Nestled amidst Daiso’s eclectic array of vibrant stationery lies a retail strategy that has captured the hearts of many. The Japanese low-cost retailer, renowned for its ¥100 (about $0.70) offerings, has solidified its position as a household name in Japan. However, the burning question now looms large—can Daiso replicate this success in the U.S.?
Founded in the 1970s, Daiso Industries boasts over 4,000 stores across Japan and has expanded its footprint to 25 countries and regions worldwide. While Daiso initially dipped its toes into the U.S. market back in 2005, it has ramped up its efforts in recent years. With approximately 120 stores spread across seven states and more on the horizon, Daiso’s U.S. expansion is in full swing. Unlike its Japanese model, prices in the U.S. vary slightly, starting at $1.75 or $1.99 depending on the state.
“We have experienced remarkable growth here in the U.S.,” remarked Dani Davis, vice president of marketing for Daiso’s U.S. unit. Davis attributed this expansion to a robust social media presence, which has fueled demand in various localities.
Collaboration between Daiso’s U.S. team and its Tokyo headquarters is key, ensuring consistency across operations. “Every single department works very closely with our Japan counterparts,” Davis emphasized.
Daiso leverages its Japanese heritage as a strategic selling point, promoting the allure of “brand Japan” to set itself apart. Customers are drawn to the “kitschiness” of Japanese branding, Davis noted. This unique appeal, she explained, extends beyond mere functionality.
While a fraction of Daiso’s products are sourced domestically, the brand’s “Japanese essence” remains a distinguishing factor in the U.S. market. Brad Jashinsky, a director analyst at research firm Gartner, highlighted the importance of “brand Japan” as a key differentiator for Daiso in the U.S., noting its ability to offer distinctive Japanese-inspired products compared to other discount retailers.
The U.S. expansion of Daiso and similar competitors like MiniSo occurs against the backdrop of economic uncertainty. Consumer confidence has wavered, and U.S. consumers are increasingly price-sensitive amidst rising costs.
Despite these challenges, Daiso remains optimistic about its U.S. prospects. The company plans to open 65 stores in 2024, with a goal of surpassing 1,000 stores by 2030. Davis acknowledged the ambitious nature of this target but emphasized the company’s commitment to substantial growth in the coming years.
With its recent announcement of a new 600-square-meter space in Houston and multiple store openings across several states, Daiso’s expansion momentum in the U.S. shows no signs of slowing down. As Japanese companies look beyond their shrinking domestic market for growth, the U.S. emerges as a promising frontier, offering a vast market of value-seeking consumers.
(Source: Japan Times)
