Core Viewpoint - MUJI is experiencing a significant contraction in its retail presence in China, with multiple store closures in major cities, attributed to quality disputes, rising competition from local brands, and ongoing price reductions that have not effectively restored its market position [5][9][15]. Group 1: Store Closures - MUJI has announced the closure of several stores, including the Beijing Shimao Gong San store, which will cease operations on August 31, 2025 [7][9]. - Other stores that have closed recently include locations in Beijing, Shanghai, Ningbo, Jinan, and Suzhou, indicating a broader trend of store reductions across major urban areas [10][15]. - The company claims that these closures are part of a normal adjustment process to improve operational efficiency in response to declining foot traffic in certain shopping districts [15]. 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 [19][28]. - There have been numerous complaints regarding product quality, with customers reporting issues such as broken luggage handles and defective clothing, leading to dissatisfaction and loss of trust in the brand [30][39][42]. - The company has faced administrative penalties related to product quality, highlighting ongoing concerns about its product standards [42]. Group 3: Market Competition and Strategy - Since 2015, MUJI has seen a slowdown in same-store sales growth in China, with negative growth reported in 2018 [44]. - In response to market challenges, MUJI has implemented a series of price reductions over the years, with some products seeing price cuts of up to 50% [44]. - The company has also focused on localization strategies, establishing a separate China division to better cater to local consumer preferences and reduce costs [44]. Group 4: Financial Performance - According to the financial report from MUJI's parent company, sales for the nine months ending May 31, 2025, increased by 19.2% to 591.09 billion yen (approximately 28.71 billion RMB), with net profit rising by 30.1% to 43.59 billion yen (approximately 2.12 billion RMB) [45]. - MUJI's direct stores and e-commerce channels in mainland China have recorded continuous growth for ten months, with a cumulative year-on-year increase of 117.3% [46].