Young people are falling in love with Muji again.

Text | He Zhexin

Editor | Qiao Qian

Recently, Muji has gained a lot of exposure on Xiaohongshu. This time, the star is a Barn-style coat.

With a color combination of navy blue and dark green, minimalist design, and eye-catching pockets, it was quickly mocked by netizens as having a "supply and marketing cooperative style" and "veteran cadre outfit" as soon as it hit the market. There have been continuous secondary creations on social media. Young people flocked to the fitting rooms, with their hands in the red Muji notebooks and wearing "liberation shoe-like" shoes. Posts with titles like "Hello, comrade. Could you tell me how to get to Machine Tool Factory No. 5?" easily gained over ten thousand likes.

However, different from previous cases where a product became popular but didn't sell well, this time, the traffic has been truly converted into real money. The latest financial report shows that Muji's performance in the Chinese market has strongly rebounded after three years of slump, driving the profit of the entire East Asian region to surge by 127.5% year-on-year. According to the Chinese team, the regional revenue and profit have achieved double growth for ten consecutive months.

The Chinese mainland market has long accounted for about 20% of the group's total revenue and is also the region with the largest number of Muji stores outside Japan. Currently, Muji has more than 400 stores on the Chinese mainland.

Muji went from its heyday in the millennium to a long trough more than a decade later and was once regarded as "the victory of affordable alternatives." Brands like Miniso, NetEase Yanxuan, and Jingdong Jingzhao, which are like "students," quickly rose with similar styles and stronger price advantages, seemingly proving that "in the face of cost - effectiveness, taste doesn't matter."

Now, just when the outside world thought it was going to be "taught a lesson" again, Muji has made a comeback against the trend. On the contrary, the former "apprentices" seem to have lost interest in this field. Some people say that this proves that "aesthetic taste cannot be replaced by affordable alternatives"; others believe that this is due to Muji's self - revolution in recent years: price - cut strategies, localization of products, and supply - chain adjustments, which have finally paid off.

Regardless of the reason, Muji's comeback is worth our re - evaluation. In this era of rational consumption, what should a "middle - class" brand rely on to survive economic cycles?

Make it cheaper

After entering the Chinese market, Muji adopted a positioning strategy with higher prices than in its home market. This strategy is quite similar to that of Uniqlo, aiming to meet the consumption needs of young Chinese families after their income increase, especially their pursuit of quality and design. In the early days, this strategy achieved quite good results.

"Simplicity is more attractive than luxury" is the core of Muji's brand philosophy. Chinese consumers have also shown great interest in this simple - style design. After entering the Chinese market, Muji maintained double - digit growth for a long time. Especially from 2007 to 2010, the number of Muji stores increased significantly, the expansion speed accelerated, and the sales growth rate generally remained between 10% and 20% during this period, with the growth rate in some years even exceeding 20%.

According to a survey by "Nikkei MJ," among consumers around the flagship Muji store in Shanghai and the Muji Hotel in Shenzhen, 90% of them said they chose Muji because of its "plain design," while only 48% chose it for its "functionality." This data fully shows that the consumers who initially chose Muji were often those who were less price - sensitive and pursued quality and design.

With Muji's rapid expansion, competition from peers gradually intensified, and pressure followed. Since 2014, Muji has directly reduced the prices of many products. This change marked the brand's attempt to attract more consumers and different market segments through price strategies.

However, the price cuts did not bring the expected results. From 2014 to 2022, Muji carried out at least 11 large - scale "new pricing" campaigns, but these price - cut measures failed to effectively boost sales. On the contrary, as time passed, sales growth continued to slow down, and profits declined earlier.

This phenomenon sparked discussions in the industry. Some speculated that Muji's price - cut margins were not large enough to really address consumers' pain points. For example, the classic suitcase is priced at up to 1,528 yuan in the Chinese mainland, while the same product in Japan is only sold for 900 yuan, with a price difference of almost 70%. This difference made some consumers think that the price cuts were just a gimmick and didn't really benefit consumers, resulting in limited new - customer acquisition.

In addition, Muji's price - cut strategy failed to completely eliminate consumers' doubts. The price - cut measures under the guise of "re - evaluating prices" made some loyal fans doubt the brand's value. Consumers were worried that the brand might lose its original positioning and value during the price - cut process, and some even started to turn to more cost - effective "premium alternatives." This shake in brand credibility clearly put Muji in an awkward position.

After 2022, Muji gradually stopped its straightforward price - cut strategy and adopted a more circuitous approach. At the 2022 financial report meeting, Muji's President Nobuo Domae mentioned the strategic adjustment in the Chinese market. He pointed out that Muji will focus on developing "food" and "daily necessities," including stationery, beauty and skincare products, and small household items. For large - scale furniture, Muji will change its strategy from "mass display and sales" to "providing samples and catalogs and accepting orders." This can not only save store space and operating costs but also improve the efficiency of floor space utilization.

