Our trainee reporter Lin Yingying
For the first time, sales in the Chinese market have been declining, and product quality problems have been repeatedly exposed ... Since entering the Chinese market in 2005 and setting off a wave of "Muji style", MUJI products have entered a "eventful autumn" in recent years.
A few days ago, a report on MUJI's "same-store sales in the Chinese market fell for the first time" spread, again arousing attention to its performance. In response to this report, MUJI (Shanghai) Commercial Co., Ltd. (hereinafter referred to as "MUJI China Headquarters") told a reporter from Securities Daily: "We have never announced the specific sales value of the mainland China market, Official IR information, there are many factual errors in the data mentioned in the report. "
Official rumors "Chinese market sales decline"
Regarding the aforementioned report, the rumor rumor of MUJI's China headquarters came very quickly. In response to questions from our reporter, MUJI China headquarters stated that the report stated that the company's comparable sales growth in the Chinese market has continued to decline since 2016. The company believes that its lack of data support is purely fabrication.
MUJI's China headquarters further added that the news report stated that “in the near future, the good product plan (the MUJI parent company) announced the first quarter fiscal year 2020 performance report ...” and other content was obviously wrong; and said the company ’s “2020 The February First Quarterly Settlement Express Report was released in July 2019, and the relevant data is the current net profit data of the parent company's good product plan, not the net profit of MUJI's sales in the Chinese market.
However, "Securities Daily" reporters inquired about the public financial report on the investor relations website of the Good Product Plan and found that the company's performance in the middle of last year has seen an overall increase in revenue without increasing profits.
On October 11, 2019, Good Product announced the results for the second quarter (6 months from March 1, 2019 to August 31, 2019) of the fiscal year ending February 2020 (hereinafter referred to as "fiscal year 2020"). report. During the reporting period, good products planned to increase revenue without increasing profits, achieving operating income of 216.451 billion yen, a year-on-year increase of 7.54%; net profit attributable to mothers was 13.27 billion yen, a year-on-year decrease of 26.69%.
Specifically, in the second quarter of fiscal 2020, the operating income of Good Product in the local Japanese market was 132.847 billion yen, a year-on-year increase of 6.6%; and the profit was 13.296 billion yen, a year-on-year decrease of 8%. In the East Asian market (except Japan) during the same period, Good Product plans to achieve operating revenue of 62.634 billion yen, a year-on-year increase of 6.9%; segment profit decreased by 5.6% year-on-year to 8.676 billion yen. Regarding this, the good product plan stated in its financial report: "In the Chinese market, sales have increased due to the strengthening of new store openings, and the price-adjusted T-shirts and bedding products have performed well; but on the other hand, domestic products in the Korean market have been relatively sluggish. . "
Chen Gang, a licensed representative of Aide Securities Futures, told the Securities Daily reporter that in the middle of FY 2020, the cost of the good product plan will increase significantly faster than revenue. The increase in the two major expenses of sales and management will erode profits significantly, and the increase in labor costs It will also dilute profit margins. In addition, the company has opened a number of new stores in Japan and the Chinese market in recent years, or it is a key factor that has led to rising costs.
Regarding the topic of MUJI price reduction that has been a concern, Chen Gang believes: "MUJI has lowered the price of its products. If the increase in product sales can offset the impact of falling prices, the impact on the company will be positive, and vice versa. It's just a strategy, and every company will find a balance point to maximize profits. "
MUJI plunges into "eventful autumn"
It is worth noting that MUJI has been repeatedly exposed in the past year to problems such as product quality, which has caused some adverse effects on its overall image.
It is understood that in February 2019, the bottled drinking water "natural water" produced by the Kurobe City factory in Toyama Prefecture, Japan was detected as a carcinogen suspected to be bromate, and MUJI announced the recall of 3 bottled waters on its Japanese official website.
In the Chinese market, as of 2019, MUJI was first pointed out by the Hong Kong Consumer Council. Some of its biscuit foods were tested for genotoxic and carcinogenic glycidyl alcohol and acrylamide; they were then spot-checked by the Beijing Market Supervision Bureau. It was found that the quality of some of its furniture products was unqualified. According to the results of the quality inspection of furniture products in the circulation field released by the Beijing Market Supervision Bureau, the main problem of several unqualified furniture from MUJI is that the nominal material does not match the actual material.
After the above-mentioned furniture incident, MUJI China publicly released a statement of situation, apologizing for the unqualified quality of the furniture products during the random inspection, and promised to provide return and exchange services for customers who purchased related products. The company also stated that it will carry out a comprehensive inspection and correction of the wood names used in its furniture, and increase the detection of furniture products to avoid similar situations from happening again.
Chen Gang believes that the above situation reflects the company's weak management of the production link: "MUJI is not like Uniqlo. The latter involves a very single field, while the former involves a very broad field, which is more difficult to manage, especially in food. Beverages and other production areas are most prone to problems that can directly affect human health, and are often enlarged by the market. In order to pursue profits, MUJI has expanded its stalls to a large extent, which does not match the current management capabilities, and has appeared many times. It has been exposed that there are product quality issues. "
However, it seems that MUJI is still trying more development directions. In December 2019, MUJI announced on its official website that it will provide MUJI INFILL home improvement services in China, and opened its first MUJI INFILL store in Qingdao, Shandong. In response, the MUJI China headquarters responded to "Securities Daily" reporters: "From MUJI HOTEL to MUJI INFILL, our starting point has always been to allow customers to experience a 'feeling good life'. The expansion of MUJI home improvement is our starting point for consumers. Looking at goods and exploring how to realize the concept of a better life. "