Muji makes fashion pact

Joint venture goal to speed expansion

Muji of Japan took up a joint venture with Central Department Store (CDS) to speed up its growth in Thailand amid fierce competition in the fashion business.

The Muji store housed in its new partner Central’s mall at its Silom Complex.

Muji (Thailand) Co was recently set up with registered capital of 200 million to operate in Thailand. CDS changed its status from distributor to business partner, holding a 51% stake in the joint venture, while 49% belongs to Muji Japan.

"Thailand is one of the most important markets for Muji, ranking sixth in Asia. We're very happy with the performance of Muji Thailand the past six years, which is under the distribution of CDS," said Yukinori Katagi, managing director of Muji (Thailand).

Thailand is the third country in which Muji has used a joint venture after South Korea and Taiwan.

The entry of new fashion brands such as H&M and Uniqlo have tightened marketplace competition, which led to the joint venture decision.

Muji is expanding internationally via three methods: setting up its own subsidiaries, appointing local distributing firms and setting up joint ventures.

The joint venture with CDS is expected to lower operation costs and speed up its expansion. Muji Thailand will receive support from CDS and Muji Japan.

It can directly contact Muji suppliers, so some Muji product prices in Thailand will fall by up to 30%.

Starting from Aug 15, the price of about 300 garments and 400 household items such as suitcases, bags, shoes, scarves, beds and bedding at all Muji stores in Thailand will drop at least 25%. After seeing customer feedback, the company will consider lowering the price for more items.

Some Muji products in Thailand should be cheaper than those available in Singapore, and could be on par with those sold in Japan.

"We want to convey to Thais that Muji is a brand that is affordable and can be used every day," he said.

A logistics improvement should help Muji cut prices and ensure new collections make it to market faster.

Muji Thailand will soon add food products to its Thai portfolio.

It also plans to renovate existing stores next year to have the same images as Muji in Japan.

At least two new local Muji stores will be opened every year for an average growth of 10%. The 12th branch will open in Chiang Mai at Central Shopping complex this November.

"Uniqlo and H&M are our competitors, but nobody offers such a wide product range, from apparel and cosmetics to stationery, kitchen appliances and bedding like we do," he said.

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Writer: Pitsinee Jitpleecheep
Position: Business Reporter