The changes in Muji's beauty category are particularly significant. Its skincare products mainly focus on basic functions such as moisturizing and cleansing, avoiding the complexity of high - end anti - aging products. Popular cosmetics and beauty tools, such as loose powder, eyelash curlers, and eyeliner pens, are all low - threshold products that consumers can easily accept. The simple bottle packaging and product designs in various specifications enable Muji to meet different consumption scenarios. The brand's concept of "no additives" has also successfully attracted consumers who pay attention to ingredients. The core price range is between 30 and 130 yuan, which is quite competitive in the market.

This strategic adjustment has brought remarkable results. According to Muji's 2023 fiscal year report, despite the still challenging overall market environment, the "skincare" and "food" categories in the Chinese market have continued to grow. "We have strengthened product supply and promotion activities to meet consumers' needs," the management mentioned in the report.

At the beginning of this year, the brand officially announced the launch of a low - price store format - "MUJI 500." The "500" in this new store format symbolizes a price of 500 yen, which is equivalent to about 23 - 25 yuan in RMB, meaning that about 70% of the products in the store are priced around "25 yuan." This change not only marks Muji's direct competition with domestic Japanese - style miscellaneous goods brands but also its transformation to be closer to the needs of the local market.

Be more localized

Current President Nobuo Domae was a senior executive with 11 years of experience from Uniqlo's parent company before joining Muji. Shortly after joining Uniqlo, Nobuo Domae promoted the famous ABC plan, which successfully improved Uniqlo's supply chain.

Masaru Yanai once revealed the details of the so - called ABC reform in his book "One Win, Nine Losses," including linking development plans with marketing activities, streamlining the number of factories from 140 to 40, and more intensively and quickly developing and producing best - selling products to avoid wasted inventory.

Uniqlo has always had an excellent inventory level in the fashion industry. According to Muji's second - quarter financial report for the 2021 fiscal year, inventory accounted for 26% of its total assets, while Uniqlo's was only 14%. Muji's inventory turnover rate (1.2%) also lagged behind Uniqlo's (1.7%).

After taking over, Nobuo Domae tried to replicate a similar logic and inject new operating concepts into Muji. He proposed the "Second Entrepreneurship Period" mid - term plan and established two key goals: one is to "meet daily needs," and the other is to "promote localization." For this purpose, he specifically established a "Regional Business Department" and required product design and marketing plans to be developed from the perspectives of consumers' daily lives and local culture. This means that Muji is no longer just a brand that "exports Japanese lifestyle," but has learned to grow locally.

Although Muji's official has not disclosed the steps and plans for the Chinese market, consumers can still feel some subtle changes when visiting the stores.

The most obvious change is the richer product selection, especially the significant expansion of high - frequency consumption categories. Food, tableware, personal care, and cleaning products have become the core categories. In the official strategic document, Muji clearly stated that it would "expand daily necessities and consumables," such as cleaning supplies, kitchen utensils, towels, and slippers, and would continuously improve the specifications and packaging based on user feedback. In essence, this idea is to drive customer flow through high - frequency replenishment and then achieve associated sales with medium - and high - priced household items.

Take food as an example. On Muji's shelves in China, in addition to the classic Japanese curry blocks and instant rice balls, there are also innovative products specially tailored to local tastes, such as golden soup sauerkraut beef noodles and Chongqing small - noodle konjac noodles.

During festivals, Muji also launches limited - edition snacks, such as Chinese date cakes for the Spring Festival or Japanese - style mooncakes for the Mid - Autumn Festival. These details not only enrich consumers' choices but also make the brand closer to daily life. Official data shows that currently, about 70% of Muji's daily sundries and food categories in the Chinese market are locally developed. Instead of simply copying Japanese recipes, they are re - created by combining local eating habits and supply - chain advantages.

Muji has also tried to strengthen this concept through physical retail innovation. In the past two years, the brand has successively tested the waters with farm concept stores and restaurants in Shanghai and Shenzhen. Although they were once questioned for their high prices, the underlying logic is to shorten the supply chain by directly purchasing local agricultural products and let consumers understand the value of "benefiting farmers." Consumers who are willing to identify with this value will regard consumption as a choice of lifestyle rather than just a price comparison.

With the expansion of food categories, the number of related tableware and kitchen utensils has also increased significantly. Some Xiaohongshu users said that Muji even makes detailed distinctions according to the types of stoves suitable for the tableware, reducing consumers' choice costs. This "educational retail" makes daily necessities no longer a cold display but a solution that consumers can quickly understand and purchase with confidence.

In flagship stores in Shanghai and Shenzhen, you can often see combined displays around the breakfast scenario: instant rice balls and oatmeal are placed on one side, accompanied by thermos cups, tableware, and seasonings. This design encourages customers to complete "one - stop shopping," which virtually increases the associated purchase rate. This "scenario - driven" store logic is becoming a hallmark of Muji stores.

From its heyday to the trough and then to the comeback, Muji's story in China tells us that for a middle - class brand to last, it must learn to continuously renew itself under market scrutiny. Today's young people are entering Muji stores again not just because of the "viral" coat but because they can find high - quality daily necessities here. These small but frequent daily choices form the brand's new growth logic.

As marketing guru Peter Drucker said, "The best way to predict the future is to create it."