Japanese retailer seeks niche

Hoping to benefit from Americans’ increased frugality and a large Asian community, Japanese home goods discount chain Daiso will open its first Los Angeles area store Saturday in Torrance.

The 9,000-square-foot location at 3842 Sepulveda Blvd. prices most of its products at $1.50, equal to roughly 200 Japanese yen. It has hundreds of items, from bottle openers and plastic slippers to a mesh food covering and disposable underwear.

Daiso (pronounced “die-so”) is ubiquitous in Japan, but is virtually unknown in most parts of Southern California and the United States.

“We wanted to start with a place that has a very large Asian population, so we wanted to start on a roll,” Daiso Holding USA President Masayoshi

Naito said through an interpreter during a press conference Friday.

More than a third of Torrance’s population is Asian, according to the 2010 U.S. Census.

In particular, Torrance has a highly visible Japanese business presence, with Toyota’s U.S. sales and marketing arm as well as Honda’s U.S. headquarters calling the city home.

Torrance City Councilman Gene Barnett welcomed the company to the city as he presented a plaque of appreciation after a ribbon-cutting ceremony.

During the Great Recession and the shaky recovery that has followed it, consumers increasingly have flocked to discount stores such as Walmart and 99 Cents Only Stores.

Most of Daiso’s products are under its own private label.

Echoing the Wal-Mart business model, Naito said Daiso buys items in such large quantities that it can keep its prices low.

Also like Wal-Mart, many of Daiso’s products – about 40 percent – are made in low-cost China. Another 40 percent is made in Japan, with the remaining 20 percent produced in 20 countries including Vietnam, Indonesia and South Korea.

Naito insisted that the low cost does not mean low quality.

“Just because they are inexpensive doesn’t mean they are

cheap,” he said. “We are making quality items throughout the world. Products with a lot of value for just $1.50.”

Daiso has 2,620 stores in Japan and another nearly 600 abroad, including 16 in the San Francisco Bay Area and Seattle, where the company opened its first U.S. store in 2005.

The company hopes to open six stores in the Greater Los Angeles area by the end of this year, said Yoshihide Murata, senior vice president of Daiso Japan.

Later this month, Daiso will open another store in Irvine, which has a large Chinese-American community.

The Torrance Daiso has a large exterior sign in English and Japanese and is next to Marukai Market, a Japanese grocery.

However, the chain’s target customers

are not only Asians. The company hopes to appeal to all residents.

That could be a challenge, Murata said.

“All the Asian people are aware of the Daiso brand,” Murata said. “It’s going to be a challenge to get all the other people in the United States aware of us.”

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