Core Viewpoint - MUJI celebrates its 20th anniversary in mainland China with the release of a special publication titled "MUJI: The Voice," highlighting the stories of 21 loyal customers and 21 best-selling products over the past two decades [1][3]. Group 1: Anniversary Celebration and Publication - The special publication "MUJI: The Voice" was co-created with 21 consumers who love the brand, documenting the journey of 21 classic products that have been popular in the Chinese market since MUJI's entry in 2005 [3][5]. - MUJI's art director, Naoto Fukasawa, expressed the hope that MUJI can continue to resonate deeply with people's inner lives through its stores and products, reflecting the respect for Chinese culture [1][5]. Group 2: Product Development and Localization Strategy - MUJI has opened a total of 414 stores in mainland China, including 14 flagship stores, covering 81 cities, demonstrating its commitment to the Chinese market [8]. - The company adheres to three fundamental principles in product development: selection of raw materials, improvement of processes, and simplification of packaging, integrating "the power of nature" into daily life [8][10]. - Since 2019, MUJI has implemented a localization strategy, establishing a local product development team to create products that cater to Chinese consumers, resulting in 70% of its lifestyle goods being locally developed [10]. Group 3: Future Plans and Market Potential - MUJI plans to launch a "Gratitude Season" event in July to celebrate its 20th anniversary, offering exclusive gifts and special discounts [7]. - The company views the Chinese market as its most important overseas market and aims to continue expanding its investment and presence in the region, recognizing the unique potential for growth [10].

Core Insights - MUJI, known for its minimalist lifestyle products, initially thrived in China by aligning with the emerging middle class's aesthetic preferences, transitioning from "having" to "experiencing" [1][5] - However, by the 2020s, the unique appeal of MUJI's restrained aesthetics diminished as local competitors like MINISO and NetEase Yanxuan emerged, offering similar products at lower prices [2][8] - The brand is now facing significant challenges, including slowing sales growth, declining store popularity, and a shift in consumer perception, which has led to a decrease in its market position [4][10] Company History and Market Position - MUJI entered the Chinese market in July 2005, opening its first store in Shanghai and gradually expanding its presence, reaching 256 stores by the end of 2019 [5][15] - The brand's initial success was fueled by the rise of the middle class in China, who valued quality and aesthetic living, making MUJI a symbol of taste and quality [7][8] - Despite rapid expansion, the changing retail environment, including the rise of e-commerce and increased competition, posed risks that were not adequately addressed [8][10] Competitive Landscape - MUJI now competes with numerous local and international brands that offer similar products at more competitive prices, such as MINISO, which has over 4,386 stores in China and reported a revenue of 17 billion RMB in the 2024 fiscal year [8][9] - The emergence of e-commerce platforms like NetEase Yanxuan, which offers products at significantly lower prices, has further eroded MUJI's market share and brand perception [9][10] - Consumer sentiment has shifted, with many viewing MUJI as "worth visiting but not worth buying," leading to a decline in its perceived value [10][11] Financial Performance - MUJI's revenue in China for the 2024 fiscal year was approximately 1,182 billion yen (about 56.3 billion RMB), accounting for only 18% of its global revenue, indicating a significant gap compared to local competitors [8][15] - The brand has experienced a decline in same-store sales since 2016, with negative growth starting in 2018, highlighting ongoing operational challenges [13][14] Strategic Challenges and Opportunities - MUJI's pricing strategy has been criticized, with consumers perceiving its products as overpriced compared to local alternatives, leading to a loss of its competitive edge [10][11] - The brand has attempted to address this by implementing multiple price reductions since 2014, but these efforts have not fully restored consumer confidence [11][12] - The company is now focusing on localizing its product offerings and optimizing its supply chain to improve cost efficiency and better meet consumer needs [19][20] Future Strategies - MUJI plans to enhance its brand communication and reposition itself to emphasize quality and value, aiming to regain consumer trust [17][18] - The company is also exploring local product development to cater to Chinese consumer preferences, which includes introducing products that resonate with local tastes and lifestyles [19][20] - Additionally, MUJI is set to innovate its retail channels by launching smaller, more affordable store formats like "MUJI 500" to attract a broader customer base [23][24]