Daiso severs association with Japan

Asung Daiso's logistics center in Busan / Korea Times file

Asung HMP, the largest shareholder of Asung Daiso, a 1,000 won ($0.76) household goods store, has bought a 34.21 percent stake in Daiso Sankyo, Asung’s Japanese equity investment partner, market watchers said Wednesday. The purchase price was about 500 billion won.

The acquisition was made in order to shed a long-held misconception that Asung Daiso is a Japanese entity, according to the company.

“We will start anew with a strong identity as a Korean company,” Asung Daiso said.

The largest shareholder of Asung HMP is company chair Park Jeong-boo who holds a 50.02 percent stake. The acquisition will raise Asung HMP's total stake to 84.23 percent.

Asung Daiso was launched in May 1997 when Park opened a household goods store in eastern Seoul's Cheonho-dong neighborhood.

The name of the store became Daiso in 2001 after it formed a joint venture with Daiso Sankyo, which made an equity investment of 3.8 billion won.

The business uncertainties of Asung have since been amplified due to repeated moves to boycott Japanese products, because Korean consumers associated the name Daiso with Japan’s past wrongdoings and deep influence in Korea's consumer market.

Asung issued statements repeatedly saying “Asung has no relationship with Japan other than it has a Japanese equity investment partner. We do not pay the Japanese partner royalties or exchange human resources. Our Japanese partner does not have any involvement in the management of our company.”

Many Koreans joined in on a boycott of Daiso and Uniqlo in 2019 and for a few years after that.

The collective move was prompted by Japan's curbs on three key materials Korea needed to manufacture semiconductors and displays. They were fluorine polyimide, photoresist and hydrogen fluoride.

Japan produces about 90 percent of fluorine polyimide and photoresist and around 70 percent of hydrogen fluoride. The curbs left the local semiconductor industry helpless.

Japan put in place the export restrictions in July 2019 in retaliation against Korea’s Supreme Court ruling that ordered Japanese firms to compensate surviving South Korean victims of forced labor during Japan's 1910-45 colonial rule.

In August that year, Japan removed Korea from its exports whitelist. Korea then lodged a complaint with the World Trade Organization.

Asung plans to open a new mall on Friday. It will increase management efficiency and strengthen online operations through overnight delivery services in addition to existing strong brick-and-mortar operations.

Asung Daiso registered 2.9 trillion won in sales and 239.3 billion won in operating profit last year. It has more than 1,500 stores nationwide.