Core Insights - MUJI is experiencing a wave of store closures in China, including its Beijing Shimao Gong 3 store, which is set to close by August 31, 2025, amidst a changing consumer landscape that favors affordability over premium pricing [1][2] - The brand, which has been a symbol of quality for middle-class consumers since entering the Chinese market in 2005, is now facing intense competition from local brands and online channels that offer lower prices [1][3] Store Closures - The closure trend is not isolated to the Beijing Shimao Gong 3 store; other locations in cities like Shanghai, Changsha, and Suzhou have also announced closures [2] - MUJI has stated that despite the closures, it has opened 19 new stores in mainland China since 2025, maintaining a net growth strategy [2] Market Performance - As of August 18, 2023, MUJI operates 421 stores in mainland China, making it the second-largest market after Japan [3] - The East Asia division of MUJI reported a revenue increase of 14.1% for the nine months ending May 31, 2025, with profits rising by 27.5% [4] Pricing and Competition - MUJI's pricing strategy in China is perceived as high-end compared to its original positioning in Japan, which has led to a mismatch with current consumer trends favoring lower prices [4][5] - Local competitors like Miniso and Xiaomi have rapidly expanded, with Miniso reaching 7,488 stores globally, further intensifying the competitive landscape [5] Future Strategy - MUJI acknowledges the shift in consumer behavior towards quality and purpose-driven purchases, planning to enhance product quality and service competitiveness [5] - The company aims to open approximately 40 new stores annually, focusing on first, new first, and second-tier cities, while also considering potential in third-tier cities [5]