Muji Singapore wants to get bigger; bring in Renovation

Singapore

BY 2025, Muji fans in Singapore might be able to go to the Japanese retailer for a complete home transformation. When taking concepts such as Muji Renovation abroad, Singapore is the first destination in South-West Asia, said Satoru Matsuzaki, president and representative director of Muji owner Ryohin Keikaku.

Strong sales are cause for confidence and store footprint expansion is on the cards despite manpower challenge, he told The Business Times. Despite the local retail sector supposedly being on the downtrend, Muji Singapore's sales are rising steadily each year, he said. "We believe in the growth in the Singapore market."

Muji divides its Asia markets into East Asia - comprising China, Hong Kong, Taiwan, and South Korea - and South-West Asia. Singapore, as a mature market with a high standard of living, is the hub of the latter region.

Muji opened its first store here in 2003, and now has 11 local outlets. Its Plaza Singapura flagship marked a symbolic tipping point: with its opening in June 2017, there were more Muji outlets overseas than in Japan.

In 2015, the first Muji Cafe&Meal dining concept in South-West Asia and Oceania opened in Singapore, at Paragon. Speaking in Japanese, Mr Matsuzaki said: "I always want to bring new formats to Singapore first, develop it here, then bring it out to the region."

"Coming soon" for Singapore shoppers is the expansion of the Muji Walker active wear range, launched here in the 2018 Spring/Summer season and meant for light exercise.

"This is really a good match for Singapore," said Mr Matsuzaki, pointing to the island's year-long warm weather and ageing, health-conscious population. The average age of Muji Singapore customers is around 45.

More generally, Muji Singapore will keep expanding its range, narrowing the gap between the 7,000 items sold in Japan and the 4,000 here. Store size will have to grow from an average of 6,000 square feet to some 18,000 sq ft, said Mr Matsuzaki.

Further on, Muji hopes to bring its complete home renovation service here, with Muji Singapore managing director Naoki Kadoike aiming to do so by 2025. But for this, professionally trained staff are key.

Muji Singapore has five certified interior advisers who recommend how to combine Muji products in a room. The hope is to grow this team and build on this foundation for the eventual introduction of Muji Renovation.

Yet Muji is not immune from Singapore retailers' familiar headache: manpower shortage. Minor issues aside, manpower is the "biggest and only" challenge here, said Mr Kadoike. In the short term, interns from Taiwan help bridge the gap; in the long term, retaining and retraining staff is key.

For employees to "have a dream", the progression system - linked to professional sales certification - is important, said Mr Matsuzaki. "As employees acquire skillsets, they build self-confidence."

Muji is also establishing a global HR (human resources) system, aiming to make worldwide transfers possible by 2020, even at the outlet manager level.

That year is also when the first of two cuts to service sector foreign manpower quotas will kick in, a move that is expected to take a toll on Muji Singapore. Outlets are already running below required staffing levels, revealed Mr Kadoike, who took on his current role in January.

The situation is similar to what he saw in Japan around September 2017, when he was head of retail operations. But by diversifying staff and employing workers even if they were available for just a few hours each day, staff levels reached 100 per cent in May 2018 and have been maintained since. Singapore will also explore such an approach, he said.

Though Japan is said to be in recession, Muji achieved 24 consecutive months of year-on-year sales growth as of February, an achievement "barely any companies" in Japan's retail industry can claim, said Mr Matsuzaki. "The foundation of this success is really due to sufficient manpower."

In Singapore, Muji's fanbase continues to grow. In 2015, its rewards programme had 100,000 members; by end-2018, this doubled to 200,000. Just two months into 2019, membership has grown 30 per cent.

But popularity has its downsides, too. On Jan 25, Muji filed a claim against local retailer IUIGA in Singapore's High Court for trademark infringement and passing-off.

Muji is seeking a court order for IUIGA to stop its use of the Muji mark and its statements, as well as compensation for damages and loss.

Mr Matsuzaki stressed that the firm is not against free competition; it simply does not want customers to be misled. After all, Muji - whose name translates to "no brand" - has always focused not on selling a brand, but offering "a story of the manufacturing process, so that the consumer has the freedom to make decisions".

Even if competitors try to make similar products, they cannot make identical ones, he said. Other firms might want to "produce and sell as soon as possible", but Muji's culture is different: "We carefully select the product materials, we are always careful about eco-friendliness.

"Consumers also know how to choose."