Muji winter
Since entering China in 2008, Muji has been expanding, with more than 200 brick-and-mortar stores as of 2017, including two global flagship stores in Shanghai and Chengdu. However, with the development of the commodity economy, Muji faces a transformation.
Internal cause:
For one thing, Muji has been criticized for its price. Since entering China, Muji has been given the label of “superior quality”. The daily necessities sold in the store are not cheap, a cotton bedspread set costs 500 yuan, and a mug is as high as 80 yuan. Of course, the price feels good to some consumers, who see Muji’s products as a “redesign” of life, buying more than just a mug or a bedspread, but “quality” and “life.”
However, Muji, which has long touted quality and is known for its low cost performance, sold itself as cheap before entering China. Yes, Muji was launched in Japan in 1980 with the slogan “cheap for a reason” and prospered by offering Japanese consumers good quality products at low prices.
It is such a relatively down-to-earth brand in Japan that began to sell “faith” after entering China. As small as dozens or hundreds of storage boxes, as large as 1,000 benches, these products are priced beyond our understanding of the value of everyday things. In particular, Muji’s prices in China look steep compared with those in Japan. The price difference between the two has raised questions about Muji, most notably its crude “price in yen divided by ten equals yuan” approach.
The other is that muji is under siege. With the development of commodity economy, a trend of “miscellaneous shopping” has arisen in China. The “grocery store” model is rising, and various stores with similar styles have followed. Among them, netease Yanxuan, Xiaomi Youpin, Miniso and other platforms are considered to be muji’s strong rivals.
When netease Yan Xuan launched, it claimed that the products came from the OEM factories for Muji, so the quality can be comparable to Muji, but the price is only half of Muji. Such inexpensive products have attracted a large number of consumers’ attention. Xiaomi Youpin is xiaomi’s second brick-and-mortar store, named “Youpin Life”. Similar to muji’s “faith” in China, Xiaomi Youpin advocates “quality of life” and its stores are decorated in a similar minimalist style with more user-friendly prices. Both the LOGO and the decoration style of MTRP are based on Japanese tone. Although the product quality is not high, it has developed rapidly in a short period of time due to its low price and variety.
The continuous emergence of “imitators” with their unique advantages successfully attracted the attention of a large number of consumers, diverting the audience of Muji, muji market development space has been severely squeezed. As these “imitators” continue to appear and develop, Muji faces increasing competitive pressure.
External cause: Since the “new retail” was proposed, it has swept the whole business economic circle. The integration of online and offline has become a trend of The Times, and most physical players have switched to new retail. This mainly depends on the advanced technology brought by the new retail industry to solve the pain points existing in the traditional retail industry, such as complicated membership registration procedures, payment trouble, some relevant consumer data is difficult to obtain, etc. The solution of these problems can bring consumers better consumption experience, easy to attract more consumers. Under such circumstances, Muji can only be forced into the transformation, or it will definitely weaken its competitiveness, be overtaken or even abandoned by The Times.
Worse, the road to transformation is difficult to achieve
With the improvement of living standards, the commodity economy has developed greatly. In order to get out of the predicament, Muji has embarked on the road of transformation in accordance with the development trend of The Times. However, the road of new retail seems not so easy as imagined.
For one thing, the bulk of the new retail market has been carved up by the giants, and it remains to be seen whether Muji, a latecomer, can gain a foothold in the new retail market. In the past new retail wars, the market has been largely captured by Internet giants such as Alibaba and Tencent, except for the small players who are still active in some segments or some smaller markets, most of the small players have been included by the two players. Muji, a late entrant, has struggled to gain a foothold in the new retail market.
Second, Muji has yet to catch up with the pace of new retail development and complete transformation. The reason why Muji has not yet achieved a complete transformation is that it has not yet touched the core of the new retail, the application of the new retail is superficial. Undeniably, muji’s upgrade of the payment system after the new retail transformation simplifies payment and membership registration processes to a certain extent, improves work efficiency and brings better user experience to consumers. However, Muji has not really realized the integration of online and offline, the enterprise has not been digitized, and there are still deficiencies in the research and application of big data, artificial intelligence and other technologies.
Three years ago, After the transformation of the new retail muji began to lower prices, but problems occurred frequently. Problem 1: Many price cuts behind the frequent scandals. Since Muji implemented its price-cutting strategy, it has been repeatedly exposed that its products are mislabeled, of poor quality and can’t be repaired. Previously, Muji had shown on the National Enterprise Credit Information Disclosure System that hexagonal colored pen stationery and water-based pens sold in its stores do not have labels on the production date. In addition, data from the National Enterprise Credit Information System showed that Muji stores were punished four times in 2107 for product quality problems.
Problem two: conflict with their own positioning. Since Muji entered China, consumers have positioned it as “premium”, which is inextricably linked with its high price. But now Muji began to personally cut off this connection, with the development of time, muji’s “advanced halo” will be more likely to dissipate, especially the emergence of scandal waves accelerated the halo dissipation time.
Multiple price cuts didn’t do muji well, with overseas same-store sales up 4 percent in 2017, compared with 1.8 percent growth in China.
If winter comes, can Muji’s spring be far behind
In the face of this predicament, how should Muji’s new retail industry develop in the future? The answer lies in conforming to the trend of The Times, keeping up with the pace of the development of new retail, and making strategic planning for the transformation of new retail.
First of all, in terms of brand positioning, the new retail should be a concept upgrade for the brand. One of Muji’s strengths is “telling stories”. Since its emergence, muji has been promoting its ideas. No matter in products or packaging, it emphasizes simplicity and nature, hoping to make consumers feel a simple and natural lifestyle through this way.
The reason why the early Muji products could make consumers pay is related to the life concept at that time. The simple and natural life style advocated by muji products just fit the life concept of consumers at that time. Based on such advantages, Muji should spend more time and energy on how to upgrade its concept in the future, such as using big data, cloud computing and other technologies to find out the life concept of modern people, combine the brand concept with modernity, and change or upgrade its product positioning. With the continuous development of The Times, people’s consumption demand and lifestyle are gradually changing. If muji’s concept is not upgraded to meet the needs of the public, it will inevitably be left behind by The Times.
Secondly, in the application of technology, new retail technology should be applied to production and operation, integrating online and offline to achieve real transformation. Muji has always focused on offline operations, with better development of offline stores. On the basis of consolidating this advantage, how to make up the short board on the line has become one of the key points of transformation. How will mobile applications, big data and other technologies be implemented? How to apply cloud computing and artificial intelligence to production and sales? How to develop logistics, warehousing and so on? These problems are inevitable in the process of online and offline integration, and how to solve them is the top priority for Muji to achieve new development in the future.
Finally, compared with other brands, Muji has great advantages in scene experience. How to highlight and upgrade its advantages and build its own advantage barrier is the focus of muji’s future development. Different from the single scene in the past, the demand for scene in the new retail era is getting higher and higher. Building more scenarios and improving the consumer experience will help Muji achieve its new retail transformation and attract more consumers.
In general, the prosperous commodity economy makes Muji fall into a predicament. In order to get out of the predicament, it is a right decision for Muji to choose the strategy of transforming new retail in accordance with the development trend of The Times, which is a good opportunity to catch up with the pace of The Times. However, muji still has many shortcomings in the process of new retail transformation. Without the guidance of correct strategy, it is not easy for Muji to realize the transformation. If real transformation can be achieved in the future, it is possible to get out of the predicament, otherwise, if the transformation can not be successful, then Muji will get deeper and deeper in the mire.
Article/Liu Kuang public account, ID: Liukuang110