Daiso is a fixed-price retailer that originated in Japan and now operates in various countries, including South Korea, offering household goods at affordable prices. The company primarily sells various household items, stationery, and kitchen supplies ranging from 1,000 to 5,000 KRW, gaining popularity among consumers for its cost-effective product lineup. Recently, Daiso Korea has achieved significant success by launching cosmetic products that serve as alternatives to high-priced brand-name products.
Daiso’s recent expansion into the health supplements market has sparked mixed reactions from consumers and industry professionals. Since February 24, the company has been selling health supplement products from Pharmaceutical Company A and Pharmaceutical Company B at 3,000 to 5,000 KRW across 200 stores nationwide. This strategic move not only offers consumers more affordable options but also has the potential to significantly reshape industry competition.
Market Positioning: Affordable Supplements and Consumer Response
Daiso, known for providing household goods at reasonable prices, has now extended its reach to health supplements, offering products like vitamins, lutein, and omega-3 at significantly lower prices than pharmacies. Affordable health supplements enhance accessibility to health management while meeting the needs of many consumers looking to try supplements. Market feedback indicates that consumers have responded positively, appreciating both the competitive pricing and the convenient one-month supply packaging that lowers the financial barrier to trying supplements. However, concerns remain about product reliability, with some questioning whether the ingredients and effectiveness match those of more expensive alternatives.
Industry Opposition and Market Dynamics
Pharmacists, a key distribution channel stakeholder, have expressed strong opposition, fearing revenue losses as identical products are sold at much lower prices. Some have even called for a boycott of pharmaceutical companies supplying Daiso. In response to the controversy, Pharmaceutical Company B withdrew its products just five days after launch, while Pharmaceutical Company A and Pharmaceutical Company C are reconsidering their sales strategies. Daiso’s entry into health supplements and product strategy has created new market dynamics, though questions remain about whether it will disrupt existing market equilibrium.
Future Outlook and Industry Implications
Although Daiso’s supplement sales provide consumers with cost-effective choices, conflicts with pharmacies and pharmaceutical firms are likely to persist. Additionally, the challenge of educating consumers on product quality and proper usage remains. Looking at international examples, Japan’s Don Quijote has successfully boosted offline sales by prioritizing pharmaceuticals and health supplements. It remains to be seen whether Daiso will follow a similar path or face resistance. Moreover, as the private label supplements market expands, there is growing potential for brands to offer high-quality products without direct brand ownership.
Daiso’s entry into the health supplements market presents both challenges and opportunities. If demand remains strong, other distribution channels, such as convenience stores, may also explore supplement sales. Moving forward, industry participants should monitor market trends closely, potentially in collaboration with private label supplements manufacturers such as Kolmar BNH, to effectively navigate these market shifts.
