
History of Muji
Muji was established in 1980 as a private brand of The Seiyu, Ltd. At first, the brand comprised 40 items only, including soy sauce, coffee, washing powder and toothbrushes. There was no dedicated display area and Muji items stood on the shelf alongside those of other manufacturers. However, in 1983, once the first direct sales outlet was opened in Aoyama, Muji experienced an explosion in its popularity. The range of designs, described as minimalist, pursued a no-frills concept. When these were brought together in one store, Muji was able to advertise a certain aesthetic appeal and show to consumers a world half a step ahead of the times.

In 1989, the brand became independent under the name Ryohin Keikaku Co., Ltd., and in 1991 the company set up an overseas operation. As of the end of February 2006, the combined number of directly managed retail outlets and licensed retailers was 298 in Japan and 51 overseas, with the number of product lines at around 7,000. Muji boasts a product range unparalleled even in world terms, and unique designs that extend into the realm of lifestyle solutions. Seen from the perspective of the consumer, Muji, which has retained the no-brand stance it began with, is seen as one of the great popular brands.
Muji’s founding concept
‘Low-priced for a reason’
Before the birth of Muji, from the second half of the 1960s, supermarkets began competing in the development of private brands. First on the market were products planned on the basis of a corporate-oriented logic of securing a large profit margin. However, after the amount of waste involved in canned mushrooms was pointed out at a monitor meeting held to listen to housewives’ opinions, the idea was formed to create a brand based on a consumer-oriented logic and perspective, which would genuinely benefit ordinary people. The result was Muji.
At the time of its establishment, Muji’s main promotional phrase was ‘Low-priced for a reason’. The ‘reason’ refers to the rethinking of materials, slimming down of the production process, and simplification of packaging. With the aim of producing items of the same quality at a lower cost, low prices were achieved by ‘eliminating waste and focusing on the product’s original function’. At a time when no-brand products were considered ‘cheap in price and cheap in quality’, the bold step was taken of labeling the goods ‘mujirushi’ (‘no brand’ in Japanese), but adding beneath this the words ‘ryohin (quality goods)’. In another bold move for an age with a ubiquity of foreign words in katakana script, the name was written in traditional Chinese characters. During a period when the whole of Japan was puffed up on the bubble economy, the company presented the world with environment-conscious products and packaging. These clearly taken positions and the appealing design won Muji the positive reception and support of a broad mass of the population.
Background to rebranding
Since the establishment of its first outlet, Muji advanced on an ongoing upward curve. Because its products were different in character to those hyped in Japan’s economic bubble of the 1980s, it was not affected by the economic stagnation of the 1990s. However, its business performance took a sharp turn for the worse in fiscal 2001. A major factor was the emergence of clothing retailers and 100-yen shops that made low prices a selling point, because of which consumers looking for low prices had begun to drift away. Some 20 years after its inception, amid a period of change, strains had begun to show in the Muji operation. The time had come to review the pattern it had followed so far.
Operational reform and subsequent recovery
To recover from its stagnation, a fundamental review of its operations was essential. Put simply, the transition to a form of operation that was ‘not dependent on culture and aesthetic sense alone’ was required. Cost reduction was pursued by making maximum use of the detailed methodological theory it had gained from experience. This meant for instance closing low profit retail outlets, applying independent criteria to the opening of new stores, and formulating appropriate rules and structures for inventory management and retail store operations. Based on a clear logic, the company established a framework for the thorough-going streamlining of its operations.
Through such operational reform, together with enhanced product strength by improvement of product completeness, Ryohin Keikaku achieved a dramatic recovery, securing a record profit in fiscal 2005.
