Global discount store chains surge into Korea amid rising demand for affordable products

A Don Quijote pop-up store at The Hyundai Seoul is crowded with visitors on its opening day, July 8. Yonhap

Global discount store chains are rushing to enter the Korean market, as rising consumer prices drive demand for more affordable products.

As a result, competition is intensifying with local brands, which have recently seen a surge in sales.

GS25, a major convenience store franchise operated by GS Retail, opened a pop-up store last week for Don Quijote, a Japanese discount chain, at The Hyundai Seoul. Running through Aug. 1, the store features 50 items under Don Quijote’s private brand, Jonetz, ranging from household goods and cosmetics to food, liquor and medicine.

On its opening day, July 8, the store drew a crowd of 1,200 people and sold out all items within 30 minutes.

Don Quijote operates 600 stores in Japan and over 100 more stores across seven other countries, including the United States, Singapore, Hong Kong and Malaysia.

The company’s pop-up store in Seoul follows an agreement in May with GS25 for Don Quijote to sell GS25 products inside the Japanese retailer’s stores. GS25 sold its products at 400 Don Quijote locations across Japan for one month, including food items created in collaboration with the hit Netflix series "Squid Game," which dominated sales.

“We signed this strategic partnership with Japan’s No. 1 discount chain as part of our goal to become a global retail platform. We will continue forging new partnerships with global distribution brands and expanding our global network for exports and imports, solidifying GS25 as a ‘global K-convenience store,'” said Huh Chi-hong, merchandise division chief at GS Retail.

Character goods and everyday household items are displayed inside a Miniso store in Seoul, Feb. 13. Korea Times file

Miniso, a Chinese retailer and variety store chain, has also opened stores in Seoul. Its first location launched in the Daehangno area in December, followed by a flagship store that opened last month in the city’s Seocho District.

Miniso, which has 7,000 stores across 100 countries worldwide, operated in Korea until 2021, but closed its locations following backlash over its similarity to Daiso, a major discount chain in Korea.

Yoyoso, another Chinese brand with over 3,000 stores in 80 countries, is expected to open its first store in Korea in Gunsan, North Jeolla Province, later this month.

The expansion of international companies into Korea follows a rising consumption trend focused on price-competitive retail outlets for everyday products. Daiso, which posted 4 trillion won ($2.9 billion) in sales last year, has increased its store count from 1,390 in 2021 to 1,520 this year.

Beauty product curation and sales platform CJ Olive Young, along with fast fashion platform Musinsa, have also gained popularity by offering products from small- and medium-sized companies at affordable prices. Last year, Olive Young posted record sales of 4.8 trillion won, while Musinsa achieved a record 1.24 trillion won in sales.