Why did Muji and IKEA fall into the shrine of home?

category:Finance
 Why did Muji and IKEA fall into the shrine of home?


On July 17, 2019, the Beijing Municipal Market Supervision and Administration issued the announcement of the results of sampling inspection of furniture commodities in circulation field. It indicated that the furniture commodities sold in Beijing market had been sampled and inspected. In the list of 11 unqualified furniture items, the production enterprises were named as Imprinted Good Products (Shanghai) Commercial Co., Ltd and Bid. More than half of the unqualified products labeled MUJI Imprinted Products are unqualified, including beech hangers, low-sized dining tables, walnut solid wood chairs, living room and dining room sofa chairs, side tables and so on. The main reason for five unqualified products is the nominal material does not match the actual material. For example, a living room dining room dual-purpose sofa chair with specifications and models of primary color, 55 cm long, 78 cm wide, 77 cm high and 4550002422516 labels plywood as walnut. During the sampling inspection, two items of childrens furniture, named IKEA Sweden Limited as IKEA (China) Investment Limited and IKEA as IKEA, were unqualified.

As for the identification of commodity names, the responsible person for Muji products responded that the reason for the name difference was the literal translation of Japanese commodity names. On July 19, for the unqualified products, Muji expressed its willingness to provide refund and exchange services for customers who bought the six furniture through official micro-blog. On the same day, Yang Fan, IKEA China Public Relations Manager, told Beijing Business Daily that after confirmation, the related products of this briefing are FRITIDS Welfare Tides drawer front panel of 60 *16cm, FRITIDS Welfare Tides drawer front panel of 60 *16cm is the series of supporting drawer panels, IKEA has been suspended nationwide on March 8, 2019, and Improvement of the product has been launched, and the improved version has been in the process of final testing. Once it passes the relevant departmentstest, the improved version will start selling again.

Beijing Business Daily reporters noted that this is the third time IKEA childrens furniture has reached the quality blacklist in 2019. On January 18, 2019, the Shanghai Municipal Market Supervision and Administration issued a sample inspection of the quality of childrens furniture, in which a warning sign of childrens desks and chairs (childrens furniture) sold in IKEA Online Mall, labeled as IKEA and model specifications as 41 *43 *79 (cm) was not qualified; on April 29, 2019, Shenzhen City, China. The Bureau of Market Supervision and Administration issued a circular on the results of spot checks on the quality of childrens furniture products in 2018, in which the inspected units are named Shenzhen IKEA Home Limited Company, IKEA as the trademark, IKEA Trade (China) Limited as the name of the production units, and Bright Blue/303.3 as the model specifications. A Vimond Childrens Desk and Chair of 15.41 was found to be unqualified for the Warning Sign project.

Compared with substandard product quality, what makes Muji and IKEA more uncomfortable is the weak growth of performance in China.

Similar to Muji, IKEA, the Swedish home giant, is experiencing bottlenecks in sales growth. IKEA formally entered the Chinese market in 1998, and now has more than 20 branches in the mainland of China. In fiscal year 2016-2018, IKEAs sales in China increased by 19.4%, 14% and 8.4% year on year, showing a downward trend in growth. From the global market point of view, IKEAs development is not optimistic. In fiscal year 2018, IKEAs sales grew by nearly 5%, but its net profit fell from 2.47 billion euros in the previous fiscal year to 1.47 billion euros, down more than 40% from the same period last year.

Why did myth break down?

Tang Xingtong, an expert member of the Network Marketing Research Center of China Electronic Commerce Association, said in an interview with Beijing Business Daily: On the one hand, the rapid growth of Muji and IKEA in China is largely due to the blind worship and follow-up of emerging middle-class consumers, but due to Muji and IKEA products. Goods belong to durable goods and consumables, and the market increment of repeated purchases by consumers is relatively stable, which we all feel after tasting fresh. On the other hand, Muji Goods and IKEA have also trained a series of competitors at home. The rise of Chinese local brands has made them competitive in terms of products and prices. Potential, coupled with the impact of the Chinese national product scenario, consumers tend to be more rational and pay for the cost-performance ratio.

The breakdown of IKEA giant myth is related to the hesitation and lagging behind of e-commerce. Chinese household enterprises are embracing e-commerce rapidly and exploring the integration of online and offline. In 2018, the giants in the field of household circulation and Red Star Merkelon competed to hand over 12 billion yuan and 16 billion yuan in Shuang11 respectively, while IKEA China only cautiously stepped out the pace of e-commerce development in October 2018, 20 years after IKEA entered China. More importantly, IKEAs consistent Nordic style is also experiencing cross-regional and time tests. IKEA is now facing a consumer group of the Millennium generation. For the younger generation with new ideas, IKEA hopes to embody personality and quality of life in a simple atmosphere. In addition, IKEAs proud store line design is increasingly losing popularity. According to a survey conducted by Finance and Economics Network Weibo recently, up to 61.9% of people are not satisfied with IKEAs labyrinth shopping experience. On June 25, 2019, Luo Yonghao, founder of Hammer Technology, publicly criticized IKEA on Weibo as labyrinth-like store road. Line-guided design (in order to allow customers to take the longest route possible to complete more transactions) can only be described as shameless and abusive. Source: Guo Chenqi_NBJ9931, Responsible Editor of Beijing Business Daily

The breakdown of IKEA giant myth is related to the hesitation and lagging behind of e-commerce. Chinese household enterprises are embracing e-commerce rapidly and exploring the integration of online and offline. In 2018, the giants in the field of household circulation and Red Star Merkelon competed to hand over 12 billion yuan and 16 billion yuan in Shuang11 respectively, while IKEA China only cautiously stepped out the pace of e-commerce development in October 2018, 20 years after IKEA entered China. More importantly, IKEAs consistent Nordic style is also experiencing cross-regional and time tests. IKEA is now facing a consumer group of the Millennium generation. For the younger generation with new ideas, IKEA hopes to embody personality and quality of life in a simple atmosphere.

In addition, IKEAs proud store line design is increasingly losing popularity. According to a survey conducted by Finance and Economics Network Weibo recently, up to 61.9% of people are not satisfied with IKEAs labyrinth shopping experience. On June 25, 2019, Luo Yonghao, founder of Hammer Technology, publicly criticized IKEA on Weibo as labyrinth-like store road. Line-guided design (in order to allow customers to take the longest route possible to complete more transactions) can only be described as shameless and abusive.