Japanese retail giant Daiso will open its first store in Israel tomorrow in the Sea Mall in Ashdod. The new 430-square meter store is expected to sell up to 20,000 products in various categories at a NIS 10 uniform price. Another store with 670 square meters of space will open in July 18 in the Renanim Mall in Ra'anana. A third store with 550 square meters will open on July 29 in the Cinema City G area in Rishon Lezion.
Daiso is trying its luck in a place where quite a few players offering a uniform cheap price have failed in the long term. For example, retailers like Cofix, Super Cofix, and Good Pharm have already added more expensive products in order to increase their diversity and pay their challenging rents. The chain's uniform price in Japan is 100 Japanese yen - only NIS 3.30 per product. In order to adjust to the local market, however, the chain decided on a strategy of a higher uniform price that would enable the chain to also open stores in shopping malls with high rents. In addition to a uniform price, Daiso recently also began marketing a limited range of items in Japan at higher prices ranging from 200 yen to 800 yen. The company says, however, that these items will not be sold in Israel at this stage.
Behind the Daiso's arrival in Israel is the Union group through Match Retail, managed by H&M and COS franchise holder Amihay Kilstein. The group is also the official importer in Israel for Toyota and Lexus.
The Japanese chain currently operates 5,000 stores in 30 markets worldwide with 100,000 items and an annual sales turnover of $4.2 billion. In addition to 3,000 stores in Japan, Daiso has nearly 2,000 branches outside the country in the US, Latin America, the Persian Gulf, and elsewhere in Asia, but has yet to do business in Europe. The items developed for the company at its headquarters in Hiroshima are manufactured and designed exclusively for it.
Daiso, founded in 1977, is the larger dollar-type store in the world. The chain's products include design items and accessories for various spaces in the home: kitchen, living room, bedroom, children's rooms, and bathrooms, in addition to toys, design accessories for birthdays, work tools, writing utensils, gardening tools, electronics products, vehicle products, sewing tools, animal accessories, etc.
Another retail chain, Miniso, is likely to come to Israel in strategic cooperation with Azrieli Group Ltd. (TASE: AZRG), with the first store being opened in the Azrieli mall in Tel Aviv. It appears that Daiso's strategy of a uniform and cheap price is likely to prefer malls in which the rent is lower. Stores are also likely to open later on streets outside shopping malls.
Published by Globes [online], Israel business news - www.globes-online.com - on July 3, 2018
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