Core Viewpoint - MUJI's business model in China is facing significant challenges, leading to a series of store closures and a shift in consumer perception, marking the end of an era for the brand in the Chinese market [4][8]. Group 1: Store Closures and Financial Performance - MUJI has announced the closure of its Beijing Shimao Gong San store, set to close on August 31, 2025, as part of a broader trend of store closures in China, with 30 stores closed from 2022 to 2024 [5][7]. - As of May 2025, MUJI has closed 17 stores in mainland China, including locations in Shanghai, Suzhou, Jinan, Yantai, and Changsha [7]. - Despite the closures, MUJI plans to open approximately 40 new stores annually, with 15 new stores opened from March 1 to the present [48][51]. Group 2: Brand Image and Consumer Trust - The brand's image has deteriorated due to multiple product quality issues, including non-compliance with safety standards for various products, leading to a loss of consumer trust [10][13][17]. - Complaints against MUJI have surged, with 2,407 complaints reported on the Black Cat Complaints platform, covering issues like product quality and poor after-sales service [19]. - The brand's pricing strategy has also come under scrutiny, with products priced 25%-30% higher in China compared to Japan, leading to consumer dissatisfaction [33][41]. Group 3: Market Competition and Consumer Behavior - The rise of domestic competitors offering similar products at lower prices has intensified competition, challenging MUJI's market position [35][37]. - Changing consumer preferences towards value for money and quality have made it difficult for MUJI to maintain its previous appeal as a premium brand [37][54]. - The brand's attempts to adapt by introducing new store formats and product lines, such as "farm concept stores" and pet products, indicate a response to evolving market demands [55][57]. Group 4: Strategic Adjustments - MUJI is shifting its focus from traditional retail to online platforms, enhancing its e-commerce capabilities to drive growth [54][57]. - The company is also experimenting with larger flagship stores and diverse product offerings to attract a broader customer base [49][50]. - Despite these efforts, the brand faces a dilemma in balancing its original identity with the need to adapt to current consumer trends [57].

Core Viewpoint - MUJI is facing significant challenges in the Chinese market, leading to a wave of store closures and a decline in brand reputation due to quality issues and increased competition from local brands [5][6][30]. Group 1: Store Closures and Market Challenges - MUJI has announced the closure of its Beijing Shimao Gong San store by August 31, 2025, marking a significant shift after over a decade of operation [5]. - The company has closed a total of 30 stores in mainland China from 2022 to 2024, with 17 closures reported by May 2025 [5][6]. - The brand's decline is attributed to the rise of e-commerce, the emergence of competitive domestic brands, and changing consumer habits [6][30]. Group 2: Brand Image and Consumer Trust - MUJI's image as a premium brand is deteriorating, with increasing consumer complaints about product quality and service [10][15]. - The brand has faced multiple quality control issues, including non-compliance with safety standards for various products, leading to a loss of consumer trust [11][13]. - Complaints on platforms like Black Cat have surged, indicating growing dissatisfaction among consumers regarding product quality and pricing [15][17]. Group 3: Pricing Strategy and Market Position - MUJI's pricing strategy in China is significantly higher than in Japan, with prices 25%-30% more expensive, leading to consumer disillusionment [27][29]. - The brand's initial appeal as a high-end product has been undermined by the perception of overpriced goods that do not meet quality expectations [17][23]. - Despite attempts to lower prices, the brand struggles to attract consumers in the increasingly competitive market [32][44]. Group 4: Strategic Adjustments and Future Plans - MUJI is adopting a strategy of closing underperforming stores while simultaneously opening new ones in more lucrative locations, aiming for about 40 new stores annually [39][40]. - The company is expanding its flagship stores and diversifying its offerings, including new concepts like "farm concept stores" and pet products [41][44]. - Increased investment in e-commerce and instant retail has shown some positive results, but the brand must navigate the balance between maintaining its identity and adapting to new consumer trends [46][47].

