MUJI has begun a new round of price adjustments, with some products falling by as much as 1,000 yuan. The adjusted products involve sofas, daily necessities, cleaning supplies, kitchen utensils, etc. On April 12, regarding the reasons for the price reduction of goods, MUJI China Headquarters stated, “In order to make it easier for people to purchase products that are frequently used in life, MUJI has been constantly re-examining the prices, and strives to restore the value of the products at a fair price.”
The reporter saw on the official website of MUJI that the new prices came into effect on April 9th. The price of most commodities has fallen by about 30%, while the price of some commodities has fallen by 1,000 yuan. The initial market price of a 3-seater sofa is 3980 yuan, and the current price is 2980 yuan.
In addition, products such as cotton pads and cotton swabs need to be selected at least 2 items to enjoy the new price. Among them, the price of cosmetic cotton 180 pieces of 60*50mm is lowered from 22 yuan per piece to 15 yuan per piece, and the price of cotton swabs is lowered from 16 yuan to 10 yuan per piece. In response to this, MUJI China headquarters said: “This is based on the purchase and use habits of customers.”
The reporter saw on the official website of MUJI UK that the same product as the above-mentioned 180 pieces of 60*50mm cotton is now priced at 3.5 pounds, and the price has not been adjusted yet. Regarding whether the price reduction is only for the Chinese market, MUJI China Headquarters stated that “this re-examination of prices is for Chinese customers.”
“In addition to the strong sales performance in the Japanese domestic market, China, as an important overseas market for MUJI, has played a driving role in improving its overall performance,” said Xiao Xu, a lecturer at the School of Business Administration at Capital University of Economics and Business.
He further pointed out that China’s rapid economic growth has brought huge profits to MUJI. In order to speed up its expansion and attract more consumers, MUJI, while strengthening China’s domestic production control, began to focus on different categories as early as the fall of 2014. Commodity price cuts were implemented. “MUJI has achieved price reductions by inspecting processes, simplifying packaging, and improving logistics, as well as eliminating the logistics costs of transferring Chinese-made products to Japan and back to China. The company hopes that price reductions can expand the customer base.”
“However, from the actual effect, it is difficult to retain Chinese consumers only by continuously reducing prices and accelerating store openings.” Xiao Xu continued to say that rapid expansion has not significantly improved MUJI’s sales, but will affect the quality of products. It is difficult to satisfy all consumer preferences only by lowering prices. Choosing “technical industry specialization” and cultivating high value-added products such as product quality and design is also a good development direction.
The reporter saw on social platforms that Chinese consumers had mixed opinions on MUJI’s price cut. “The quality of MUJI clothes is much better than other fast-selling brands, and I like this simple style.” However, some consumers have expressed concerns about the price reduction. “The price reduction may be to consolidate consumers, but the quality and workmanship should also be improved. Can a simple style stand up to it?” In addition, some consumers said: “MUJI’s products have always been more expensive, and this price reduction is an inevitable trend.”
In fact, MUJI has continued to implement the “new pricing” price reduction strategy since 2014. Up to now, the number of price adjustments in the Chinese market has exceeded 10 times.
It is reported that in 2005, MUJI opened its first store in Shanghai and officially entered China. Since 2012, MUJI has expanded in China at a rate of 30-50 stores per year. As of February 28, 2019, MUJI had a total of 420 stores in Japan and 497 stores overseas, with mainland China having the largest number of stores, reaching 256, accounting for more than half of overseas stores. As of the end of February 2021, MUJI has 288 stores in China.
In April 2019, MUJI parent company Ryohin Keikaku Co. announced its full-year financial report as of February 28, 2019. Operating profit fell for the first time after eight consecutive years of growth. Sales in the Chinese market increased by 11.6% year-on-year to 75.09 billion yen (About 4.8 billion yuan), same-store sales fell 2.1% year-on-year.
According to Ryohin Keikaku’s 2019 annual financial report, Ryohin Keikaku’s annual sales were approximately 28.6 billion yuan, a year-on-year increase of 7.1%; net profit was approximately 1.5 billion yuan, a year-on-year decrease of 31.3%.
However, regarding the performance of 2020, MUJI China headquarters stated that in 2020, after the resumption of store operations in China, sales performance will gradually recover. On the other hand, the sales of online shopping malls maintained good momentum. In addition, in the past year, sales of household goods developed by the Chinese localized product team have also increased.
Source: Beijing Commercial Daily