<article><p>Japanese furniture retailer Nitori and discount store chain Don Don Donki are expanding in Southeast Asia, offering affordable, hard-to-find quality products to win the heart of consumers here.</p></article>

<p>Japanese furniture retailer Nitori and discount store chain Don Don Donki are expanding in Southeast Asia, offering affordable, hard-to-find quality products to win the heart of consumers here.</p>
<p>Their push comes as department stores — long known as the face of Japanese retail — scale back operations in the region.</p>
<p>&#8220;I found out about Nitori through my daughter&#8217;s Instagram. I like their quality and design,&#8221; said a 50-year-old customer who walked into Nitori&#8217;s new store in Kuala Lumpur right after its grand opening. Having recently renovated his kitchen, the shopper enthusiastically browsed the store&#8217;s private-label products, which account for more than 90% of its offerings.</p>
<p>Nitori is an anchor tenant of the huge LaLaport mall opened Thursday by Japanese developer Mitsui Fudosan in the Bukit Bintang fashion and entertainment district. LaLaport&#8217;s combined floor space spans 82,600 sq. meters.</p>
<p>Malaysia&#8217;s relatively young population and growing economy have led to an expanding urban middle class. Malaysian consumers trust Japanese products, and the market offers &#8220;very strong potential,&#8221; a Nitori spokesperson said.</p>
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<p>Parent company Nitori Holdings plans to open 20 locations in Malaysia over the next five years, including a second shop this summer. It also will branch out to neighboring Singapore, opening the first location in March with a target of 10 stores in five years.</p>
<p>Nitori procures many of its private-brand items from Southeast Asia. To stock its new and envisioned stores, the company will tap a production and supply chain in the region that it has built since the 1990s.</p>
<p>Though Nitori has several overseas locations, mostly in mainland China and Taiwan, they make up just 3% of overall store sales. The furniture retailer regards Southeast Asia as crucial to its goals of having 3,000 locations worldwide and generating 3 trillion yen ($26.3 billion) in sales by 2032.</p>
<p>Don Don Donki parent Pan Pacific International Holdings is boosting its presence in Singapore, saying this month it will open its biggest store in the city-state inside the Jewel shopping complex at Changi Airport by March 2023. The company expects a rebound in travel by then, seeking to attract international flyers with layovers.</p>
<p>Don Don Donki, called Don Quijote in Japan, sells not just the quirky household items for which it is known but also food such as bento lunchboxes, ready-to-eat side dishes, sushi, Japanese-grown vegetables and sake. After opening its first Southeast Asian location in Singapore in 2017, the company has built its presence in Malaysia and Thailand, attracting fans.</p>
<p>&#8220;I always find something new at a Don Don Donki store,&#8221; said a Singaporean woman in her 40s.</p>
<p>Pan Pacific International boasts a procurement network featuring its members-only organization created in October 2020. It buys products straight from Japanese farmers who seek to export their produce and sells them at its Southeast Asian stores.</p>
<p>The company aims to increase its store tally in Southeast Asia to around 20 by mid-2022 from 18 this month, on the way to boosting overseas sales roughly sixfold to 1 trillion yen by June 2030.</p>
<p>The growth of Nitori and Don Don Donki contrast starkly with the struggles of Japanese department store operators, which had enjoyed strong business in Southeast Asia since the 1980s.</p>
<p>At Singapore&#8217;s suburban Parkway Parade mall, an Isetan store is conducting a closeout sale ahead of its last day of business in March. Parent company Isetan Mitsukoshi Holdings shut a location in western Singapore in March 2020 and closed a Bangkok store in August the same year. A store in the suburbs of Kuala Lumpur is also set to close in April.</p>
<p>Compatriot Tokyu Department Store also exited Thailand in 2021, leaving Takashimaya as the only Japanese department store in the country.</p>
<p>Local players are struggling, too. Robinsons, founded in Singapore in 1858, shut four outlets in Singapore and Malaysia by January 2021 and liquidated before a makeover as an online mall later that year.</p>
<p>E-commerce platforms such as Lazada and Shopee outperform department stores in pricing, convenience and product offerings, said Kapil Tuli, professor of marketing at Singapore Management University. Even before the pandemic, increasingly fewer products could be found only at department stores, he noted.</p>
<p>Consumers who have purchased goods and services online are on the rise, totaling 350 million in the six major economies of Southeast Asia, up 20% from before the pandemic, a report by Google and Temasek Holdings shows. Coronavirus-related restrictions at bricks-and-mortar stores are boosting online shopping further.</p>
<p>The trend is forcing property management companies to alter strategies for finding mall tenants. Australia-based Lendlease is looking for stores that can offer unique experiences and concepts not available on online platforms, said Jenny Khoo, head of asset operations in Singapore.</p>
<div id="AdAsia"><em>The article was first published on <a href="https://asia.nikkei.com/Business/Retail/Japan-retailers-Nitori-and-Donki-speed-Southeast-Asian-push">Nikkei Asia</a>.</em></div>
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Nitori plans to open 20 locations in Malaysia over the next five years, and also branch out to neighboring Singapore.

Japan retailers Nitori, Donki hasten SE Asia expansion amid e-commerce onslaught

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Japan retailers Nitori, Donki hasten SE Asia expansion amid e-commerce onslaught

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