Japan’s Muji eyes entry into single-brand retail market

Japan’s Ryohin Keikaku Co, which operates household goods chain under the brand name Muji, has filed an application with the department of industrial policy and promotion (DIPP) to enter the country under the single brand retail route. The company proposes to “manufacture and sell various garments, furniture, household goods, cosmetics, stationery and other Muji brands” says the application.

Muji has over 700 stores across Japan, Asia, Europe, the US and Australia. Outside Japan, China is the largest international market for Muji where it has over 100 stores. Recently, Nike applied to the DIPP for a second time, proposing to open fully-owned stores following the clarification. According to existing foreign investment policy, 100 percent FDI is allowed in the single-brand retail segment — 49 percent on automatic route and beyond that through the Foreign Investment Promotion Board (FIPB).

Several investment proposals including that of H&M, Swarovski, Tommy Hilfiger and Adidas were stuck because the government did not allow them to run both company-owned as well as franchise retail outlets. However, now the government has softened its stand and these brands be able to operate through both channels.

Earlier this year, Muji had announced a joint venture with Reliance Brands to open standalone stores across major cities and sell a range of products like clothing for men and women, beauty items, furniture, kitchen tools, and stationary. According to the agreement, Ryohin Keikaku, parent company of Muji, will invest a majority share in the joint venture.