Consumers shop for clothes at a Muji store in Hangzhou, East China's Zhejiang Province on January 18. (Photo: VCG)

Japan's fast-moving consumer goods brand Muji has lost some of its lure for Chinese customers due to rising competition and souring consumer sentiment toward Japanese brands after Japan issued a ban on Huawei.

Muji, a proprietary brand affiliated with Japan-based Seiyu GK Group, has reportedly cut prices on some apparel products and aroma diffusers in its store on Tmall, a Chinese online retail platform owned by Alibaba Group. It was the 10th price cut in five years, reported the Beijing News on Saturday. 

Muji's revenue growth has been slowing in China. In the third quarter of 2018 fiscal year, which ends this month, operating revenue growth in China slowed to 110.8 percent from 121.2 percent a year earlier.  

Slower revenue growth came as the firm is facing rising competition in China. 

"Those brands have excess capacity in Japan due to the aging population, and they're banking on the Chinese market to generate profit," Chen Zilei, director of the Research Center for Japanese Economics at the Shanghai University of International Business and Economics told the Global Times on Monday. 

As more Chinese companies provide products with better quality and lower costs, Japanese brands have to change their pricing strategy to make smaller profits amid quicker turnover, Chen added.

Also, Japan's ban on Chinese telecom firm Huawei does not help its companies in China.

The Japanese government banned its central government ministries and the military from purchasing Huawei and ZTE equipment on December 10, citing cybersecurity and data concerns. 

The Japanese government has also continued to treat Huawei unfairly by giving its companies hints to not pick Huawei during 5G tendering process next week, a source close to the matter told the Global Times.

Japan and India also agreed on Monday to work together on 5G technology, the Straits Times reported.

Japan's attitude toward Huawei has sparked discontent among Chinese netizens and has cast doubt on the bilateral relationship, which has been warming up in recent months since a visit by Japanese Prime Minister Shinzo Abe to Beijing in October 2018, analysts said.

To Chinese people, Huawei is a source of national pride. It has happened before - Chinese consumers rejected Japanese products due to patriotic sentiment, said Bai Ming, deputy director of the Ministry of Commerce's International Market Research Institute. 

"Last time I bought from Muji was in May, and then I stopped buying from it," said a Beijing resident surnamed Li, adding that "Chinese brands provide similar products, but better prices."