#10. MUJI's 20 Years of Survival in Korea

1. The Story of MUJI: The Origin of Minimalism

MUJI is a lifestyle brand from Japan that now sells over 7,000 items, including clothes, food, furniture, and appliances. The name "MUJI" (Mujirushi Ryohin) literally means "No-Brand Quality Goods." 

They rejected the culture of buying expensive items just to show off big logos. Instead, they decided to focus on the true value and purpose of the product itself.

MUJI started in 1980, when Japan’s economy was booming and flashy luxury brands were popular. Despite this trend, they have kept their philosophy of "emptiness" for over 40 years. As the pioneer of modern "minimalism," MUJI continues to inspire countless brands today.

2. 20 Years in Korea: Sticking to Core Values in Crisis

MUJI entered the Korean market in 2004 by establishing "MUJI Korea" with Lotte International. MUJI owned 60% of the shares, while Lotte owned 40%. MUJI provided the brand and operational know-how, and Lotte handled store locations, logistics, and marketing. This structure shows that MUJI considered the Korean market very important from the very beginning.

However, the journey over the last 20 years was not smooth. MUJI faced initial rejection due to high prices, followed by massive financial losses from the COVID-19 pandemic and the "No Japan" boycott. On top of that, they had to survive fierce competition from local rivals backed by major Korean conglomerates.

What is surprising is that MUJI did not lose its focus during these crises. Instead, they went back to the basics and strengthened their internal foundation. Just like the saying, "The ground hardens after rain," they grew even faster after overcoming these difficulties.

Phase 1 (2004–2012): The Settlement Period

"The Gap Between Philosophy and Reality"

MUJI’s entry into Korea created a lot of buzz. Thanks to the philosophy of famous designer Kenya Hara, the brand became very popular among designers and trendsetters. Using MUJI products was seen as a sign of "sophisticated taste," and the brand became famous quickly.

However, high popularity did not lead to good sales results immediately. The biggest barrier was the price. In Japan, MUJI was known for affordable daily necessities. But in Korea, products were 1.5 to 2 times more expensive due to logistics costs and tariffs.

Even customers who visited the stores because they liked the brand philosophy were disappointed. They complained, "You claimed to remove the unnecessary extras (bubbles), but the price itself is a bubble." Because of this price issue, MUJI struggled to become a mass-market brand during this period.

Phase 2 (2013–2018): The Growth Period

"Breakthrough Through Structural Change, Not Quick Fixes"

Starting in 2013, MUJI made bold changes to its fundamental business structure.

First, they fixed the price issue by changing their logistics system. Previously, products made in factories (like in China) were sent to Japan first, and then shipped to Korea. MUJI changed this to ship products directly from factories to Korea, skipping the stop in Japan. This saved shipping costs, allowing them to lower prices on over 670 items by up to 35%. Finally, the prices met the expectations of Korean consumers.

Second, they made the brand more accessible. Previously, MUJI relied heavily on Lotte’s distribution network. To reach more people, they invested in new channels.

• Flagship Store: They opened a massive store in Gangnam, displaying over 2,400 items.

• New Channels: They entered Hyundai Department Store (Lotte's main competitor) and launched an official online store.

Instead of flash sales or celebrity ads, they focused on the basics: "Good Prices" and "Direct Experience." The result was a huge success. By 2018, sales reached 130 billion KRW(approx. $93 million).

However, unexpected external crises were waiting for them just around the corner.

Phase 3 (2019–2022): The Period of Hardship

"Facing a Triple Crisis for Survival"

Starting in 2019, MUJI faced three major disasters at the same time, putting their survival at risk.

1. The "No Japan" Boycott. They were hit hard by the boycott movement caused by diplomatic tension between Korea and Japan. MUJI was targeted as a representative Japanese brand. Even loyal customers stopped visiting, and lists of "alternative brands" spread rapidly online. This caused not only a huge drop in sales but also deep damage to their brand image.

2. Rise of Local Rivals (JAJU). Shinsegae (Lotte's competitor)'s lifestyle brand, JAJU, had often been criticized as a "copycat" for having designs and packaging very similar to MUJI. However, during the boycott, JAJU became the perfect substitute. They took this opportunity to grow rapidly, increasing their store count from 174 to 256 within just 3 years (up nearly 50%).

3. The COVID-19 Pandemic. While the boycott was still hurting them, COVID-19 hit the world in 2020. MUJI’s strategy relied on large stores where customers could touch and experience products. Social distancing turned this strength into a weakness. Sales plummeted, but high fixed costs like rent and labor remained, forcing MUJI into a long tunnel of financial deficits.

Phase 4 (2023–Present): The Rebound

"Revitalizing Through Brand Experience"

After facing a crisis, MUJI went back to the drawing board to rethink its essence. In 2021, the headquarters declared a "Second Founding" and created a new long-term plan. They also changed their Korean partner from "Lotte International" to "Lotte Shopping" to strengthen local marketing. Their new initiatives can be summarized into three key strategies.

1. "Mega-Store Strategy" - Overwhelming Experience. MUJI Korea shifted its focus from small shop-in-shops to massive standalone stores. In 2023, they opened their largest store in Korea at Starfield Goyang (approx. 3,150 sqm). These large stores are designed to offer "experiences" that online shopping cannot provide. They transformed the store from a simple sales space into a lifestyle platform.

2. "Localization" - Blending into Korea. Their goal was to become "a brand helpful to the local region." They strengthened the "Found MUJI" project to discover local Korean ingredients and producers. A great example is the "Perilla Oil Makguksu" meal kit, made with ingredients from Gangwon Province. Unlike the past, where they simply imported Japanese products, collaborating with local producers helped close the psychological distance with Korean consumers.

3. "Community" - Growing with Locals. They redefined their stores as community centers, not just commercial spaces. Through "Open MUJI," they host exhibitions and workshops. They also regularly run the "Connecting Market," where small business owners and farmers meet consumers directly. For instance, the 116th market held in February 2025 introduced 11 local brands from Tongyeong City to consumers in Seoul. These activities turned MUJI stores into a "neighborhood gathering place."

Thanks to these efforts, MUJI achieved record-breaking results in 2025:

• Sales: Over 200 billion KRW (approx. $143 million)

• Operating Profit: Over 10 billion KRW (approx. $7 million)
  
  

Recognizing this potential, Lotte Shopping recently decided to invest an additional 20 billion KRW (approx. $14 million), showing strong confidence in MUJI’s future growth despite the tough market conditions.