. All the problems found by all the shop assistants at the scene and the improvement plan can be voluntarily returned to the Chinese headquarters.

After examination by the sales department, at least 30-40 items will be placed on the conference table.

Yamamoto Naomiyuki and heads of relevant departments will spend 2-3 hours to discuss and formulate improvement plans.

If the improvement plan is reasonable and the effect is obvious, the new plan will be written into MG.

Yamamoto Naomiyuki told reporters that since the implementation of the business improvement system from shops in 2014, the number of Chinese MG pages has doubled from more than 700 pages to 1400 pages, doubling.

Cui Hongbo, CEO, a Shanghai brand management consultant, told reporters that "the strategy for expansion of MUJI products is not radical. They have their own adherence".

MUJI's two quarterly report in 2016 showed that Muji has 7000 employees in mainland China.

In the employee guidance manual, every employee can find solutions for basic work, including preparation before the shop, hospitality, logistics, distribution, and merchandise management.

In 2010, Zhang Feng, a job with Muji, was promoted to regional manager in July this year. He went to Japan to study, go to Muji Japanese shop and work together with the Japanese store manager, which made him feel deeply.

"The store manager is the soul of a shop. The actions of the store manager directly affect the actions of the staff. The manager must set an example and have a sense of responsibility, otherwise he can not ask the staff."

Overseas employees are regularly summoned to Japan for first-line shop training. Muji will be held once or twice a year.

"In Muji, the first line on the scene is most important."

Yamamoto Naomiyuki said frankly, customer thinking helps Muji to do better.

In 2003, Muji has launched a development plan called "observation" in Japan.

The development team visits consumers directly, observing their daily lives, taking photos of every corner of the room, and even each product. The photos are then submitted for discussion and analysis, so as to tap potential consumer demand.

After taking office, Kimi Masaki, the current director of Muji, rebuilt the Muji Life Research Institute and the Development Department of commodity category.

The former is similar to an informal research department, which is responsible for linking goods development with customers completely, communicating with customers through physical shops and networks. The latter is composed of Muji interior designers who actively seek customers' needs and regularly update product designs.

"The three link supports the development of Muji, the first is commodity, the second is the environment (including shop service, management), and the third is interaction with consumers."

Summing up the management system of Muji, Yamamoto Naomiyuki pointed to the key point. "The three links are all human beings. Only by ensuring a reasonable system and system can employees realize it."

Liu Changqiao was once a member of the first batch of Chinese market reserve talents in UNIQLO in 2000. He concluded that there were two reasons for the success of international brands such as Muji and UNIQLO to successfully stabilize the Chinese market: first, to fully nurture local talents and to conduct business layout in the way of thinking in the local market; two, enterprises have sufficient strength and foresight to mobilize enough financial resources to cope with changes in overseas markets before entering the overseas market.

In Liu Changqiao's words, "the pockets must be deep enough."

From multiplication to simplicity

In view of the current Chinese consumption style, Yamamoto Naomiyuki's view is simple and direct. "China today is very much like Japan when Muji is born, and its products are full of beautiful things, full of people's lives, and many places are over consuming."

MUJI's brand philosophy believes that life should be subtractive.

Its product development has always adhered to 3 principles: raw material selection, process verification and packaging simplicity.

It is difficult to find packaged products in Muji shops.

Make-up water is pparent bottle packaging, socks have no plastic coat, clothes are the simplest style, sofa, tables and chairs are always put together, without the gorgeous color of eyeballs, and no people left to stop the strange shape, all simple, return to the PU.

Its design seeks to give full play to the maximum value of things, rather than giving them additional functions.

But Muji design is not just simple.

For example, the feet of the socks are 90 degrees perpendicular to their heels, which are more in line with human mechanics, while the sock between the feet and heels of the socks is 120 degrees. Some people do not like to wear high necked sweaters in winter, because the neck is tied up, and the Muji has designed a neck neck part of cotton, and the body part is a high necked sweater of wool.

Tanaka once wrote a slogan for Muji: "simplicity does not mean inferiority".

There are subtle intellect and sensibility in simplicity, which is rather proud of the world.

Kimi Masaki said such an interesting story.

Many years ago, a well sold box product was plagiarized by a Japanese company, and Muji was sent to court.

In the lawsuit, the company elaborated the design idea and the production process one by one. After hearing the judge, the judge thought that the design idea was very natural and had no special features, so the defendant did not constitute infringement.

Kimi Masaki was delighted when he learned that he had lost the lawsuit. He made a drink with his colleagues that night to celebrate Muji's most natural return.

The imitation Muji company went bankrupt seven years later.

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"Pure broken imitation of a brand may result in a flash in the pan.

Without a strong brand concept, the business model will not go too far.

Yamamoto Naomiyuki told reporters that if we want to make a language definition for Muji's brand philosophy, "we believe that beauty exists in simplicity."

However, critics also pointed out that Muji prices in China are far from simple.

In the early days, Muji slogan was "reasonable low price". The founder of Diqing two said, "the quality is not lower than the national brand of the shopping mall, but the price is lower than the national brand 30%."

