By Aimee Chanthadavong

Japanese variety retailer Daiso continues its rapid expansion across Australia opening an 1800 square metre flagship store in Melbourne’s CBD with plans to open another 20 along the east coast next year.

The retailer, which sells more than 70,000 of mainly Japanese imported products at a single price of $2.80 in categories, including cosmetics, kitchenware, food, homewares, stationery, lifestyle and toys has already opened 10 stores since it launched in the Australian market in April 2013.

Daiso Australia CEO Kit Cheong assures the company’s target to fill the gap in the market for affordable households good is not over yet based on the positive responses it has received since launch.

“I think Australians have responded really well to us,” she said.

“One of the first question customers ask us is ‘are you sure this is $2.80?’ They’re often in disbelief about the price more than anything else. There’s also a fantastic level of feedback and engagement from customers whether it’s on social media or in-store.”

Other recently launched stores are at QV, Chadstone and Caroline Springs in Victoria with two more to open before the 2013.

“Where we open our stores is really based on the capacity as we want to make sure we get sites that we want to be in,” Cheong said.

“At the start it was difficult to explain the concept but now we’ve managed to secure fairly significant and prime locations, such as in Chadstone and Chermside. Things have started to look up as we begin to understand our customer base more and we’re going to be a lot fussier about where we’re located. We’ll of course also look at rents that we’re able to afford for our model.

“This is why when we open our 20 stores next year we’ll mainly open in regional areas with likes of Indooroopilly and Carindale in Queensland because we believe those types of centres will put us on the map and make us more noticeable.

“The landlords are also starting to understand us, which is why it’s important for us be in those high traffic centres. Maybe in two years’ time until people know who we are exactly like JB Hi-Fi then where we open might not matter as much anymore.”

Getting the word out about Daiso as a household name remains a goal for the company as it’s often compared to other discount variety stores, which Cheong argues the store is far from being similar to anything that’s out there.

“We’re just somewhere where you can get great bargain products,” she said.

“There’s still a branding issue, which we continue to face, and that’s what we’ll be doing for the next 12-to-24 months. It’s not until people shop with us do they change their perception. We’re not like The Reject Shop because we have quality merchandise and provide a great shopping experience; we’re not just about a great price point.”

But the single biggest challenge the company currently faces is within its supply chain. According to Cheong it currently takes the company a total of 10 weeks for new stock to be delivered from Japan to Australia. Although there are plans to open an Australian distribution centre early-mid next year with hope it will improve efficiency in the supply chain.

“I think at the end of the day we’ve only really been in business for six months; it has been a huge learning curve and it will continue to be one.”