Frequent Quality Of MUJI Products In The Future

In Shanghai, starting from gate 4 of Shaanxi South Road subway station, it takes less than 5 minutes to walk eastward along Huaihai middle road. On a glitzy high-rise building, the "MUJI" four letters will come into view.

This is the largest flagship store in Asia, which is the largest home chain brand in Japan. It was officially opened in December 12, 2015 with a business area of 3438 square meters, involving nearly 3000 SKU (StockKeeping Unit, the smallest stock unit).

Huaihailu Road, Shanghai, is a world famous brand. It is a miniature of Muji's flourishing development in China.

However, the mass retailer targeting the middle-income group and the Japanese style minimalist lifestyle is encountering a crisis of confidence in the Chinese market. Following the early detection of gene carcinogens in hazelnut oatmeal biscuits, its home products are again inspected by the regulatory authorities to test the "black list".

Since 2005, Muji has officially entered the Chinese market. But at the moment, with the frequent occurrence of quality problems, Muji's performance in China has also been affected. In contrast, the local mass retailers, such as top quality products, Nome and others, have strong momentum of development.

On the battlefield of "wolves", will MUJI products return to the summit in the future?

Furniture products "blacklist"

Recently, Muji has been very hot, which stems from a quality report. The quality inspection results of the furniture products sold in the circulation sector in Beijing announced by the market supervision and Administration Bureau of Beijing recently revealed that 11 furniture products were unqualified, involving Muji, IKEA (IKEA) and other brands, of which 6 were Muji.

For a time, Muji stood on the cusp.

According to the unqualified list obtained by the international finance daily, in the 6 unqualified furniture products of Muji, 5 of the main problems involved are the nominal material and the actual material. For example, the main material is beech solid wood coat hanger, the actual material is water Fagus; the main material is walnut wood dining hall sofa chair, the actual material is plywood; nominal material is walnut solid wood chair, the actual material is black walnut. In addition, the main problem of 1 furniture is the "wearability" failure.

In response to the above questions, Muji China headquarters replied to the international finance Daily reporter: "this is mainly the identification of product names. We have completed the correction at the first time. For example, walnut solid wood chairs in object commodities have been corrected to black walnut solid chairs according to the Chinese GB standard. Walnuts in the market now refer to black walnuts, both of which are of the same material quality.

At the same time, Muji China headquarters also provided information to reporters about the name of China's main timber circulation commodity WB/T1038-2008. But for several other products, Muji China has not made much explanation.

"At present, we are conducting a comprehensive inspection and correction of the name of wood for furniture, clearly specifying the material used in all parts of furniture, ensuring that its contents are consistent with the certificate of commodity and the instructions for the use of products. At the same time, furniture products will be increased to detect efforts to avoid similar situations again. " MUJI China is responding to reporters.

However, on the afternoon of July 24th, the reporter visited the 755 Muir shop in Shanghai, Huaihai, found that there were 3 thin clothes hangers on the shelves of the shop, priced at 75 yuan, priced at 75 yuan.

Frequent "quality gate"

In fact, in recent years, Muji has been repeatedly found out of quality problems from clothing, food to daily necessities. Now, the product's unqualified episode has again cast a shadow over the brand.

3 months ago, the State Administration of market supervision and administration announced that Muji (Shanghai) Commercial Co., Ltd. submitted a recall plan to the bureau to recall some imported MUJI (Muji) brand painting notebook (M) and stainless steel ruler.

Coincidentally, in February 2019, Muji labeled "natural water" drinking water was found to contain carcinogenic substances, bromate content exceeded the standard 2-4 times, and finally had to recall a total of 590 thousand bottles from the world.

In January 15th, the Hongkong Consumer Council released a report that it purchased 58 biscuits from Hongkong from August 2018 to October and found genotoxic and carcinogenic epoxide propanol and acrylamide. Among them, Muji was a hazelnut oatmeal from Malaysia. The content of epoxy propanol and acrylamide was the highest in the pre packaged samples that were not pre packaged or exempt from nutritional labels.