But when entering the Chinese market, brand pricing is very "light and extravagant".

Wang Zhiquan, founder of CEO, who is home to textile home furnishings, has gone to Japan to study the brand of various household products. According to his observation, Muji is located in the middle and low end in Japan, and college students are one of its main consumption groups, but it has become a high-end brand in China.

"MUJI products, imported from Japan, are subject to tariffs and are priced at a high price. At first, the number of stores in China is small and the cost is not reduced."

Cui Hongbo explained that the price of MUJI products from Japan to China increased by at least 20%.

In recent years, Muji has been conscious of lowering prices in China.

Since 2014, the company has lowered the price of goods 5 times.

In order to achieve the purpose of price reduction, Muji continues to distribute goods to mainland producers directly to the Muji shops, and expand the supply chain in Southeast Asian countries with lower labor costs.

"With the increase in the number of shops, Muji prices will continue to decline, return to the public brand, this is the trend."

Cui Hongbo said.

36 years ago, maverick did not regard everyone as a target customer group.

At that time, senior conservative estimates estimated that about 1 of every 10 people would agree with their brand philosophy, and the company's business model started around the 1/10 to develop diversified products for them.

In the past 36 years, this business model has not changed fundamentally.

To explain to reporters, Yamamoto Naomiyuki painted a circle in the air with his fingers. In the middle, she counted several points. "The core of the circle is Muji, bookstores, coffee shops, campsites, MUJI House, MUJI Hotel, baby beds, housing space pformation and other businesses. All these are new businesses built around the center of Muji."

Easier said than done.

With the launch of most new businesses, Muji has been prepared for a long time in the Japanese market, and some projects have even been exploring low-key for more than 10 years.

For example, Muji camping site project has been experimented for more than 10 years, but it did not start until last year.

"Many people ask," why did Muji stick to it for so many years? "Yamamoto Naomiyuki told reporters that he insisted on bringing" the good life we want to reflect to others ".

At present, Muji has three "MUJI Caf & Meal" in China, mainly selling coffee, Western food and bread. The first one is set up in Chengdu, Sichuan, and the remaining two are in Shanghai, including the largest flagship store in mainland China, Shanghai Huaihailu Road flagship store.

The flagship store has joined the mainland's first MUJI Books (bookstore), MUJI to GO (travel supplies), men's and women's wear, children's wear, maternity dress, MUJI Yourself (personalized living space) and ID E (home brand).

Previously, Muji China tried to put its own home products in an apartment and rent it to consumers, and eventually failed, but its furniture matching consultants (IA) business is getting better.

It is reported that IA service was formally introduced into China in 2014. As of the end of September 2016, 13 stores in mainland China launched IA services.

Consumers can make telephone reservations or go directly to the store to ask IA about the various problems of storage and home furnishing. From furniture placement, selection methods to the overall matching of the house, IA will provide a customized home life design for every customer.

Yamamoto Naomiyuki revealed that after the establishment of IA business, sales of MUJI products and household products increased. He said he was willing to bring MUJI House and other housing pformation business to Chinese consumers. In addition, Muji has been trying to pform hotels and old buildings in China.

From the beginning of 40 commodities to more than 7000 commodities, Muji is trying to expand its business and create a way of life.

The financial effect of whole category expansion is not obvious.

An interesting contrast is that in the 2015 fiscal year, the sales of the Muji scheme were 307 billion 500 million yen, or 20 billion yuan, while the Japanese fast selling group (UNIQLO parent company), which focused on clothing, had a total annual revenue of 1 trillion and 780 billion yen, which was 5.8 times that of the company.

According to Cui Hongbo's understanding, Muji is a small brand with its own unique philosophy, serving only those who like them.

For the Chinese market, Yamamoto Naomiyuki has a clear plan. In the next three years, the proportion of China's consumer, retail and service industries will continue to increase. As a result of the second child policy, he is ready to increase the proportion of children's clothing and maternity dress.

He believes that Chinese consumers will re-examine their traditional culture, and the domestic market will gradually shift from consumerism to "things" doctrine, that is, more respect for the role of the commodity itself, which is an opportunity for Muji.

In Wang Zhiquan's view, due to the few inspiring designs for a long time, "the evaluation of recent commodities in the design community is not high", and the rise of local brands, he predicted that "mythical" MUJI products in China could not maintain the good momentum in the past.

Whether or not business will be surpassed, the influence of Muji brand philosophy in Chinese business can still be underestimated: millet founder Lei Jun proposes to be a "Muji" in science and technology. Luo Yonghao, founder of hammer cell phone, recommended "Shen Ze straight man" in his press conference. This great master in industrial design is also the soul designer of Muji.

There is a "Found Muji" project inside Muji, that is, to draw traditional design elements locally, and process it with Muji's thinking.

In the series of Found Muji Ming, the brand looks for inspiration from the representative furniture of China's Ming and Qing Dynasties, such as Tai Fu ting and so on, presenting an aesthetic of the times.

This is an interesting case. In Chinese tradition, there is no lack of philosophy of "Muji and good quality", but it is forgotten.

(requested by the petitioner, Zhang Feng is a pseudonym)