Founder of Daiso stores profits from Japanese desire to secure good deals

Mr Hirotake Yano, founder and president of Daiso Sangyo Corp, was one of the country's first vendors to adopt a single-price model.
Mr Hirotake Yano, founder and president of Daiso Sangyo Corp, was one of the country's first vendors to adopt a single-price model. PHOTO: LIANHE ZAOBAO

TOKYO (Bloomberg) - Selling everyday items to bargain hunters has made the founder of Japan's biggest discount store a billionaire.

Mr Hirotake Yano, founder and president of Daiso Sangyo Corp, was one of the country's first vendors to adopt a single-price model.

He used that strategy to build a net worth that the Bloomberg Billionaires Index values at US$1.9 billion (S$2.6 billion).

"His timing was perfect," Mr Pascal Martin, a partner at OC&C Strategy Consultants, said. "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."

Mr Yano, 74, declined to comment on his fortune, according to a Daiso spokesman.

His path to entrepreneurship was anything but direct. After graduating from Chuo University in Tokyo, he drifted through a series of 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 US$5.4 billion, UBS Group 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. It sells about 70,000 household items.

Mr 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.

While Japan's economy has posted five consecutive quarters of growth, the desire for deals remains firmly rooted in the minds of consumers.