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DECEMBER 13, 1999 VOL. 154 NO. 23
Daiso Industries, for example, gets a cheaper price by negotiating directly with manufacturers rather than using middlemen. Daiso, a Hiroshima-based chain of 100-yen shops, was Japan's fastest-growing retailer last year. Sales shot up 69%--at a time when the industry as a whole saw just a 1.3% rise, according to a survey by the business daily Nihon Keizai Shimbun. The company is expecting another huge increase this year, from $818 million to $1.4 billion, by opening nearly two new stores every day. President Hirotake Yano says the secret to Daiso's success lies not in the products themselves but in the wide variety offered. "Shopping here is like playing a game," he says. "The shoppers have fun, and whatever they buy is a bonus." His stores carry about 40,000 items, everything from plastic trash cans to nail polish, underpants, pliers, reading glasses, wine goblets and ceramic pots. At regular stores, these items could cost up to 15 times more. Kazue Takasu, a Tokyo housewife, came out of Daiso's shop in Tokyo's trendy Shibuya ward carrying a white plastic bag and wearing a big smile. She bought sandals, a cosmetic pouch and other items that together cost just $8. "It's so much fun," says Takasu. "This is like a treasure hunt." The drugstore chain Matsumotokiyoshi recently became the first company ever to move directly from the over-the-counter market to the Tokyo Stock Exchange's top tier, where blue-chip companies are listed. President Kazuna Matsumoto wants to make his shops as accessible as possible, even at the cost of attracting shoplifters. Customers are free to test new lipsticks, eye shadows and other cosmetics. As a result, the shops have become a favorite hangout for teenage girls. Like Don Quijote, Matsumotokiyoshi is a popular dating spot for young couples. Matsumoto says many high-school girls come to his shops and give themselves complete makeovers using free samples. And some even shoplift--losses from theft amount to a relatively high 2% of the chain's sales. But he doesn't seem to mind. "We're giving them the thrill of stealing," he laughs. That doesn't sound like a viable business philosophy, however, and many wonder how long stores like Matsumoto's can maintain such a strategy. Japanese consumers are capricious, says Masahiro Matsuoka, a retail analyst at Warburg Dillon Read in Tokyo, and previous stabs at discount retailing have fizzled after early success. "It's too soon to judge whether they're just a temporary fad or not," says Matsuoka. "But I don't think they can keep expanding as they are." Aoyama Trading, a discount chain selling men's suits, was successful in the early 1990s, but lately the retailer has closed six of its shops in Tokyo. And Daiso's 100-yen shops have moved into the space. Don Quijote, meanwhile, has become so successful it's getting attention it doesn't want: people living near its stores have been complaining about the late-night racket. Billboards in Tokyo's middle-class Suginami ward warn: "Don Quijote, don't open a store here!" But at the very least, these shops succeed where the Japanese government, through pump-priming and coupon giveaways, has failed: they've gotten consumers to open their wallets. TIME Asia home Quick Scroll: More stories from TIME, Asiaweek and CNN | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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