After a journey to East Asia, I have a much better understanding of the iconic Japanese brand Muji.
Recommendations for future strategy:
As there are many areas that need to be improved, Muji would be well-advised to consider the following strategies carefully.
The first strategy to consider is to shift production from Japan and China to other Asian countries such as India, the Philippines, Vietnam and Indonesia where salaries are significantly lower (Lung 2020). This strategy is recommended because Muji has to learn from their own mistakes. Clearly, this is the learning / ‘emergent’ approach which comes from trial and error. Obviously, Japan is a developed country which is also known as the western country in the east – workers’ salaries are quite high in Japan. As a result, if most of Muji’s products are actually made in Japan, the cost would be too high. In terms of China, it can be seen that China is a thriving economy and its citizens enjoy higher salaries nowadays. Indeed, compared to the amount of money that the average Chinese worker made decades ago, the modern Chinese worker makes a much higher income today. That is exactly why many factories have left China and have been moved to other countries in Southeast Asia where workers’ salaries are much lower.
The second strategy is localization. Muji’s stores in America and Europe have been struggling for quite a while (Lung 2020). Interestingly, Muji’s stores in Asia are performing better. Thus, it is clear that this brand is not properly localized in western countries where the culture is very different from the eastern culture. Also, Muji has to optimize its logistics in western countries. More exactly, Muji’s stores are located in very expensive venues because this brand would like to occupy prime locations in big cities in western countries. Sadly, Muji’s products do not even match its expensive location, for the majority of its goods are relatively low-value products such as stationery, apparel and homewares. Without a large number of customers every day, a big expensive store cannot generate enough profits. At the same time, most stores in prime locations in big cities in western countries sell expensive and high-end products because these stores are luxury, upmarket retailers (Sato 2010). Thus, these locations do not attract the right target market that Muji would like to have. Unlike Asian people who would go to prime locations to buy cheap products, westerners expect upscale products at prime locations. Therefore, changing its stores’ locations in western countries should be a priority for Muji to consider if this brand is looking to localize its image and operations.
E-commerce is the future of any brand.
Muji should implement is an e-commerce strategy. As a niche brand which relies on existing customers to spread the message via word of mouth, Muji’s online presence is not big enough. Hence, Muji should start to run search engine ads and social media ads. What’s more, Muji needs to renovate its official website by making it mobile responsive and user-friendly. Another tactic is Search Engine Optimization (SEO) which could potentially help Muji to become a big online store organically. Indeed, when a website is SEO-optimized, organic traffic can find this e-commerce store quickly because the site would appear at the top of Google search results. That means Muji needs to hire an SEO specialist who can identify keywords that people are already looking for on Google and then add those keywords to its web-pages as soon as possible.
“After coming back from my journey to East Asia, I’ve realized that e-commerce is a must for almost every brand in modern-day society because it’s not optional – every brand needs an online presence!”