Introduction:
MUJI, once a wildly popular Japanese brand in the Chinese market, saw its sales in China decline for the first time in 2018. Just when the market began sensing fatigue, the company returned to growth in 2022. MUJI China’s revenue growth for fiscal years 2022–2024 reached 9.6%, 22.4%, and 11.5% respectively. From September to December 2024, same-store sales recorded year-on-year growth for four consecutive months. From September 2023 to August 2024, MUJI China’s revenue reached RMB 5.5 billion (approximately USD 760 million), accounting for nearly 20% of the company’s global revenue. So, how did MUJI achieve a sales rebound in the Chinese market?
Reason 1: Accelerated Expansion Through Omnichannel Strategy
MUJI accelerated its expansion via omnichannel development, achieving coordinated growth across physical stores and online retail. After 2022, MUJI added an average of 40 new stores per year, compared to just 25 annually before that. In May and June 2024 alone, MUJI opened 17 new stores across over a dozen cities in China including Wuhan, Hefei, and Dongguan. While establishing a presence in core commercial areas of tier-1 and tier-2 cities, MUJI also penetrated tier-3 cities, capturing growth through market downshifting. As of August 2024, MUJI had over 400 stores in China. By increasing store numbers, MUJI aims to boost brand exposure and attract more potential consumers, thereby increasing sales and offsetting per-store performance declines.
In addition to store quantity growth, MUJI also innovated its store formats, launching concepts such as fashion and cosmetics specialty stores, and small-format lifestyle goods stores branded as “MUJI 500.” Around 70% of the products sold in these stores are daily consumables priced at around RMB 23 (approximately USD 3.20). With an average size of just 330 square meters—one-sixth of a standard MUJI store—these outlets are placed in high-footfall areas.
On the online retail front, MUJI joined instant retail platforms, with 90% of its stores integrated with food delivery platforms, offering 30-minute delivery services. This covers over 4,000 SKUs, including household, daily necessities, office supplies, kitchenware, apparel, shoes and bags, and beauty and skincare products. Data shows that one week after launching its partnership with Meituan Flash Delivery in June 2022, MUJI’s order volume increased by 68 times, and the average order value rose to 1.5 times that of offline transactions. Orders placed from beyond 3 kilometers accounted for nearly 45%, and late-night orders nearly 15%. This helped MUJI overcome time and space limitations associated with offline operations. By 2024, MUJI’s overall online sales grew by 18.9% year-on-year.
Reason 2: Deep Localization Strategy Implementation
MUJI has deeply penetrated the Chinese market through a multi-dimensional localization strategy, implemented across three main levels.
First, product development is precisely tailored to meet local demand. Since establishing its only overseas local product development team in 2019, MUJI has launched differentiated product categories for Chinese consumption scenarios. The localization rate for household goods and food has reached 70%. For example, to meet the sizing needs of Chinese households, MUJI redesigned its bedding in 2019 to include 1.5-meter and 1.8-meter standard options, solving early “localization mismatch” issues. The company also developed new categories in response to consumer trends, such as mobile phone accessories, pet supplies, and camping gear—these localized products have become a core driver of sales growth.
Second, supply chain efficiency has improved significantly. Through a full industrial chain layout of “Made in China, Sold in China,” MUJI has drastically reduced costs. By 2024, half of MUJI’s products in China adopted local designs or materials, with some categories seeing cost reductions of 30% compared to imported models. For example, slipper prices dropped from RMB 99 in 2015 to RMB 30–50 in 2024—a price reduction of over 50%. Supply chain optimization includes increasing order volume from Chinese factories, streamlining supplier counts to improve bargaining power, and establishing a closed-loop system from design to sales, with notable reductions in tariffs and logistics costs. Company insiders revealed that the localization rate for household goods and food has reached 70%, directly boosting price competitiveness.
Third, the price structure has reshaped consumers’ perception of value-for-money. Through its “new pricing” strategy, MUJI has executed over 11 cumulative rounds of price cuts. Combined with the low-price “MUJI 500” format, MUJI has successfully pushed its price range downward. In 2025, the company plans to launch more “MUJI 500” stores where 70% of the products are priced under RMB 23 (roughly 500 yen), targeting consumers who visit weekly. This “high cost-performance + high-frequency consumption” model directly benchmarks local Chinese brands such as NetEase Yanxuan and Xiaomi Youpin. According to MUJI’s 2024 financial report, revenue from China reached RMB 5.5 billion (USD ~760 million), accounting for 18% of its global revenue.
Ongoing Challenges: MUJI Still Faces Multiple Obstacles in China
First, despite multiple price cuts, MUJI’s products are still priced 25–30% higher than in Japan, rendering them uncompetitive when squeezed between e-commerce white-label goods and local budget brands.
Second, its minimalist design philosophy is easily copied, leading to a flood of counterfeits on e-commerce platforms, diluting brand identity.
Third, frequent price-cutting strategies have trapped MUJI in a positioning dilemma: “not premium enough for high-end, not cheap enough for budget,” thereby weakening its original image as a symbol of quality living.
In addition, MUJI’s long-standing trademark dispute with Beijing Cottonfield has persisted for over 20 years. Search results on online platforms are cluttered with counterfeit stores, undermining brand visibility and consumer trust.
Finally, product innovation has been sluggish, further exacerbating the loss of market share.
[Disclaimer]: The above content reflects analysis of publicly available information, expert insights, and BCC research. It does not constitute investment advice. BCC is not responsible for any losses resulting from reliance on the views expressed herein. Investors should exercise caution.