To mitigate the risk of dilute brand perception towards Muji, the brand needs to be very strategic in selecting brands that share and embody similar values as Muji. Hence it will be important for the brand to place relentless focus on this. These brands have been expanding globally very rapidly in recent years.
In fact, this started as early as the s — another company with 14 stores had used its name together with the Japanese characters, to sell cheap, colourful and poorly designed products. Counterfeiting is not an uncommon problem for brands to tackle in China as the Republic attempts to overcome its country of origin challenges.
To combat this challenge, Muji opened its first Shanghai store in and created a department to set rules for store design, layout and merchandising, trained all frontline staff and streamlined its operational processes. Hence, instead of succumbing to the price competition, Muji needs to find ways that it can further differentiate itself while staying focused on its brand identity.
This could mean investing more on innovation and consumer research to design better products than its competitors. With this growing proportion, it is crucial for Muji to continue expanding globally. However, this does not come without challenges. For example, due to high shipping, rental, labour and construction costs in USA, its store sizes, products offered, and low product pricing are limited.
Muji plans to overcome these challenges by manufacturing some of its higher-margin products like its home storage systems in the Americas and carefully selecting the perfect subset of products for each location. In addition, to overcome fierce competition without advertising, Muji has relied on innovation to bring in new retail concepts its USA stores, like its create-your-own-essential-oil and embroidery services.
Moving ahead, Muji will need to pay close attention and conduct keen market research of the cities it plans to expand into to successfully turn its stores in new locations into profitable ones. For example, it took Muji almost a decade to introduce bedsheets that fit standard Chinese beds, demonstrating the need for the brand to pay more attention to offering products that cater to local needs.
In September , it opened its first development office in China with a Consumer Lifestyle team responsible for monitoring local trends. While this is a good start, Muji also needs to ensure it does the same for the other markets it has expanded to. Muji was then forced to file a lawsuit in to secure rights to retail under its own brands in China.
With the widespread public attention during these periods, it is critical that Muji communicates hard facts to the public in a timely manner in order to manage consumer perceptions towards its brand. Apart from trademark issues, Muji has also faced the challenge of having fake news reported on its manufacturing processes.
In times of disruption and quickly evolving customer needs, it will become even more important for Muji to continue keeping a close eye on how its customers interact with the brand in order to design and implement initiatives to further enhance the customer relationship.
Muji react to this by publishing a statement clarifying that its production processes do not support finning activities and that the Blue Shark species that it uses belong to the lower risk species and are not near extinct. Apart from the overwhelmingly successful Muji Passport app, Muji had introduced a sleep-inducing app, Muji to Sleep, together with the launch of its neck cushion product line. This is a good example of how Muji has leveraged digital to further enhance the product and hence customer experience.
However, it seems to have faced challenges in its e-commerce operations as it has discontinued the online store in markets like Singapore. To be able to fully leverage customer demand especially in developed cities, it will be important for Muji to look into its e-commerce capabilities to enhance the digital experience for customers.
Looking ahead, digital technologies such as artificial intelligence, robotics and block-chain are already making huge waves across industries. The potential opportunities for Muji to leverage and harness these digital capabilities to its advantage are tremendous. From its retail stores to its hotels and campsites, the anti-brand brand is one of the fastest growing brands from Japan and Asia.
Building and sustaining a no-brand personality that is consistently relevant and that resonates with the customer base will be one of the main challenges Muji will face in the coming years in its quest to continue building up the brand equity. Muji, with its presence in diverse markets, has managed to overcome this challenge of building a relevant and resonant brand personality by focusing on its roots. Although this is a threat to every company, Muji has faced this issue numerous times in the past years of its global expansion.
Hence, it needs to pay extra attention in managing brand perception through public relations. Brands that successfully withstand economic cycles stay true to their core. Although Muji has been innovative in the design of its home products and lifestyle experiences, it needs to continuously invest in innovation in order to maintain the focus on its superior design.
Asian Brand Strategy provides key insights and knowledge about the rising Asian brands incl. Although customers in these markets liked what we offered, and our revenues were strong, we had problems similar to those we faced in the UK.
By we were financially stable enough to revisit our pan-Asian ambitions. We established a Hong Kong subsidiary in and began to open stores again, at a rate of about two a year. In we did the same in Singapore, and in we established Muji Korea. We also resumed European expansion at that time, with licensing deals in Scandinavia and the creation of Muji Italia.
Then came our entry to mainland China. In the early s we began to notice that although we had registered our logo and brand in the country, other companies were using it—the same letters, the same Japanese characters—to sell cheap, colorful, and poorly designed products that looked nothing like ours. One of these fakers had 14 stores, some of them in Hong Kong. We opened a Shanghai store in Quality control was still a concern, however, especially as we considered the vast geographic expanse of the Chinese market.
So when I was appointed president of Ryohin Keikaku, in , one of my first priorities was to ensure that the Muji experience—from walking into a store to buying and using our products—would feel exactly the same no matter where you were in the world. We created a department to set rules for store design, layout, and merchandising. We began to give all frontline staff members the same training and to bring many locally hired store managers to our offices in Tokyo for instruction. We streamlined our distribution, accounting, and merchandising so that we could all share the same data.
And although we now manufacture and sell more than 7, items, we do no customization or adaptation for particular countries or regions. I like to say that Muji goods should be like water: of universal appeal. And I believe that this adherence to a uniform vision and execution has been the key to our success in recent years, not just in mainland China and Hong Kong, where we now have and 17 stores respectively, but also in other overseas markets.
Even as our international growth ramped up elsewhere in the mids, we approached the U. Second, the culture of consumer litigation scared us.
For example, I remember hearing a story perhaps an urban legend at the time we were discussing our U. How could any B2C business survive in an environment like that? Of course, in a global context, we knew how important the U. In places that have a surfeit of stuff to buy and many retailers trying to sell you more and more, we think our products can be particularly useful.
New York City was an obvious first destination, and we chose SoHo for its young, hip vibe, opening in Prices were also more expensive than their home base which had pushed many consumers to seek elsewhere for cheaper dupes instead. Beyond the states, Muji continued to suffer even within its home markets from ongoing store closures and weak consumer spending.
Monthly same-store sales halved during the peak cases in April and May, resulting in an operating loss of 2. More significantly, the group last year had reported a decline in their operating profit for the first time after eight years of continuous growth. Other international markets such as Korea were undergoing an anti-Japanese sentiment , whereas Hong Kong is still impacted by their political turmoil.
However, the brand has been reluctant to write down the value of unsold goods to protect its quality standpoint and branding in addition to controlling its gross profit margins. Casting higher prices abroad are inevitable given its production and shipment costs, hence its decision to shift production from China to cheaper locations in South East Asia and India to alleviate this problem.
Despite the global turmoil, Ryohin Keikaku group plans to expand its global network to 1, stores by August next year, an increase from its current portfolio of stores. New business streams in furniture subscription have also emerged in light of the new work-from-home schemes. With a focus in China, half of its current global outlets are based in the region blessed with newer innovative formats such as its Muji Hotel and its first convenience store held within JD. Profit from additional features by authenticating your Admin account.
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