Muji: The Brand With a No-Brand Strategy
Understanding the business model of a truly unique company
The idea of a company not branding itself seems contradictory. In a world where brands allocate millions on marketing, it’s rare to find a company with a single-minded focus on the product at hand. That’s what makes Muji, short for Mujirushi Ryohin, meaning “no-brand, quality goods,” stand out among the rest.
The Japanese company sells conventional items such as household goods and apparel, but unlike most brands, Muji doesn’t want consumers to feel an urge to buy their products. Instead, as they put it:
Muji’s goal is to give customers a rational satisfaction, expressed not with, “This is what I really want” but with “This will do.” “This is what I really want” expresses both faint egoism and discord, while “This will do” expresses conciliatory reasoning.
To most marketers, this philosophy may seem outright bizarre. But Muji’s success suggests it’s a refreshing alternative. So how did they go about creating a truly unique company? What is their business model? And perhaps most importantly, what are the secrets behind Muji’s success?
The Beginnings
Dubbed the Japanese economic miracle, the decades following WWII were incredibly prosperous for the country as they rapidly emerged to become the world’s second-largest economy (currently sitting in third). As a result, most Japanese brands inflated marketing budgets, prices, and luxury offerings — often to the detriment of product quality.
In light of these events, Muji identified a gap in the market for unlabeled, cheap, quality goods. The company was founded in 1980 and began its operations within Seiyu, a supermarket chain in Japan. By 1983, Muji opened its first independent store after outgrowing the supermarket chain and soon found itself expanding overseas.
Muji has since grown into an industry-leading brand with a presence in over 30 countries, 700 stores, and a market valuation nearing $6 billion.
Business Model
In order to remain profitable while offering affordable, quality goods, Muji created three principles in the production process that have been fundamental to its ongoing success.
1. Selection of materials
Quality is of the utmost importance for the brand. As such, material selection is a balancing act between price and value. The quest for the right materials takes them worldwide, with Muji often finding bargains by acquiring discarded materials in bulk before refurbishing them in-house.
2. Streamlining processes
Muji has optimized its production to reduce waste, time, and costs. By using natural materials, the brand avoids additional charges for bleaching or painting jobs. Not only is this cost-saving, but from a customer’s perspective, this results in a store with a refreshing display of natural colors. Even for defective products that don’t meet certain standards, they turn into discounted items in order to eliminate waste and reduce costs.
3. Simplification of packaging
When it comes to packaging products, the brand keeps it at a bare minimum. There’s no attempt to adorn items using fine-packaging, pamphlets, or advertisements, which are costly and often detract from the shopping experience. Typically, Muji products are shown plainly, displaying only product-related information. Using this approach, the brand is able to cut costs while making the shopping experience more transparent for the customer.
All of these principles are embodied in their corporate vision, “be natural without name, be simple and be earthly.”
Minimal Advertising
As strange as it might sound, Muji doesn’t really advertise. Yet it’s probably among the better-known brands in the world.
While they don’t invest in TV ads, press, or radio, they do have a strong presence on social media. Unlike traditional advertising routes, social media provides Muji with valuable analytics through clicks, likes, and comments — all of which the brand considers when designing new products from the end user’s point of view.
Store Location
Muji’s lack of advertising is offset by investing in prime store locations. Simply put, if your store is located on the main street of a metropolitan city, the daily views it gets is “free” advertising. Unlike a digital ad that has a limited lifespan, a physical store in a prized location is a permanent source of guaranteed traffic.
The brand currently has stores in prime shopping streets across the globe such as Fifth Avenue in New York, Oxford Street in London, and Ginza in Tokyo.
As for the in-store experience, the natural colors, the low volume music, and the minimal decoration all add to a stress-reducing customer experience.
Top Takeaways
- Find your niche. Even something as bizarre as a no-brand strategy has tapped into the wallets of millions of consumers across the globe.
- Be resourceful. For Muji, that’s a key part of their competitive advantage, which then allows customers to acquire their goods for cheap.
- When it comes to marketing, among the best investments you can make is a store in a prime location.
Not many brands dare to have customers exclusively focus on their product, and that’s what makes Muji so special.
