SEOUL, Sept. 26 (Korea Bizwire) — South Korean stationery stores have been struggling to survive in the face of stiff competition from Japanese dollar-shop chain Daiso, industry sources said Tuesday, with many calling on the franchise to focus on household items.
Daiso, which sells products mainly priced from 2,000 won (US$1.76) to 5,000 won, currently operates over 1,000 outlets across the country, an increase from 850 in 2012.
The store posted 1.56 trillion won in sales in 2016, over a 30 percent jump from 1.2 trillion won a year earlier.
“It is not reasonable for the household item outlet to sell school stationery products in such quantities,” said Lee Dong-jae, head of an association of stationers, adding his association will deliver its views to relevant government agencies.
Daiso’s dramatic growth has partly been helped by the fact it is not subjected to the regulations aimed at protecting small and medium-sized firms. The rule bans franchises from opening stores near another shop handling similar goods, the sources said.
A survey of 459 stationers conducted by the association showed 92.8 percent suffered from a major setback in sales due to Daiso outlets operating nearby.
Only 5 percent said they were not affected by Daiso, while 8.1 percent said they will no longer be able to stay afloat because of the competition from the chain.
About 9.6 percent said they will soon either shut down the shops or begin a new business.