"Daiso, the store for everyone, has always cherished the value of 1,000 won and upheld the spirit of fixed pricing." Chairman Park Jungbu of A-Sung Daiso

How did Daiso, which opened the first fixed-price household goods store in Korea in 1997, grow into a “store for everyone” and also become a must-visit shopping destination for tourists?

In an environment of high inflation and low growth, consumers are reluctant to spend on anything other than essentials like food, and even then, they prefer to switch to products with outstanding value for money. In Japan, which inspired the founding of Daiso, 100-yen shops alone enjoyed a boom during the prolonged recession in the late 1990s.

Chairman Park Jungbu's management philosophy of creating Daiso as a store where 1,000 won is treated with respect perfectly matched the economic climate in Korea, where consumer sentiment was shrinking due to high inflation, and laid the foundation for rapid growth. The principle of selling only products with the best value for money?not just cheap products?became a powerful differentiator. In his autobiography, Chairman Park explains that while other stores sold clearance items, Daiso survived among the many 1,000-won shops because it offered high-quality products through cash payments and bulk orders.

Unlike general retailers who set prices by adding a margin to the cost, Daiso first determines six fixed price points?500 won, 1,000 won, 1,500 won, 2,000 won, 3,000 won, and 5,000 won?where consumers can feel the value for money, and then develops products to fit those prices. As a result, Daiso has been breaking its own performance records every year. In 2023, sales reached 3.4605 trillion won and operating profit was 261.7 billion won, up 17% and 9% respectively from the previous year. The operating profit margin was 7.56%, a strong performance compared to the 1% margin of the three major hypermarket chains during the same period. Daiso is expected to surpass 4 trillion won in annual sales in 2024.

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As more consumers seek value-for-money products, Daiso is expanding its product categories and aggressively increasing the number of stores. Starting from the 24th, Daiso will launch health functional foods such as lutein and omega-3, in addition to the quasi-drugs it already sells, all in line with its fixed-price policy. This marks Daiso’s first full-scale entry into the health supplement market beyond quasi-drugs.

The scale and number of stores are also expanding aggressively. Daiso increased its number of stores from 1,361 in 2019 to 1,519 in 2023. This contrasts with other retailers such as supermarkets and convenience stores, which are reducing offline stores in response to online shopping trends. Daiso is also opening mega stores. The Pocheon Songuri branch, which opened at the end of December last year, is a stand-alone Daiso store built on the site of a former 790-pyeong hypermarket, showcasing all Daiso cosmetics and camping goods by brand.

Daiso AirPods that are sold out due to high demand.

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As Daiso expands into beauty and health as well as household goods, major hypermarkets are now competing to host Daiso stores. In April last year, Daiso opened a 790-pyeong store in Homeplus Sangbong, Seoul, followed by its largest stores in Emart Uiwang, Gyeonggi (830 pyeong), and Lotte Mart Gimhae (about 780 pyeong) in August. At the end of last year, Daiso also took over a 1,320-square-meter (400-pyeong) space?the second largest among tenants?at the Busan Premium Outlet operated by Shinsegae Simon.

Daiso has rapidly emerged as an anchor tenant. An anchor tenant refers to a key tenant that draws large numbers of visitors, such as Starbucks, whose presence alone can significantly boost foot traffic to a shopping center.

Exterior view of Daiso store located in Busan Premium Outlet. Daiso.

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When opening a new store, Daiso requires it to be located in a prime spot within the local business district and have a minimum floor area of 330 square meters (100 pyeong). For interiors, Daiso insists on white walls, bright lighting, and wide aisles for easy movement despite the large number of products. Initially, Chairman Park started with a warehouse-style store where goods were stacked, but later switched to bright lighting and wide aisles to allow customers to browse more comfortably?a concept that continues to this day.