Why is people's impression of MUJI only "expensive"?

Visiting MUJI, netizens have a set of "standard procedures".

Try sitting on the lazy sofa first, then go to the daily necessities area, pick up the 48 yuan palm mirror or 300 yuan card bag to let friends guess the price, go to the snack discount area to wander for a while, and finally walk out of the door of MUJI empty-handed.

 "Guess how much this is" or the phrase that young people say most when they shop MUJI.

The growing amount of ridicule about MUJI's price and price-performance ratio has almost obscured its once "middle-class aesthetic" label.

And this also gives rise to the soul asking, why is there an amplified "expensive" left in the impression of MUJI?

The title of "middle-class aesthetics",

Broken?

"MUJI's ideal is that once the products it produces are touched by consumers, they can emit a new sense of life." Designer Hara Kenya's words, MUJI did it that year.

Since entering the Chinese mainland market in 2008, "MUJI style" was once synonymous with a sense of luxury.

At that time, the trendy people were proud of the storage box with plain striped T-shirts and straight lines. The middle class has long moved the beige fabric sofa and white oak dining table into their home.

Simplicity, outstanding design, maximum use... As a representative of Japanese aesthetics, MUJI was so beautiful that even the release of the "Horizon Poster" won the design award.

It seems that there are only monotonous colors and almost no design design, which is most worthy of the bustling, low-key luxury and spiritually rich life home.

At that time, MUJI's brand premium was recognized by consumers.

Source: Interesting report

When did you start to feel that MUJI was "expensive"?

It may be when the Internet is further developed and more and more consumers find that there is a huge price difference between MUJI in Japan and MUJI in China.

MUJI was born in Japan with the positioning of affordable daily necessities for the masses. Born in the context of Japan's "anti-consumerism" in the 80s, MUJI advocates abandoning premiums, pursuing pragmatism, and strengthening design and quality.

According to statistics, in China, MUJI's Chinese products are priced 25%-30% more expensive than in Japan.

The question of "why is it so expensive" gradually arises.

"The price difference between brands in different countries and regions is a normal business practice." Zhan Junhao, founder of Fujian Huace Positioning Consulting and public relations partner of Fuzhou Gongsun Ce, said that in addition to MUJI, there are many foreign brands in China that sell higher prices than the country of origin during the same period. Today, some of China's best brands will also sell more in some overseas markets than in the domestic market.

"There are many factors that lead to price differences, such as tariffs, logistics costs, labor costs, material costs, marketing costs, or the brand's different popularity in the same category in a country or region." In his view, the reasonableness of the pricing strategy depends on whether the company's starting point is purely commercial behavior based on rising costs, or whether other factors deliberately treat Chinese consumers differently.

According to the data, MUJI did not have a storage center in China in that year, and the products would be shipped to Japan after production in China, and then shipped back to China according to the supply plan. Transportation costs plus VAT and other costs have increased the selling price of MUJI in China.

Even if there are reasonable reasons, there is no doubt that MUJI is "expensive". After the rise of e-commerce, the number of similar references has increased, and this impression has become more profound.

First, the foundries and small brands behind the scenes of various brands have been pushed to people's eyes, and everyone has gradually explored the bottom line of "cost price": the price of buying a cup at MUJI can buy a dozen "flat replacements" online with a very similar style. Second, e-commerce platforms such as Xiaomi Premium Products, NetEase Yanxuan, Beijing Tokyo Manufacturing, and Taobao Xinxuan have grown day by day to carry out consumer battles.

E-commerce is not MUJI's only rival.

Offline retail store brands such as The Green Party, Tomato Pocket, NOME, etc. quickly occupied major shopping malls in first- and second-tier cities. Fast new, crazy co-branding, high price of 9 blocks 9... While stealing teachers to learn MUJI's R&D products and layout channels, the rising stars are running harder and harder on the road of cost-effectiveness, playing a different but effective "boxing method" than MUJI.

"Nowadays, consumers' overall consumption concept is more rational, and they pay more attention to the cost performance of daily household products." Zhan Junhao said that under this group consumption trend, the price of MUJI's products is "too big and generally expensive" compared with the new e-commerce platform.

If the above reason is the ruthlessness of the wheels of the times, then MUJI's control of "quality" has also "deviation".

For example, MUJI's furniture "hangs sheep's heads to sell dog meat", and the material sampling is unqualified; Hazelnut oatmeal biscuits and bottled water cups were detected to exceed the standard of potential carcinogens; The brightness of the notebook paper is too high, and the corners of the stainless steel ruler are too sharp; In April this year, the sneakers and luggage sold by him were also found to be of substandard quality.