The time was put back to September 2018. At that time, the commodity branch of the Haidian branch of Beijing commerce and Industry Bureau launched the commodity inspection work for MUJI products (BA Gou Hualian shop), but was strongly rejected by the store manager. In the end, the local industry and Commerce Bureau insisted on getting the sampling samples, and informed the official website of the quality inspection results of Muji clothing, a total of 10 batches of clothes failed.

"The main reason for the frequent problem of Muji quality is that it has no sound quality supervision system in the Chinese market, and the lack of strong regulatory measures for a large number of products manufactured by third party factories, leading to the inflow of quality products into the market." Zhu Yue, director of the consulting and executive director, said in an interview with the international finance daily.

According to Zhu Yue, at present, the vast majority of consumer goods enterprises in the market adopt the OEM mode (commonly known as "foundry production"), so as to achieve the purpose of controlling costs. Under the increasingly stringent product quality surveillance system in China, more and more undetected products will be exposed.

There is no doubt that, as a brand that brings exquisite aesthetics and Japanese lifestyle into China, with the frequent occurrence of various "quality gates", Muji has been seen as a "middle class" brand image in the Chinese market and is collapsing.

For what measures will be taken to enhance consumer trust, Muji China told reporters: "we are concerned that Chinese consumers attach more importance to quality, which is the direction of our efforts. Next, there will be some new trends in Muji's plan in the Chinese market.

According to its introduction, in Japan, Muji shops have their own characteristics. For example, there are supermarkets in the North flower shop in Osaka. The first floor of the flagship store in Ginza has local products such as fruits and vegetables, convenience products and so on. But the flagship stores currently open in China are more similar, and then there will be some distinctive strategic shops, and there will be some differences in the scope of commodities. According to the plan, by the end of 2023, the proportion of local products in the Chinese market will be increased to 50% of the total goods in the grocery department.

But reporters noted that in future plans, Muji did not mention how to strictly control the quality of products.

Management cooling

According to official website, in 1980, Muji was born in Japan in 1980, pushing up all kinds of high-quality goods such as clothing, groceries, food and so on. "Muji" brand names refer to "good products without names".

In 2005, Muji set up China's first store in Shanghai and opened the door to enter the Chinese market.

According to the previously announced results of the Muji company's good quality plan, as of February 28, 2019, Muji had 420 stores in Japan and 497 stores overseas, with the largest number in mainland China, accounting for more than 256, accounting for more than half of overseas stores.

However, in the huge Chinese market, Muji, which has gone through 14 years, has shown some "weakness" since last year.

Last October, the good plan announced its second quarter earnings in fiscal 2019. Data show that in the two quarter of 2019 fiscal year ending August 31, 2018, the sales of Muji China's same store declined for the first time, down 2.2% from the same period last year. Not long ago, the first quarter of fiscal year 2020 (March 2019 to May 2019) reported that the comparable sales decline in the Chinese market has risen to 4.9% during the reporting period.

In response to the main factors affecting the slow growth of China's market performance in recent years, Muji has explained that "mainly because of inventory reasons" in response to the international finance Daily reporter. "On the one hand, we have changed the circulation management system inside and outside the warehouse. On the other hand, there is little makeup pool in the basic Moisturizing Series, but now the problem has been solved."

But the industry does not think so. Zhu Yue pointed out that Muji's performance in recent years has been frustrated for many reasons, including the increasingly fierce market competition, the diversion of consumers, the dislocation of brand positioning and the relative shortage of local supply chain capabilities.

