Last year's sales for Daiso, a uniform-price household goods store known as '1000 won happiness,' approached 4 trillion won. The rise in demand for cost-effective (performance relative to price) products due to high inflation was the cause. Accordingly, the profits for related parties, including the owner, also surged.
According to the Financial Supervisory Service on the 16th, last year, Asung Daiso, the operator of Daiso, recorded sales of 3.9689 trillion won, an increase of 15% compared to the previous year. During the same period, operating profit rose 42% to 371.2 billion won, and net profit increased 24% to 309.4 billion won. The company distributed dividends totaling 60 billion won twice last year, marking the first dividends since 150 billion won in 2016.
Analysts have indicated that Daiso's growth is a result of increased demand for cost-effective products due to high inflation. Notably, the growth in operating profit was remarkable. Daiso explained that the increase in sales and the decrease in the cost of sales due to economies of scale had an impact. Additionally, the rise in sales of high-margin cosmetics was likely also effective.
Due to Daiso's strong performance, Asung Group continued its profit streak. Asung Group's governance structure follows Asung → Asung HMP → Asung Daiso.
As of the end of last year, the largest shareholder of Asung Daiso is Asung HMP, which holds 76% equity. This company is a 100% subsidiary of Asung, the top holding company of Asung Group, and it is reported that Chairman Park Jeong-bu of Daiso and his two daughters hold 100% equity. In late 2023, after acquiring and retiring all shares (34.21%) held by Japanese company Daiso Sangyo, the second-largest shareholder, for 535.2 billion won, the equity percentage of the largest shareholder increased.
Asung HMP and Asung purchase goods domestically and internationally to supply Asung Daiso. According to last year's audit report from Asung Daiso, the company purchases about 40% of its total products from the two companies. Last year, the sales for Asung HMP and Asung (on a separate basis) were 861.3 billion won and 286.3 billion won, respectively, reflecting increases of 9% and 13% compared to the same period the previous year.
With Daiso's strong performance leading to increased equity method profits, the net profits for Asung HMP and Asung increased by 52% and 44%, respectively. Equity method profit refers to the profits reflected by a parent company's share of its subsidiary's net income. For both companies, net profit exceeded operating profit. Last year, Asung HMP reported operating profit of 43.1 billion won and net profit of 267.8 billion won, while Asung reported operating profit of 5.1 billion won and net profit of 271.0 billion won.
As of last year, the number of products sold at Daiso exceeded 30,000. Daiso develops over 600 new products each month, largely supplied by domestic small and medium-sized manufacturers. This has led some to criticize that Daiso, which sells uniform-priced products, is expanding transactions among related parties rather than dealing directly with suppliers to reap profits.
In response, a representative of Asung Daiso noted, "Asung and Asung HMP are specialized companies that import goods from overseas for domestic sales and exports, and most of the transactions involve overseas products," adding, "Asung Daiso directly sources products from over 600 domestic small and medium-sized manufacturers to maintain uniform pricing."
Both Asung HMP and Asung are led by CEO Park Young-joo, the second daughter of Chairman Park Jeong-bu, born in 1979. CEO Park is also an internal director of Asung Daiso. Founder Park Jeong-bu resigned as CEO in March 2022 and stepped back from active management, prompting industry focus on the timing of the second-generation succession.
A representative of Asung Daiso stated, "Currently, we are operating under a professional management system led by CEO Kim Gi-ho. We plan to maintain this system for the time being."