"Doesn't it sell cheaply, and there are frequent quality problems?" The public complained, making the "expensive" of MUJI more and more eye-catching.

price reduction and crossover,

Saved MUJI?

As a result, MUJI, known for its "frigidity", has finally ushered in the "coldness" of its former believers after entering the Chinese market for many years.

Lip service banter turned into votes for money. Since 2016, MUJI's growth rate has slowed across East Asia, and in 2018 it showed negative growth.

According to the financial report of MUJI's parent company, Good Product, as of the first half of fiscal 2022, operating income increased by 7.1%, but operating profit fell by 19.4% and net profit fell by 27.5%. As China's largest overseas market, the stagnation of growth has directly led to the decline in MUJI's performance. In the first half of 2022, in the Chinese market, MUJI's revenue was 350 million less than expected.

According to Interface News, MUJI's parent company Liangpin plans to increase its main business income by 17.5% to 435.8 billion yen (about 21.8 billion yuan) in the three quarters from September 1, 2022 to May 31, 2023, but operating profit and "ordinary profit" fell by 8.7% and 15.5% respectively. Simply put, it is facing the problem of increasing revenue without increasing profits.

MUJI is also looking for countermeasures.

The price reduction is its obvious action. Since 2017, it has cut prices in China 11 times in 11 years. Red promotional labels such as "Discount Season", "Advent Special" and "50% OFF" appear more and more frequently in stores.

Will this salvage the anxiety that it won't sell?

"There is a tried-and-true marketing method in the business world, and once a well-known brand reduces its price, its performance will increase significantly in the short term." Zhan Junhao said that MUJI's continued price reduction in the Chinese market is on the one hand an attempt to explain the board of directors and investors to its business performance, and on the other hand, it also wants to stabilize the declining consumer group. "However, from the perspective of the brand's long-term development strategy, it is not right to reduce prices in the short term or continue to reduce prices to improve the overall operating income."

In Zhan Junhao's view, consumers not only consider product quality when buying brand products, but also bring "highlight" value to themselves because of the brand's social popularity, and MUJI's long-term price reduction is easy to be abandoned by consumers.

In the view of Zhang Yi, CEO and chief analyst of iMedia Consulting, unlimited price reduction is obviously a huge challenge for the operation of enterprises. Under the premise that profit is the lifeblood of the enterprise, price reduction is certainly not the best way.

There is also the road of lifestyle crossover, and MUJI is not going well.

It has opened a MUJI hotel in China, sold vegetables and fresh food in a farm concept store, and made Café & Meal MUJI light fast food and MUJI Bakery baking, and it has not received many extra points across borders.

MUJI Hotel. Source: Official website

MUJI believes that a brand should be deeply rooted in the hearts of the people, not limited to the product itself, and should use a more complete customer experience to promote a retail revolution. But the most impressive thing is the Italian organic lettuce at the farm's fresh shop for 11 yuan, accommodation for 1500 yuan a night, and ordinary meals.

Even so, MUJI still shows that it attaches importance to the Chinese market.

According to MUJI's FY2023 plan, the full-year profit growth target of 25% in East Asia, where the Chinese mainland is located, is higher than that of Japan and other overseas regions.

MUJI's largest flagship store in China will open in Beijing's Chaoyang Joy City in 2024, and the brand has also said that it will increase the proportion of localized products in the Chinese market to 50% of the total merchandise volume in the grocery department.

If you want to gain more recognition from consumers, what is the future of MUJI?

The mystery is probably on the puzzle side. "MUJI" and "MUJI" represent product quality and aesthetic design and their high added value, which is where MUJI was initially praised.

Many people say it's expensive, but many people think it's worth the money: a silky writing pen, a hair loop on the scalp, scissors for the left hand, and a stand for rice spoons on top of the rice cooker. These humanistic details from the consumer's point of view are often impressive.

In Zhan Junhao's view, MUJI's market perception of "rich in design" and "exquisite and unique" still exists. If you can re-examine yourself, re-communicate with consumers, and reposition, you may regain the favor of consumers.

"How to improve the intrinsic quality of products, improve the user's sense of gain, and increase the sense of value for the user, for MUJI, I am afraid that the future must be vigorously thought and explored." Zhang Yi, CEO and chief analyst of iMedia Consulting, also said. Finding new growth points in the main market may be the most important thing for MUJI in the next few years.

"Always believe that consumers need products with eternal value" has been MUJI's philosophy for many years, and this is likely to be the best way out in the future.

Professional Support:

Zhan Junhao, founder of Fujian Huace Positioning Consulting and public relations partner of Fuzhou Gongsun Ce

Author: Guo Yi

Editor: Tennessee

Editor-on-duty: Jia Shihui