Zhu Yue said that unlike its popular brand positioning in Japan, Muji has become a high-end lifestyle brand that represents consumption promotion in China, and is a standard for commercial real estate in high-end shopping centers. With the gradual transparency of market information and commodity prices, its pricing strategy, which is more than two times higher than that of the Japanese market, has been criticized by Chinese consumers. In addition, the supply of MUJI products in the Chinese market still depends to a large extent on the Japanese market. Even OEM Chinese foundry products need to be sent back to Japan for re sorting and then exported to China. Although Muji has already built Asian logistics centers in Beijing and Shanghai, the two logistics warehouses can only supply about 1000 kinds of goods, and a large number of products still need support from Japan. The longer supply chain leads to slower printing cycle and higher pressure on logistics and warehousing costs.

In order to retain more Chinese consumers, Muji has already made several price cuts in the Chinese market. In September 2018, Muji published a notice on the official website that it had implemented ninth new pricing since August 24th and lowered the price of some products in the Chinese market, averaging 20%. The international finance daily noted that this year, it has also released product price notice on the official WeChat public number many times.

Chen Wei, a marketing expert, told reporters earlier that the price reduction would help Muji to reach a larger audience in China and make Muji in China more intimate. More importantly, Muji hopes to compete with its rivals through price cuts.

However, some retailers have told reporters that if the price of Muji will be reduced to a certain level, it will leave the impression of a cheap brand in the eyes of Chinese consumers, which is not consistent with its positioning in the Chinese market. In addition, Muji has been exposed to product quality and food safety problems in recent years, and its brand image has been greatly reduced in Chinese consumers.

[industry observation] wolves around the mass retail business

In the Chinese market, Muji is encountering more and more competitors with similar styles.

Earlier, insiders told the "International Financial Daily" that in Japan, Muji's rivals might be Amazon, while in China, Muji would not only face offline shop rivals such as famous and excellent products, but also a series of online business rivals, such as NetEase's strict election, rice products, Beijing Tokyo construction, Taobao's heart election and so on.

For example, the early positioning is the "Japanese fashion leisure department store" later changed to "Japan fast fashion design brand", the location is almost the same as Muji. In the past 3 years since the establishment of a price winning brand name product, it has opened more than 1800 stores worldwide. Another strong opponent, NetEase, was chosen as a selling point when he first went online. He used the same manufacturer as Muji, which was only half the price of Muji.

People in the industry pointed out that many imitated life styles of MUJI products have been expanding rapidly in recent years.

Marketing expert Lu Shengzhen told the "international finance daily" that Muji has encountered more and more similar brands in China, and the competition has intensified. The imitation and competition of the similar shops of famous brand, quality products, deer island, Century Lianhua whale selection shop and so on have mixed up the flow of MUJI products and customer loyalty. This is also an important reason for its performance to "cool down".

"Domestic enterprises are running too fast, and contrasting with Muji is slow. Chinese companies are too strong in imitation and breakthroughs. Muji has looked a bit of a stumble in recent years. As for the Muji market in China, Wang Guoping, a member of the senior advisor of the joint venture network, pointed out. He believes that any format has a life cycle, unless it is given new connotation to lead the market again.

So, in the fierce external competition environment, where will the future of Muji China market go?

"In fact, MUJI has not studied" rival products "for a long time. It is just observing the life of Chinese customers with diligently, and applying this observation to commodity development and shop strategy. A few days ago, in reply to reporters' questions about external competition, MUJI products pointed out this. Obviously, Muji is still full of confidence.

Lu Shengzhen said that now, Muji has been in a field where prices are almost transparent and no space is available, and similar products are very rich. "At this time, in the development of shop products, every brand should launch several main products every month to stimulate the brand effect of the whole store."

Zhu Yue also pointed out that Muji can explore joint cross-border, further optimize the offline shopping experience and increase geographic coverage. "At present, the location of Muji based Chinese stores is mainly concentrated in the high-end shopping centers, so the average exposure rate and traffic volume of their stores are relatively low on weekdays. In the future, I think Muji can launch small scale selected stores for the development and characteristics of the region, such as increasing the coverage of Mujito Go stores in the airport, so as to enhance the exposure of the brand stores and increase the efficiency of the flat.