Emart enters the ultra-low-priced household goods market... Can it break through Daiso’s barrier and create a new growth engine?

[Financial News] Emart has made a full-scale entry into the ultra-low-priced household goods market. With growth in the hypermarket business slowing, attention is focused on whether it can overcome the market leader Daiso’s barrier and turn Wow Shop into a new growth engine.
According to industry sources on the 21st, Emart will open 331-square-meter (100-pyeong) specialty stores for ultra-low-priced household goods at Starfield Market Wolgye and Emart’s Eunpyeong store, and begin full-scale operations. The company is moving into official business after wrapping up a pilot program that began last December and focused on around 1,300 types of household goods directly imported from overseas.
Emart will roll out around 12,000 newly developed products as Wow Shop begins full-scale operations. Each store is expected to carry 7,000 to 8,000 types of household goods, taking into account the season and the characteristics of each location. In addition to its existing kitchenware and home-furnishing products, Emart has substantially expanded its range to include everyday goods such as beauty products, health supplements, stationery and toys, and electronics.
Wow Shop products will be sold at uniform price points ranging from 1,000 won to a maximum of 10,000 won. About 60% of all the products developed are priced at 2,000 won or less. The store is also emphasizing ultra-low prices by offering digital and small home appliances, which are relatively more expensive, for under 10,000 won.
Behind Emart’s entry into the ultra-low-priced household goods market is a strategy to strengthen its grocery-shopping offer and draw in more customers. The plan is to broaden shoppers’ choices by adding household goods to the fresh foods in which Emart already has a competitive strength, and to use this as a new draw for customers. Analysts say this is also in line with the “price destruction” approach that Shinsegae Group Chairman Chung Yong-jin has long emphasized.
An Emart representative explained, “In an era of high prices, what customers want most is low prices,” adding, “We are seeking to expand our business in household goods in earnest as well, through specialty stores that bring together ultra-low-priced products.”
The industry is watching to see whether Wow Shop can become a new growth engine for Emart, particularly as growth in the hypermarket sector has slowed amid sluggish consumption and the expansion of online shopping. Emart’s discount store division posted total sales of 5.8247 trillion won in the first half of this year, up just 0.2% from 5.8119 trillion won in the same period a year earlier.
However, competing with Daiso, which has already established a strong foothold in the ultra-low-priced household goods market, is a challenge Emart must address. Asung Daiso, which operates Daiso, recorded sales of 4.5364 trillion won last year, up 14.3% from 3.9689 trillion won the previous year. Over the same period, operating profit also rose 19.2%, from 371.2 billion won to 442.4 billion won.
With Daiso strengthening its market position through around 1,600 stores nationwide, whether Emart can establish a distinctive competitive edge for Wow Shop will be key. Industry observers say Wow Shop’s success will depend on whether Emart can use “one-stop shopping”—where customers can buy fresh food and household goods in one place—to attract demand from existing Daiso customers as well.
Starting with Starfield Market Wolgye and Emart’s Eunpyeong store, Emart plans to expand its network of mid- to large-sized Wow Shop specialty stores to a total of five by the end of the year. It also plans to create new “Wow Shop zones” inside Emart and Emart Everyday stores and roll out its newly developed products in stages.
Hwang Un-gi, head of Emart’s Product Division, said, “Expanding opportunities to buy good products at reasonable prices is a core value Emart pursues,” adding, “By bringing together Emart’s product-planning capabilities and global sourcing expertise, we will continue to strengthen our range of ultra-low-priced household goods so customers can be satisfied with both the price and the quality.”
[email protected] Jang Yu-ha Reporter