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'Daiso-nization': Market adopts ultra-low-price strategies as inflation ails grow

Published: 17 Apr. 2026, 07:51

Products from Emart’s ultra-low-priced private brand “5K Price” line are displayed at an Emart. [EMART]

Consumers are increasingly prioritizing money over value amid worsening inflation, and the overall Korean market is going through a so-called Daiso-nization where retailers opt for ultra-low-price strategies similar to Korean dollar store Daiso’s fixed pricing model of 1,000 won to 5,000 won (68 cents to $3.38).

Lotte Corporation and its affiliates — Lotte R & D Center, Lotte Wellfood, Lotte Mart and Korea Seven — have held weekly meetings since January at Lotte World Tower in southern Seoul to develop a private brand (PB) product that combines high quality with ultralow pricing.

As the first of the group's endeavors, Lotte rolled out its Sumgyeol Whole Loaf Bread on Thursday at the price of 2,500 won per loaf. The product came after four months of development, culmination of consumer surveys, tests, and even the Lotte R & D Center creating a patented lactic acid bacteria fermentation method.

“This is the first time a company-wide task force has been formed to develop a private brand product,” Kim Ye-rin, a merchandise planner for Lotte Mart and Super’s food PB development team, said.

“By mobilizing research and development, manufacturing and distribution capabilities across the group, we were able to launch a premium loaf at a price in the 2,000 won range.”

A private brand product “Sumgyeol Whole Loaf Bread” made by Lotte at Lotte Mart. The loaf of bread is priced at 2,500 won ($1.69). [LOTTE MART]

Other brands are also immersed in the who-makes-it-cheaper race.

Emart added more than 130 ultra-low-priced PB products under its “5K Price” line early last month, expanding beyond processed foods into small home appliances and miscellaneous goods.

A steam iron, hair dryer and body fat scale are priced at 4,980 won, while a corded vacuum cleaner and egg cooker cost 9,980 won. These high-value products are proving to be strong performers.

A total of 4,000 steam irons had been sold within 26 days of launch as of Tuesday, according to Emart, while 40,000 packs of French fries, totaling 16 tons, were sold at 1,980 won for 400 grams. Sales of tofu and bean sprouts priced at 980 won each reached 2.1 million units and 1.8 million units, respectively, between September last year and Tuesday.

“We are lowering prices by cutting intermediary costs through direct transactions and reducing unit prices through advanced logistics systems and integrated purchasing across group affiliates,” an Emart representative said.

Sanitary products are displayed at a Homeplus store in Gangseo District, western Seoul, on April 6. [YONHAP]

Lotte Mart also introduced cosmetics under a fixed pricing model of 4,980 won. A total of 44 items are being sold across 80 stores. Not only K-beauty brands but also overseas brands, such as Poland’s “Ziaja,” are priced at 4,980 won.

For Homeplus, it is focusing on ultra-low-priced food items. It is offering wine priced at 4,990 won and nonalcoholic beer at 800 won. It will also begin selling fresh eggs imported from Thailand starting on Sunday, priced at 5,890 won for a tray of 30 large eggs, which is 70 percent to 80 percent of the price of domestically produced eggs. As egg prices have recently surged, the company moved quickly to sell imported Thai eggs after the government allowed imports.

The growing push by large discount store chains to introduce ultra-low-priced products under 5,000 won is largely driven by the influence of Daiso. Asung Daiso, which operates Daiso, posted annual revenue of 4.5 trillion won last year, the highest since its founding in 1997.

This stands in contrast to declining performances at large discount stores. Daiso ranks third in domestic sales after Emart and Homeplus, but leads in terms of operating profit. Asung Daiso recorded an operating profit of 442.4 billion won last year, vastly surpassing Emart's 87.2 billion won, and Lotte Mart, which posted an operating loss of 7 billion won. Asuang Daiso's operating margin also exceeded 10 percent, significantly higher than the roughly 3 percent level seen at large discount store chains.

Some point out that large discount stores have missed consumer trends in categories other than food because they were immersed too much into fresh food — a key strength of offline retail — amid competition with online retailers.

Emart’s low-price private brand label “5K Price” is introduced at a Emart in Yongsan District, central Seoul, on Aug. 3, 2025. [NEWS1]

“Until recently, there was a perception that there was a limit to how much you can earn selling something for 1,000 won, but now, companies are busy benchmarking Daiso,” said an industry insider who asked to remain anonymous.

This trend is expected to continue for some time. As sluggish domestic demand persists, more consumers are seeking reasonably priced products with acceptable quality.

“Competition over ultralow prices among retail channels will intensify as disposable income declines,” said Lee Hong-joo, a professor in the Department of Consumer Economics at Sookmyung Women’s University. “Ultimately, the outcome will depend on both price competitiveness and product quality.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY CHOI HYUN-JU [[email protected]]