Japanese retail giant Daiso will open its first stores in Israel in two weeks. The stores will feature a variety of accessories and home products at a uniform NIS 10 price for all items.
Three stores will 500 square meters each will be opened in the first stage. The chain's CEO in Israel will be Uzi Benita.
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.
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.
Daiso will offer 30,000 of the 100,000 items designed for the company worldwide. The first three stores will be opened in July in Ashdod, Ra'anana, and Rishon Lezion. Locations in shopping malls in Tel Aviv are conspicuously absent, but the chain's CEO promises that branches will also be opened there later on.
Another retail chain, Miniso, is likely to come to Israel 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 likely to open later on streets outside shopping malls.
Daiso's first store with 450 square meters, is slated for opening on July 4 in the Sea mall in Ashdod, followed by another store with 670 square meters in the Renanim Mall in Ra'anana on July 18. A third store with 550 square meters will be opened at the end of the month in the Cinema City G area in Rishon Lezion.
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.
The Japanese chain currently operates 5,000 stores in 30 markets worldwide with 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, with 60-70% of the products being manufactured in Japan.
Daiso, founded in 1977, is the larger dollar-type store in the world. It is likely to compete in Israel with chains such as Max Stock and Hastok due to its combination of a large store and cheap products. 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, electronics products, vehicle products, sewing tools, animal accessories, etc.
Published by Globes [online], Israel business news - www.globes-online.com - on June 20, 2018
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