Looking back into the past, RMB 10 yuan could still cover one's daily board expense in a medium-sized city several years ago; nowadays, however, it is impossible for you to buy two potluck meals with the same money, no matter where you are. It is only the worth of a simple meal or a few fruits that can hardly make up half of a kilogram. The purchasing power of RMB 10 yuan is decreasing rapidly, in other words, it is depreciating continuously. In China, a country where the GDP is growing rapidly, the price level of commodities is also soaring. It is miserable to live in a time when everything inflates, except for the stock price or income. To make things worse, the prices of some necessities of life are hyped up to unacceptable levels. No wonder even white collars who make RMB 7500 yuan a month feel economically insecure. In fact, RMB 10k/month is barely enough.
The economic situation nowadays is dismal since the growth of income lags behind the growth of GDP, and the growth of GDP is no match for that of commodity price. Under this background, a morbid business philosophy of making short-term profit at the cost of business sustainability spreads rampantly. Many irresponsibility merchants are selling inferior products under the catchphrase of low-price, a ridiculously sad phenomenon that reflects the dilemma confronting both merchants and consumers.
Many commodities are overpriced, and people become more and more suspicious about the trustworthiness of the retail sector. As a famous franchise chain rooted in China, MUMUSO has done more than grieve over this unfavorable situation by abstaining from ill business practices and breaking the vicious circle.
Prolonged inflation has planted a misconception in people that the cost of commodities are quite high. But in fact the ex-factory prices of them are not that high. The end market prices of commodities can be some ten-odd times or even dozens of times of the ex-factory prices after the addition of transportation cost , channel cost, middleman cost, agent cost, labor cost, and branding premium.
MUMUSO purchases its commodities directly from factory at large scale and as a result the unit costs of MUMUSO commodities are lower, explained Mr. Chunlei Xia, CEO of MUMUSO, to our journalist during an interview, " MUMUSO does not sell cheap commodities, rather, it sells commodities of good cost performance. Over time, many raw materials will be available from multiple sources and at low prices. However, if we stress excessively on low price, we will not get satisfactory commodities. So we just choose the best commodities from those available at the same price and surrender more profits to our customers. Honestly speaking, our commodities' unit profit is very low, but the large sales volume enables us to provide competitive cost-performance. This intensive value is the foundation of our new commercial retail mode.
Low price does not necessarily be the synonym of poor quality. At MUMUSO, all commodities are of guaranteed quality and orderly displayed on shelves in a bright and comfortable shopping environment. MUMUSO provides consumers with premium services at affordable prices and by doing so makes contribution to the society.
This high cost performance relies on premium quality and aims to improve end consumers' consumption experience by virtue of the commodities' human-based design. It is MUMUSO's hope that consumers would take it as a family member or a friend rather than a retailer.
This high quality and affordable price based business strategy will certainly have a significant impact on the new retail sector. Many retailers, including cheap commodities stores and expensive brand stores, have been shocked by this seemingly "unprofitable" crazy strategy of MUMUSO. In the beginning they just looked on coldly, ready to enjoy the show; later they realized that they could not afford to under-estimate MUMUSO and began to contrive countermeasures. It can be said that MUMUSO, a 10 Yuan Franchise Chain, counterattacked into the new retail market.
It become evident that the business strategy of good quality at affordable price is a new way out for the retail sector. Any enterprise that neglects consumers feeling and tries to make money by cheating or hyping up will be driven out of the retail market.