Core Viewpoint - MUJI is experiencing a store closure trend in China, attributed to operational adjustments and increased competition from local brands offering better price-performance ratios [1][2][3]. Group 1: Store Closures and Operational Adjustments - MUJI announced the closure of its store in Beijing's Shimao Gong 3 Mall, effective August 31, 2025, citing operational efficiency as the reason for the closure [1]. - The company maintains that it plans to open approximately 40 new stores annually, having opened 15 stores since March 1, 2025 [1]. - The closure of the Shimao Gong 3 store is not an isolated incident, as another store in Beijing's Guorui City also closed earlier in the year [1]. Group 2: Market Competition and Consumer Sentiment - The rise of local brands such as Miniso and Netease Yanxuan has intensified competition, with these brands offering similar products at significantly lower prices, often 1/3 to 1/2 of MUJI's prices [2][3]. - Consumer dissatisfaction with MUJI's pricing and perceived quality has been growing, with complaints about high prices not matching product quality [6][7]. - A notable example includes a consumer comparison where a similar scented machine costs 59 yuan from a local brand versus MUJI's price of 258 yuan [7]. Group 3: Legal Challenges and Brand Identity - MUJI has been embroiled in a long-standing trademark dispute with Beijing Cotton Field Textile Co., which has further complicated its brand identity in China [4][5]. - The Supreme People's Court upheld Beijing Cotton Field's ownership of the "MUJI" trademark for home textiles, which has led to brand confusion and diminished MUJI's unique market position [5]. Group 4: Future Outlook - Industry experts suggest that MUJI may need to adapt its business model to focus on price competitiveness and faster fulfillment to survive in the evolving retail landscape [8]. - The company may face further store closures if it does not adjust its pricing strategy and operational model to better compete with local alternatives [8].

Core Viewpoint - MUJI is experiencing a significant contraction in its retail presence in China, with multiple store closures in major cities, indicating challenges in maintaining profitability and market relevance [4][5][12]. Group 1: Store Closures - MUJI has announced the closure of several stores, including the Beijing Shimao Gong 3 store, which will cease operations on August 31, 2025, and has already closed locations in other cities such as Shanghai and Changsha [6][8]. - The company has stated that these closures are part of a normal adjustment to improve operational efficiency in response to declining foot traffic in certain shopping districts [12]. - Despite the closures, MUJI plans to continue opening approximately 40 new stores annually, having opened 15 new locations since March 1 of the current year [12]. Group 2: Pricing and Quality Issues - MUJI's pricing strategy has come under scrutiny, with consumers questioning the high prices of products that are often manufactured in China, leading to a perception of poor value [16][19][22]. - Quality concerns have also been raised, with customers sharing negative experiences regarding product durability and customer service, which has led to administrative penalties for the company related to product quality issues [30][33]. - The brand's shift from a "plain brand" to a mid-to-high-end positioning in China has not resonated as strongly with consumers in recent years, leading to a decline in sales growth [22][35]. Group 3: Market Competition - Since 2015, MUJI has faced slowing same-store sales growth in China, with the first negative growth recorded in the second quarter of 2018 [35]. - The company has attempted to adapt by implementing price reductions and localizing its product offerings, which has resulted in a notable increase in sales, with a 19.2% year-on-year growth reported for the nine months ending May 31, 2025 [38]. - However, competition from local brands offering similar styles at lower prices, such as Miniso and NǒME, poses a significant challenge to MUJI's market share [39][42].