MUJI good response to Chinas market sales decline false

category:Finance
 MUJI good response to Chinas market sales decline false


Official refutation of Chinas market sales fall

For the above reports, the rumor refutation of Muji China headquarters came very quickly. In response to our reporters questions, Muji China headquarters said that the report about the companys comparable sales growth in the Chinese market since 2016 continued to decline and other content, the company believes that its lack of data support is pure fiction.

However, a reporter from Securities Daily found that the companys performance in the middle of last year has seen an overall increase in revenue but no increase in profit.

On October 11, 2019, liangpin plan released its performance report for the second quarter of the fiscal year ended February 2020 (hereinafter referred to as the fiscal year 2020) (from March 1 to August 31, 2019, a total of six months). During the reporting period, liangpin plans to increase revenue without increasing profit, achieving an operating revenue of 216.451 billion yen, up 7.54% year on year, and a net profit attributable to the parent of 13.27 billion yen, down 26.69% year on year.

Specifically, in the second quarter of fy2020, liangpin plans to generate operating revenue of jpy132.847 billion in the local Japanese market, an increase of 6.6% year-on-year, and realize profit of jpy13.296 billion, a decrease of 8% year-on-year. In the same period of East Asia market (except Japan), liangpin plans to achieve an operating revenue of 62.634 billion yen, an increase of 6.9% year on year; segment profit is down 5.6% year on year to 8.676 billion yen. In this regard, the good plan announced in its earnings report: in the Chinese market, sales increased due to the strengthening of new stores, and the T-shirts and bedding products that adjusted prices were good, but on the other hand, household goods in the Korean market were relatively low.

Chen Gang, a licensed representative of Eide securities and futures, told the Securities Daily that in the mid-2020 fiscal year, the cost growth of liangpin plan was significantly faster than that of revenue, the increase of sales and management costs significantly eroded profits, and the rise of labor costs would also dilute the profit margin. In addition, the company has opened a number of new stores in Japan and China in recent years, or a key factor leading to the rising cost.

As for the topic of price reduction of MUJI products, Chen Gang thought: MUJI products reduce the price of goods, if the increase of sales volume can offset the impact of price reduction, then the impact on the company is positive, and vice versa. Price reduction is just a strategy, and every company will find a balance point to maximize profits.

MUJI good products fall into the eventful autumn

It is worth noting that MUJI products have been exposed many times in the last year, which has a certain negative impact on their overall image.

It is understood that in February 2019, due to the detection of suspected carcinogen bromate in bottled drinking water natural water produced by Heibu factory in Fushan County, Japan, MUJI liangpin announced the recall of three bottled water products on its Japanese official website.

In the Chinese market, as in 2019, MUJI products were first pointed out by the Hong Kong Consumer Committee that some of its biscuits contain epoxypropanol and acrylamide with genotoxicity and carcinogenicity; later, it was found by the Beijing market supervision bureau that some of its furniture products are unqualified. According to the results of random inspection on the quality of furniture products in the circulation field released by Beijing market supervision bureau, the main problem of several pieces of non-conforming furniture from MUJI products is that the nominal material is not consistent with the actual material.

After the above furniture incident, MUJI liangpin China has publicly released a situation statement, apologized for the unqualified quality of the furniture products in the sampling inspection, and promised to provide return and exchange services for customers who purchased related products. The company also said it would carry out a comprehensive inspection and correction of the names of the wood used in its furniture, and increase the testing of furniture products to avoid similar situations.

According to Chen Gang, the above situation reflects the weakness of the companys management of production links: Muji good products are not like UNIQLO, the latter involves a very single field, while the former involves a wide range of fields, so it is difficult to manage. Especially in the production fields such as food and beverage, problems that can directly affect human health are most likely to appear, which are often magnified by the market. In order to pursue profits, MUJI products spread the stall a little larger, which is not matched with the current management ability, so it has been exposed for many times that there are product quality problems. But at present, MUJI products are still trying more development directions. In December 2019, Muji infill announced on its official website that it would provide Muji infill home decoration services in China, and opened its first Muji infill store in Qingdao, Shandong Province. In response to this, Muji China headquarters responded to the reporter of Securities Daily: from mujihotel to mujiinfill, our starting point is always to let customers experience feel good life . The development of Muji good home decoration is the idea that we look at commodities from the perspective of consumers and explore how to achieve a better life. Source: responsible editor of Securities Daily: Yang qian_nf4425

According to Chen Gang, the above situation reflects the weakness of the companys management of production links: Muji good products are not like UNIQLO, the latter involves a very single field, while the former involves a wide range of fields, so it is difficult to manage. Especially in the production fields such as food and beverage, problems that can directly affect human health are most likely to appear, which are often magnified by the market. In order to pursue profits, MUJI products spread the stall a little larger, which is not matched with the current management ability, so it has been exposed for many times that there are product quality problems.

But at present, MUJI products are still trying more development directions. In December 2019, Muji infill announced on its official website that it would provide Muji infill home decoration services in China, and opened its first Muji infill store in Qingdao, Shandong Province. In response to this, Muji China headquarters responded to the reporter of Securities Daily: from mujihotel to mujiinfill, our starting point is always to let customers experience feel good life . The development of Muji good home decoration is the idea that we look at commodities from the perspective of consumers and explore how to achieve a better life.