I still have the CD drawers I bought 20 years’ ago in Japan from a Muji shop (known in Japan by its full name, Mujirushi Ryohin – No Brand Quality Goods and the actual company name – Ryohin Keikaku – Quality Goods Planning) and the majority of my office stationery is from Muji’s UK outlets, because I prefer their plain, clean, neutral look.
It seems I am not alone in being a Muji fan outside Japan, as Muji has expanded in the 24 years since it first ventured overseas to 301 shops in 26 countries and has reached a record level of overseas sales at the end of 2015, opening a flagship store on Fifth Avenue in New York in October of that year.
The former chairman of Muji, Tadamitsu Matsui, has been credited with turning Muji round, and, in an interview with Toyo Keizai, explains two factors for overseas success.
Muji made many mistakes overseas, says Matsui and “some mistakes you have to learn to recognise by making them yourself rather than being told what not to do”.
- There are only local markets
People assume that you have to communicate globally to a global market but actually most successful companies know that “when in Rome, behave as the Romans” Matsui points out. When Muji started out in Kuwait, they brought their locally hired staff to the Muji shop in Yurakucho, Tokyo, and asked their opinions. (To me, that is another success factor – bringing employees to Japan and actually asking for their input). It turned out that Muji’s single beds were unlikely to sell in their opinion, as most Kuwaitis had large houses and large rooms, so even a single bedroom would have a king size bed.
A long standing best seller for Muji in Europe is the miniature screw driver set. Japanese are often surprised that most European households have toolboxes with proper tools, as DIY is much more common across Europe compared to Japan. Muji found that their screwdriver kit sells particularly well to women who want to do odd jobs around the house by themselves, and like the compactness but good quality of Muji’s tools.
2. Always make cost a priority
Matsui is particularly hot on keeping an eye on rent and leases. Location is important – you have to be in Milan or Rome or Paris or London if you want to be in Europe, but you have to be aware of where your brand sits in terms of prestige. Rather than go for the prime spot in a prime location that Louis Vuitton or similar might pick, Muji goes for the 2nd or 3rd tier spot. In Hong Kong, Muji is on the 4th floor of a building where the 1st floor is occupied by Prada. Indeed, I noticed that in London, they are in Oxford Street, but at the Marble Arch end, not right in the centre. Opposite them is Uniqlo, which I assume is not a coincidence.
“London is a landlord’s market” says Matsui, “20-25 year leases are normal and it is impossible to break the lease…You cannot assume you will be loved for decades in London. The business changes and so you have to think about contingencies for when things are not going so well when you sign a lease.”
Apparently Muji tries to keep rent to around 15% of the sales of the outlet. That way a new shop usually breaks even after about a year and a half.
“I don’t think the fundamentals of business change that much from Japan to the rest of the world” says Matsui. “Know the basics, and then set up the framework accordingly”. “There is a standard method which can work for any business, but you have to keep plugging away at it and not give up, even if it takes time.”
For more content like this, subscribe to the free Rudlin Consulting Newsletter. 最新の在欧日系企業の状況については無料の月刊Rudlin Consulting ニューズレターにご登録ください。
