The Life Interview with Don Quijote founder Takao Yasuda: Boss of bargains

The lessons learnt by Don Quijote founder Takao Yasuda when presenting merchandise in his first tiny store - compressed displays and large point-of-purchase signs - have stayed with him

In this era of pared-back, industrial-chic interiors, a typical Don Quijote store offers quite a different approach to an Instagram-friendly retail concept.

The Japanese discount store chain, which opened its first outlet in Singapore at Orchard Central on Dec 1, has stuck to its tried-and-tested method of store displays - think huge, garish, hand-drawn signs, tightly packed aisles and an inventory that boasts everything from toilet paper to second-hand Rolex watches.

It was renamed Don Don Donki in Singapore because a Don Quijote restaurant already exists here in Dempsey Road.

The 28-year-old brand has more than 360 stores globally located in Japan, the United States and now Singapore, and has built a fervent following that includes the likes of pop star Lady Gaga.

The stores are best known and loved for their maze-like interiors, making every trip a treasure hunt of sorts.

Customers can be found streaming out of the 24-hour Singapore store with the distinctive yellow plastic bags in tow, no matter the time of the day.

Chairman and founder of Don Quijote Takao Yasuda has always done things differently.

He retired two years ago and relocated to Singapore with his wife, but decided to forgo the laidback life when he was hit by sticker shock here.

"I was surprised to see how expensive things were in Singapore - what is one dollar in Japan is sometimes two or three dollars in Singapore," the 68-year-old said during an interview with The Straits Times at his office at Marina Bay Financial Centre.

"In Japan, I'm known as the king of discounts so even though I was retired, I felt there was an opportunity to bring Don Quijote to Singapore, given the high price differences between the two countries."

The Singapore outlet is special to Mr Yasuda as this is the first overseas store that he has built from the ground up.

His expansion into Hawaii and the continental US had come about as the result of acquisitions of bankrupt businesses.

"For me, the sense of achievement has been different with this store given I saw it go from zero to 100. Instead of just adding the essence of our Japanese stores into an existing store, in Singapore, we've really been able to create the Don Quijote experience like it is in Japan."

The result is a 1,397 sq m store at Orchard Central, packed to the brim with food and beverage, groceries, party goods, costumes, jewellery and electronics.

Artists work within the store to draw the signs that point out deals and discounts, complete with cartoonish impressions of products.

The dizzying array of items on high shelves flanking tight aisles makes it unpredictable what you might find just a few paces away.

Many of the characteristics of a typical Don Quijote store - the packed displays, round-the-clock opening hours and variety of inventory - were retail strategies that Mr Yasuda came across by chance.

The son of a teacher and a housewife graduated with a law degree from Keio University in Tokyo in 1973. But by his own admission, the Sentosa Cove resident spent most of his college years playing mahjong and had little interest in his studies.

"I felt I did not have any specialised skills or strengths - what I thought I would be best at was selling things," Mr Yasuda says.

Using $70,000 that he had saved from working part-time jobs in the real-estate industry, 29-year-old Mr Yasuda started his first general merchandise store called Thieves Market - the predecessor to Don Quijote - in 1978. He would go directly to manufacturers and warehouses to find things he could buy at a cheap price to sell in his 70 sq m store - anything from electronics to groceries.

His first venture taught him a multitude of lessons.

An attempt to present a variety of merchandise in his tiny store led to compressed displays and large point-of-purchase signs.

And while restocking the store alone late into the night, he would get constant inquiries from passers-by who thought the store was still open, prompting Mr Yasuda to see the benefit of having late-night shopping hours.

"My first store taught me a lot about how to purchase items - many things I thought were cheap ended up not being very economical once I put in my own mark-up. In other instances, customers were just plainly not interested. I learnt what items sell well, how to negotiate with sellers and how to make the store exciting for customers."

With that know-how, he opened his first Don Quijote store in Fuchu, Tokyo in 1989, bringing many of the elements that worked into his new brand.

As he expanded his stores across Tokyo, Mr Yasuda also learnt the importance of delegation and walked the talk by entrusting his young store chiefs and staff with the selection, buying and even pricing of merchandise.

To him, it made sense that those running the individual stores would know best what people want as they have the most interaction with customers in the stores.

This high degree of autonomy for his staff continues to this day.

His cheap goods and late-night shopping hours proved to be a hit - filling a gap in the market that few retailers in Japan had thought to target.

By 2000, the success of the brand saw its stock register on the first section of the Tokyo Stock Exchange and, just a year later, the first store opened in Fukuoka, leading the way for a nationwide expansion.

The brand registered 828.8 billion yen (S$9.9 billion) in net sales for the fiscal year that ended June 30. Even though the Japanese economy has been lacklustre since the 1990s, the brand has continued to chart an upward path, showing steady growth over 28 consecutive years.

This does not mean that everything was smooth-sailing. The maverick industry veteran has on occasion found himself tussling with bureaucratic institutions over his customer-first philosophy.

Back in 2003, as stores could not find enough certified pharmacists willing to work late-night hours, the chain started connecting shoppers to pharmacists located in remote areas via videophone.

The Japanese health authorities stepped in as the law mandated the physical presence of certified pharmacists on the premises.

In that instance, the brand backed down, but insisted that in an emergency, it would give away drugs after shoppers had communicated with pharmacists over videophone.

Mr Yasuda's reasoning was that the authorities cannot intervene if it was a simple giveaway and there was a need for medicine even when pharmacies were shut.

When the authorities blocked this initiative as well, there was public outrage against what was seen as bureaucratic bullying. A few months later, the Japanese regulators changed the law to allow for late-night drug sales via remote pharmacists.

Mr Yasuda's expansion into Singapore and, soon, Thailand - slated for next November - comes from his innate desire to put his customers first as well.

"For me, it is most important that I think about the consumers - will they benefit from our store? I think very carefully about what I can add to the customer experience and I do believe the Don Don Donki store offers something unique for the Singapore customer," he says.

It is something of a gamble given Singapore already has the likes of Japanese discount stores such as Daiso and its own well-loved 24-hour institution, Mustafa Centre.

But despite the challenging retail environment, Mr Yasuda is not fazed.

"I think we all offer something different - in our stores, we have perishables, delicatessens and even alcohol that is all designed or made in Japan. I respect the other brands, but I do not feel like they are my direct competitors - we all have our own niches," he says.

For now, the sprightly boss says he hopes to hand back the reins to his younger employees in a few years and focus on his passions, which include boxing, reading and diving, which he spends 100 days a year doing.

He hopes to have at least 10 stores in Singapore by 2022 and see a doubling of the company's sales figures over the same time-frame.

He is open to taking the brand further afield - not just within South-east Asia, but even Europe, if he gets the opportunity.

"I want to open a store wherever there are people who appreciate good quality products and good discounts. One should always be on the lookout for new challenges and opportunities - I believe that is the only way a company can continue to grow and succeed."

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A version of this article appeared in the print edition of The Straits Times on December 18, 2017, with the headline The Life Interview with Don Quijote founder Takao Yasuda: Boss of bargains. Subscribe