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Hirotake Yano, founder and president
of closely held Daiso Sangyo Corp., the self-described “Japanese shopping
wonderland,” was one of the country’s first vendors to adopt a
single-price model and used that strategy to build a net worth that the
Bloomberg Billionaires Index values at $1.9 billion.
“His timing was perfect,” Pascal
Martin, a partner at OC&C Strategy Consultants, said in an email. “Opening
the first 100-yen store in 1991, a couple of years after the burst of the
Japanese economic ‘bubble,’ which was the beginning of a profound shift in
Japanese consumer culture.”
Yano, 74, declined to comment on his
fortune, according to a Daiso spokeswoman.
Yano’s path to entrepreneurship was
anything but direct. After graduating from Chuo University in Tokyo, he
drifted through a series of different jobs that included running his
father-in-law’s fishery until it went bankrupt, according to Daiso’s website.
He began hawking goods from the back
of a truck in 1972 and came up with the idea of charging 100 yen for all his
merchandise to save the time it took to attach the price tags. He incorporated
Daiso, which translates to “creating something big,” in 1977.
Stagnant wages and a sputtering
economy led to a fundamental shift among Japanese consumers in recent decades,
spurring them to seek greater value for their money. That has proved to be a
boon for the nation’s discount retail industry, with annual revenue of about
600 billion yen ($5.4 billion), UBS Group AG said in a March 2016 note to
clients.
Daiso, the largest of the
group, operates more than 3,150 stores domestically and 1,800 overseas. Revenue
for the Hiroshima-based retailer totaled 420 billion yen for the year ended
March 2017, up from 81.8 billion yen in 1999.
Seria Co., Japan’s
second-largest discount retailer, has surged 39 percent this year, boosting the
value of the 37 percent stake held by Hiromitsu Kawai and his extended
family to $1.3 billion. Kawai, who created the Ogaki-based business in
1987, handed control to nephew Eiji Kawai, who joined as managing director in
2003, and was named president in June 2014.
Masanori Kobayashi, a Seria
spokesman, confirmed the family’s holding, while declining to comment on its
wealth.
Seria benefits from same-store sales
growth that’s about 1 percentage point higher than peers, according to Nomura
Holdings Inc. analyst Kousuke Narikiyo. The company seeks to gain a
competitive advantage through an inventory management system, compared with
Daiso, which puts more emphasis on volume to drive profit.
Daiso sells about 70,000 household
items, an offbeat collection that includes finger rollers, mannequin heads,
fake money, pet clothes, chair socks and comic book storage bags. Revenue
climbed 6.3 percent in fiscal 2017, compared with Seria’s 11 percent growth.
Yano attributes his success to
astute product sourcing, which allows Daiso to offer high-quality items
alongside quirky must-haves, all for 100 yen apiece, the equivalent of $1. His
in-house buyers negotiate directly with manufacturers to order large quantities
at low prices, a strategy similar to the one used by Bentonville,
Arkansas-based Wal-Mart Stores Inc., the world’s biggest retailer.
While Japan’s economy has sprung to
life -- posting five consecutive quarters of growth, its longest run in a
decade -- the desire for deals remains firmly rooted in the minds of consumers.
“Japanese people want more savings
these days,” Nomura’s Narikiyo said. “They won’t abandon the habit of
buying budget goods developed over the past 20 years.”
To contact the reporters on this
story: Venus Feng in Hong Kong at vfeng7@bloomberg.net, Grace Huang in Tokyo at
xhuang66@bloomberg.net.
To contact the editors responsible
for this story: Robert LaFranco at rlafranco@bloomberg.net, Robert Olsen, Peter
Eichenbaum
Bloomberg
Venus Feng and Grace Huang 5 hrs ago
BC-JAPAN-DOLLAR-STORE-BILLIONAIRE
1/4 SLIDES © Venus Feng and
Grace Huang
BC-JAPAN-DOLLAR-STORE-BILLIONAIRE
Selling everyday items to bargain
hunters has made the founder of Japan’s biggest discount store a billionaire.
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