MUJI set to enter cramped home furnishing sector

The nation's "lifestyle store" business is set to become even more crowded with MUJI (Taiwan) Corp (無印良品), a Taiwanese-Japanese venture, planning to open its first store in the Breeze Center (微風廣場) later this week, a company official said yesterday.

MUJI (Taiwan), set up with paid-in capital of NT$100 million, will inaugurate the store on Friday and plans to open a second outlet at the New York New York mall in Hsinyi district in early June, Kao Chin-yen (高清愿), chief executive officer of Uni-President Enterprise Group (統一集團), said at a press conference yesterday.

"By integrating the resources and sales experience of President Group and Breeze Center, MUJI aims to offer various kinds of merchandise to satisfy customers' needs in the home furnishings market," Kao said.

In September, President Chain Store Corp (統一超商), Taiwan's largest convenience store operator and a unit of Uni-President, formed a joint venture with Japan-based retail giant Ryohin Keikaku Co, owner of the Muji brand, in a bid to make inroads into the home furnishing market.

President Chain and Uni-President own 41 percent and 10 percent of the venture's shares respectively, while Ryohin Keikaku holds 39 percent and Mitsubishi Group the remaining 10 percent, according to Hsu Chung-jen (徐重仁), president of President Chain and chairman of MUJI Taiwan.

Hsu yesterday declined to offer a sales estimate for the first year, saying it was too early to predict. But general manager Tony Tsai (蔡篤昌) said in September last year that the company was hoping for NT$30 billion in annual sales by 2007.

Working House (生活工場), the nation's biggest home-furnishing chain with 140 outlets, said it welcomed the new competitor to "help expand the `lifestyle store' market" and said that the market still had potential for expansion.

Working House president Dennis Hsu (許宏榮) said the company wanted to increase the number of its stores to 200 by the end of the year to fend off the upcoming challenge from MUJI.

In the past year, Working House also opened 27 stores under its sister brand, Living Plus (幸運草), which targets young female customers.

Hsu said he believed the different merchandise structures and marketing focus would make the two easy to distinguish.

"Our competitive edge lies in favorable prices and an emphasis on stylish themes which alter on a seasonal basis," he said.

While Working House puts an emphasis on home furnishings, kitchenware and stationary, MUJI will also offer food and clothing, accounting for 5 percent and 45 percent respectively, along with general merchandise.

"The `simple, natural and quality' designs will help us carve a niche," said MUJI Taiwan's manager Tony Wang (王炳蘊).

Beryl Lee (李培芬), secretary general of Association of Chain and Franchise Promotion (連鎖加盟促進協會), disagreed.

"The lifestyle concept industry in Taiwan is saturated and competitive, but retailers can still partition their businesses by targeting micro-markets," Lee said.

Whether the merchandise introduced from abroad can fulfill local consumers' appetite will be the key to success, she added.