On October 30th, recently, Beijing Cottonfield Textile Co., Ltd. sued Japan’s Muji Parent Company Co., Ltd. and its Chinese subsidiary MUJI (Shanghai) Commercial Co., Ltd. for infringement of its trademark rights and won the case. This means that the MUJI store can only be called MUJI or MUJI in China.
As of now, the China Headquarters of the Good Products Program has not responded to the results of the lawsuit and the name change.
At the same time that the trademark case was lost, MUJI also suffered the first decline in performance in China. At the beginning of this month, MUJI’s parent company’s good product plan released its own Q2 financial report for 2018. According to the data, MUJI did not produce a good transcript in the Chinese market: comparable sales after the implementation of price reduction For the first time year-on-year decline of 2.2%, MUJI’s revenue in the first half of the Chinese market fell 0.2%.
According to the “Electronic Business Daily”, the growth of MUJI in the Chinese market has slowed since 2017. According to public information, from Q2 to 2018 in 2017, its operating income in the Chinese market increased by 22.6%, 21.2%, 18.3%, 14.8% and 10.4% respectively. It is worth noting that MUJI has taken up to 9 price cuts, and the average price cut is 20%, which has not alleviated the slowdown of MUJI in China.
In fact, the price of MUJI has not been dominant. In Japan, MUJI is a popular brand, and when it comes to China, it has taken the middle and high-end route. For example, a trolley case of MUJI, domestic price is 1,528 yuan, online shopping is about 1,300 yuan, and this identical trolley case is only about 900 yuan in Japan, which is 40% cheaper than China’s.
Although MUJI uses tariffs, costs, etc. to explain price differences, consumers are still questioning such differential pricing. According to previous reports from other media, Netease strictly claimed that the product came from the factory of MUJI foundry, but the price was only half of that of MUJI. In addition, Taobao‘s selection and Beijing-Tokyo, etc. also use the platform advantage of E-Commerce to further compete for market share.
The reason why MUJI will be robbed of market share by these latecomers is that it has a great relationship with its slow expansion in the Chinese market. In 2005, the first store of MUJI in Japan was stationed in Shanghai. In the past 13 years, only 235 stores have been opened in China. The financial report shows that MUJI only added 6 stores in the first half of China. Previously, the MUJI official had spoken, and attached great importance to the Chinese market, and was working hard to expand. According to public data, the number of famous products in the country has reached more than 2,000, close to 10 times the number of MUJI stores.
But MUJI does not easily give up the Chinese market. On the 15th of this month, Japanese Prime Minister Shinzo Abe announced that Japan plans to raise the consumption tax rate to 10%. Due to the news, the heavyweights such as Fast Retailing and Softbank recorded a decline of more than half. According to media reports, the increase in the consumption tax rate will threaten the impact on personal consumption-oriented retail stores. In response to this policy adjustment, Japanese retailers have begun to target overseas markets, especially the huge Chinese market in the consumer market.
Matsuzaki, president of the MUJI parent company’s good product plan, said earlier that MUJI will continue to invest in China because of the aging population in the Japanese market and the saturation of stores. Market. According to the financial report, there are 264 Chinese stores at the end of the fiscal year, and 35 new ones are planned for the second half of the year.
At present, the competition in the Chinese market is fierce. The number of MUJI stores and customer traffic are not as good as the local famous products. Coupled with the Chinese E-Commerce that cannot be underestimated, just the price cuts and store expansion are not enough to save MUJI. The decline in China’s performance. In order to achieve better development in the Chinese market, MUJI also needs to develop a better and more comprehensive change strategy.