'Cheonwon-ui Haengbok' Daiso, Becoming the Synonym for Household Goods [Hidden Industry Story]

Asung Daiso, a Leading Domestic Household Goods Company
Over 30,000 Product Types, 1,350 Stores Nationwide
Last Year's Sales Surpassed 2 Trillion Won...Popular for Affordable Products

Exterior view of a Daiso store. Photo by Yonhap News

[Asia Economy Reporter Kim Suwan] There is a brand known as the so-called '1000 won shop' that has captured consumers' hearts with its low prices. The protagonist is Daiso, known as Korea's first fixed-price shop. Daiso, which sold low-priced daily necessities for under 5,000 won, has established itself as a national store used by an average of one million people daily. Currently, it boasts sales of 2.2362 trillion won, annual product sales of 1 billion units, about 30,000 product types, and 1,350 stores nationwide. Starting from a mere 13-pyeong store, how did Daiso become a national brand?

From groceries, detergents, to stationery... Daiso approaches consumers with 'cost-effectiveness'

Daiso originally started in May 1997 when Park Jung-bu, a former salaryman and CEO of Aseong Daiso, opened a daily necessities store called 'Asco Even Plaza' in Cheonho-dong, Seoul. Starting with a 13-pyeong first store, Daiso introduced fixed-price sales offering daily necessities at reasonable prices. Despite the economic recession at the time that dampened consumer sentiment, it challenged the distribution industry with a groundbreaking price of 1,000 won.

CEO Park graduated from Hanyang University with a degree in Industrial Management Engineering and joined Poongwoo Industrial, which produced light bulbs in Guro Industrial Complex (now Guro Digital Complex). After working there for 15 years, he founded Hanil Manpower, a trading company that exported daily necessities worldwide to Japan.

In September 2001, Daiso Industrial in Japan requested an exclusive contract with Aseong HMP (formerly Hanil Manpower), and Aseong Daiso received investment from Daichou Industrial (Japan Daiso), changing its name to Daiso Aseong Industrial and opening Daiso stores in South Korea. In January 2018, the company name was changed to Aseong Daiso, marking the official start of domestic business.

After business expansion, Daiso releases about 600 new products monthly, maintaining price points at △500 won △1000 won △1500 won △2000 won △3000 won △5000 won. Notably, products priced under 2,000 won account for over 80%, competing with affordable prices.

'Cheap means poor quality' consumer skepticism dispelled... product diversification and quality improvement

Daiso store. Photo by Yonhap News

Daiso has become an indispensable brand in consumers' daily lives by selling over 30,000 products ranging from groceries, detergents, stationery, to various tableware. This success owes much to its operational principles of △high quality △low price △wide variety.

By adhering to principles such as over 50% of products priced at 1,000 won, over 50% domestic products, and not handling products over 5,000 won, Daiso has steadily grown since the foreign exchange crisis. Chairman Park has said the secret to Daiso's growth is "strictly maintaining the fixed-price shop model."

In response to consumers' doubts about "Are the products too cheap?", Daiso answered with quality. Daiso conducts rigorous quality and safety inspections on all items. It also operates a 'Customer Safety Task Force (TF) Team' to manage product safety systems and has introduced the 'Daiso Prosumer Monitoring System' to inspect store environments and product safety. Due to these efforts, Daiso received the 'Korea Product Safety Award' in 2015, jointly hosted by the Korea Product Safety Association and the Ministry of Trade, Industry and Energy's National Institute of Technology and Standards.

Daiso's growth factors do not end there. To enhance quality competitiveness, it reduced the proportion of Chinese imported products, which once accounted for over half, to 30%, while increasing domestic products to 70% over the past decade.

Daiso's signature products also played a role. The cosmetic puff, nicknamed 'Ddong Puff,' once caused a sold-out frenzy and gained popularity. Currently, Daiso collaborates with brands to offer various products, approaching the public. Each season, it releases trendy series with designs featuring various characters on stationery such as pens and notebooks, as well as school supplies like compass sets and jump ropes, stimulating purchase desire.

Various social contribution activities including Dokdo sponsorship and support for marginalized groups

The person in charge of social contribution at Daiso (left) and Hong Won-pyo, head of the Korea Social Welfare Association (right), are taking a commemorative photo after promising to sponsor the Happiness Box. Photo by Asung Daiso

Daiso continues active social contribution activities. Since 2014, Daiso has signed an agreement with the Dokdo Love Movement Headquarters to support the Dokdo Love Movement and social contributions. In 2017, at the Dokdo Enlightenment event held at Susaek Station Square by the Korea Dokdo Love Association, Daiso held a Dokdo Love bazaar and donated all proceeds.

Daiso also runs an annual Happiness Box support project for marginalized groups. Since 2010, Daiso has consistently carried out the 'Happiness Box' support project every year. The Happiness Boxes are delivered to multicultural families, elderly living alone, and low-income single-parent youth families through local governments and various institutions. These boxes contain about 30 daily necessities such as bathroom slippers, spoon sets, tableware, and kitchen utensils. This leverages Daiso's strength of holding over 30,000 types of daily necessities-related products.

Daiso also supports multicultural families who have difficulty adapting due to linguistic and cultural differences. To empathize with and comfort difficulties arising from cultural differences, Daiso sponsored the multicultural family Chuseok event called 'Da (多) Eoulim Hanmadang Festival.' Proceeds from selling Daiso products at the bazaar were also donated to multicultural families.

Focus on strengthening consumer choice through store enlargement

Starting in 2017 with a large 700-pyeong store on the basement first floor of Gangnam Express Bus Terminal Station, Daiso has been promoting store enlargement. The goal is to increase product variety to strengthen consumer choice and provide a pleasant shopping environment. These efforts greatly contributed to increasing sales by 71% (from 1.3056 trillion won to 2.2362 trillion won) over the past three years (2016?2019).

In fact, Daiso surpassed 2 trillion won in sales last year, continuing its upward trend. Daiso announced sales of 2.2362 trillion won and operating profit of 76.7 billion won last year. This is just four years after surpassing 1 trillion won in 2015. Daiso attributes this to the rise in demand for cost-effective (performance relative to price) products as polarization and rational consumption patterns have taken hold.

This content was produced with the assistance of AI translation services.