The Three Kingdoms of 100 Yen Shops: New Strategies to Control the 1 Trillion Yen Market…Overseas Expansion Begins, with Many High-Priced Products

From “100 Yen Uniform” to “Strongest Cosmetics Shop

100-yen stores are no longer “100-yen uniform.

In late August, a FRIDAY reporter visited “Daiso & Aoyama 100 Yen Plaza Nakano Waseda-dori Store” near JR Nakano Station in Tokyo. This store was established as a joint venture between Daiso Sangyo, which operates the original 100-yen store, Daiso, and Aoyama Shoji, which operates Yofuku-no-Aoyama.

The Nakano Waseda-dori store is a huge store, with an entire four-story building used as a sales floor. It was a Saturday afternoon, and the store was packed with men and women of all ages. One of the customers, a woman in her 40s, picked up a “side-mountable cold water bottle” (300 yen). 300 yen at a 100-yen store may seem like a very aggressive price, but it has a large capacity of 1.6 liters and can be placed horizontally, making it an excellent way to effectively use refrigerator space. Cain’s, a home improvement center, has a similar product, but it costs 798 yen including tax, more than double the price of Daiso’s product. Market advisor Hideo Amano, who visited the store with our reporter, said, “Currently, Daiso is selling 100 yen products.

Currently, Daiso is shifting to a strategy of using 100-yen products as pandas to attract customers to buy higher-priced products. That is why, although it is a 100-yen store, it does not call itself a ‘100-yen store.

The first Daiso store opened in Takamatsu in 1991 and is a pioneer in the 100-yen store market, currently operating 5,350 stores in 26 countries and regions including Japan.

In July, when Shohei Ohtani (30) hit an extra-large No. 30 ball with a distance of 144 meters, the ball passed near the “DAISO” signboard on the light stand, attracting attention in Japan and the United States.
DAISO opened its first U.S. store in Seattle in 2005, and now operates 121 stores in the country, offering a lineup of products priced at $1.75 each, which is very popular in the U.S., where inflation is still high.
The 100-yen store business requires only a simple investment in equipment: a cash register, shelves, lighting, and merchandise are all that is needed to open a store, and withdrawing from the business is also easy. It is much easier to expand than a restaurant,” says Amano.

Daiso was founded by Hirotake Yano, a businessman who passed away in February of this year. Originally a mobile seller of daily sundries, Mr. Yano was driven into a corner by customers who kept asking him, “How much is this? He was cornered by customers who kept asking him, “How much is this? He said, “Everything is 100 yen! This was the starting point of what would later become the 100-yen store.

Perhaps it is because the company started as a street vendor that it has annual sales of over 600 billion yen, but its headquarters is located on the second floor of a distribution center in Higashihiroshima City, Hiroshima Prefecture. The office is so modest that it is hard to believe that it is the office of a large corporation. when a visitor enters the office. It shows the spirit of not spending money on the office, but rather adding as many products as possible,” says retail and distribution analyst Akihito Nakai.

The Daiso stores are becoming larger and larger every year.

In the past, Daiso used to have small, compact stores in the city. Recently, however, high-priced products are gaining acceptance, and the “100-yen tag” has been removed. With that, the product lineup has increased and stores have grown in size. It can be said that Daiso has evolved from a “100 yen store” to the “most powerful cosmetics store.

The intensifying battle for second place

Celia, the industry’s second largest retailer with 2,023 stores in Japan and annual sales of approximately 220 billion yen, has made it its destiny to catch up to the back of Daiso. The company opened its first store in Gifu Prefecture in 1994, and this year marks its 30th anniversary.

Celia has maintained its 100-yen store format, whereas Daiso secures profits from its high-priced products. The company has sometimes struggled in the face of rising labor costs in China and Vietnam, where its products are manufactured, as well as rising oil prices and transportation costs. Another characteristic of Celia is that it targets female customers.
In the ’00s, the 100-yen store industry was dominated by Daiso. However, from ’10 onward, Celia gained momentum with its new store “Color the Days,” based on the concept of “coloring everyday life,” which became a big hit. In addition, the enhancement of petit-price accessories and cosmetics led to the acquisition of female customers,” says distribution journalist Junnosuke Nagahama.

Behind the company’s rapid growth were the management skills of Hiromitsu Kawai, 77, the founder of the company, and his nephew, Eiji, 56, who took over as president in 2002.

In 2004, Hiromitsu’s Celia introduced a point-of-sale (POS) system, the first of its kind in the industry, to analyze sales. We used this information to develop products and place orders, and gradually increased our influence. Using the information from the POS system, Mr. Eiji developed stores that catered to women, and the company’s performance grew rapidly.
In response to Celia’s success, Mr. Yano of Daiso, which had not installed a POS system, withdrew it entirely, saying, ‘I was wrong.'” In 2006, they introduced the system and pulled away from Celia once again,” said Nakai.

Thus, Celia firmly established its position as the second largest company in the industry. On the other hand, Celia has been overtaken by Kandoo, which has 1,258 stores and annual sales of 80.3 billion yen.

Founded in ’93 and once second only to Daiso, Cando, in contrast to Celia, has been developing its product lineup without the “100 yen tag,” but it has not been able to offer as wide a selection of products as Daiso. Thus, it’s difficult to fill large floors. Kandoo did not have the sharp features of Celia, and was struggling.
So, Candu made a reversal move. At the end of 2009, it sold more than half of its shares to retail giant Aeon and became its subsidiary. It was a case of “let the flesh cut off the bones,” as they say. I feel that they are determined to defeat Celia, even if it means selling their souls to Aeon. Some Aeon stores have 100-yen stores attached to them, and at present they are often not Candu stores but stores of other companies. However, in the future, it is expected that the 100-yen stores inside smaller stores will be replaced by Candu stores when contracts are renewed,” he said.

This will allow Candu to increase the number of its stores and deal a major blow to its nemesis, Celia.

Celia is popular among women, so many of its stores are attached to small supermarkets and drugstores, where housewives are the main customers. Housewives’ purse strings are tight, so they have no choice but to maintain the 100-yen store. However, Candu is steadily preparing to launch an offensive to open stores in small supermarkets under the umbrella of a giant capital. Celia cannot afford to sit on its laurels. Celia is increasing the number of stores in rural areas, but I don’t feel that they are as strong as they used to be.

Competition in the 100-yen store industry is fiercer than ever.

The three companies want to enter the second and third floors of Aeon and Ito-Yokado stores. Aeon is currently renovating old stores and combining tenants to create shopping malls. Yokado is withdrawing from the clothing business and converting to tenants. With major supermarkets undergoing such transformation, securing locations for store openings will determine performance.
Daiso is strong in large sales areas and can fill floors in combination with Sleepy’s and Standard Products, the company’s 300-yen stores. Cando will open stores in its parent company, Aeon. Celia will face an uphill battle, but if they stop offering 100-yen items and start offering 200- and 300-yen items, or open new 300-yen stores, competition will intensify further,” he said.

The war of the 100-yen store triumvirate, now worth 1 trillion yen, is only going to get more intense.

From the September 20, 2024 issue of FRIDAY