Core Viewpoint - MUJI is experiencing a wave of store closures in China, indicating a strategic contraction in the market, driven by challenges such as high pricing, brand trust issues, and competition from local brands [1][4][12] Group 1: Store Closures and Consumer Behavior - MUJI has closed multiple stores in various cities, including the Shimao Gongsan store in Beijing, which is set to cease operations by August 31, 2025 [4] - Observations in stores reveal a trend of "browsing without buying," with many customers using the space for socializing rather than making purchases, highlighting a disconnect between brand appeal and actual sales conversion [6][7] Group 2: Pricing Strategy and Market Position - MUJI's positioning in China targets middle to high-income consumers with a focus on "simple and quality" living, leading to a perception of high prices compared to local competitors [6][7] - Despite implementing eleven rounds of price adjustments since 2014, the perception of MUJI as expensive persists, with consumers noting that even discounted prices remain significantly higher than similar products in Japan [7] Group 3: Legal and Quality Issues - MUJI faces a long-standing trademark dispute with Beijing Mian Tian Textile Co., which has resulted in a Supreme Court ruling that affects its branding strategy [8][11] - Quality issues have also plagued the brand, with numerous complaints regarding product standards and misleading advertising, further eroding consumer trust [9][11] Group 4: Financial Performance and Future Outlook - Despite challenges, MUJI reported a sales increase of 19.2% year-on-year, with a net profit growth of 30.1% for the nine months ending May 31, 2025, indicating a resilient market presence [12] - However, the company struggles with sustainable growth, as frequent store adjustments and pricing strategies have not resolved the core issues of brand positioning and consumer expectations [13]

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 struggles with profitability and competition from local brands [3][4][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 [4][6]. - Other stores that have closed or are set to close include locations in Beijing, Shanghai, Ningbo, Jinan, and Changsha, reflecting a broader trend of store reductions [6][12]. - The company has stated that these closures are part of a normal adjustment process to improve operational efficiency in response to declining foot traffic in certain shopping districts [12]. Group 2: Pricing and Quality Issues - MUJI has faced criticism regarding its pricing strategy, with consumers questioning the high prices of products that are manufactured in China [16][25]. - Quality concerns have also been raised, with reports of product failures and administrative penalties related to quality issues since 2016 [32][34]. - The company has attempted to address these issues through a series of price reductions over the years, with some products seeing price cuts of up to 50% [36]. Group 3: Market Competition - Since 2015, MUJI has seen a slowdown in same-store sales growth in China, with the first negative growth recorded in 2018 [34]. - The rise of local competitors offering similar products at lower prices has intensified the competitive landscape, impacting MUJI's market share [39]. - Despite recent sales growth, the company acknowledges the need to better align with the diverse and evolving consumer demands in China [41]. Group 4: Financial Performance - MUJI's parent company reported a 19.2% increase in sales to 591.09 billion yen (approximately 28.71 billion RMB) for the nine months ending May 31, 2025, with a 30.1% increase in net profit [36]. - The company has opened 15 new stores in China since March 1, 2025, and currently operates 414 stores nationwide [36].

Core Insights - MUJI, once a favorite among the middle class for its minimalist design and lifestyle, has faced challenges in the Chinese market due to rising competition and consumer dissatisfaction with pricing and product quality [1][5][10] Group 1: Brand History and Market Position - MUJI was founded in 1980 in Japan, initially focusing on low-cost products and quickly gaining popularity [1] - The brand entered the Chinese market in 2005 and expanded aggressively, achieving significant sales growth from 2014 to 2016, with a peak growth rate of 45.7% in 2016 [2] - As of August 2024, MUJI has over 400 stores in China, making it the second-largest revenue source after Japan [3] Group 2: Consumer Perception and Challenges - Despite its initial success, MUJI has faced criticism for high prices, with products often priced 30% higher than in Japan, leading to a perception of poor value [5][10] - The brand has seen a decline in sales across its core categories, with revenue growth not translating into profit, as evidenced by a 22.8% drop in operating profit in 2022 [5][11] - Quality issues have also plagued the brand, resulting in numerous consumer complaints and regulatory penalties [7][10] Group 3: Competitive Landscape - The rise of alternative brands, such as Miniso, which offers similar products at significantly lower prices, has intensified competition for MUJI [10][11] - E-commerce has further increased competition, with brands like NetEase Yanxuan providing high-quality, cost-effective alternatives [10] Group 4: Future Opportunities - MUJI is attempting to regain consumer interest by lowering prices and introducing new product lines tailored to local preferences [12][15] - The company has launched a new store format, "MUJI500," focusing on affordable daily necessities to attract a broader customer base [15] - Continued innovation in product development and a shift towards community-based store locations are seen as essential for MUJI's future success in China [15]