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A Cult Japanese Retailer Making Billions Breaking All the Rules

187 points| pseudolus | 7 years ago |bloomberg.com | reply

140 comments

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[+] gryson|7 years ago|reply
I think it's important to point out: There is large variation between different locations of Donki. As the article states, floor staff have a large say in what is sold at each location.

If you go to a location in a crowded tourist spot, then most of the customers are going to be tourists, and the selection of items will reflect that (more throw-away crap). At the Dotombori location in Osaka, for example, it felt like almost every customer there was speaking Chinese, and the staff also spoke Chinese.

Out in more rural areas, in my experience, people primarily shop there for discounted household items. The more bizarre items (and sex toys) seem limited to the urban locations. There is a degree of dichotomy between the two that is worth keeping in mind.

[+] kochikame|7 years ago|reply
It really is one of the worst examples of a retailer anywhere. Shelf after shelf of semi-disposable, plastic tat, destined for landfill. Crap, processed food. Knock off cosmetics. Crowded, uncomfortable, unfriendly.

If this is the future, I don't want it.

[+] beetwenty|7 years ago|reply
I've heard it compared to Walmart in the USA, and having visited both chains, I can see the resemblance, even if it's not obvious at the surface. Walmart's layouts are "big box", designed for automobile users who will carry their purchases to the parking lot. Donki's layouts are compact, for people who will take their purchases(most of them, anyway) onto public transit. Everything else about both stores is built around the premise of a broad selection of low-end goods at low prices.

They are not beautiful, but I am fascinated by these chains as a phenomenon, nonetheless.

[+] byproxy|7 years ago|reply
>destined for landfill

I've always referred to crap at discount stores as "future garbage." Sure, that's end-of-the-line for most things, but these discount stores peddle stuff with an exceptionally short useful life. Especially targeted towards kids, I feel! I guess it's easier for a parent to give in to a child's wants when the toy is only a buck.

[+] yoube|7 years ago|reply
I guess it really depends on the actual location. The one I went to in Iwate was awesome, not multi-storey but a one-floor, jungle-like layout. Very good food section, bought a rug, travel neckpillow, and some crockery, I'm still using them now after months.
[+] the_af|7 years ago|reply
It's the one store/retailer I didn't find interesting at all while visiting Japan.

I have to confess that, in small doses (so as not to lose my sanity), I sort of enjoy the all-sorts-of-random-crap stores. I could spend unhealthy amounts of my time in those 100 Yen stores (or whatever they are called, I might be misremembering their names).

But Don Quijote was just garish and uncomfortable. It was even difficult to walk the aisles. Everything about it screamed to me "get out of here fast!". I can't understand how it is successful.

PS: while on the subject of these crap/budget stores, can someone from the US tell me if my hunch is right about the following? While visiting the US I discovered those Five Below stores (everything between $1 and $5) and I think I figured their trick: while the advertised price range is true, this doesn't mean what they sell is actually cheap! For example, I'm pretty sure I saw Hot Wheels cars at about $3 when everywhere else the same toys were near $1. Am I missing something?

[+] MisterTea|7 years ago|reply
I live in NYC and this sounds exactly like what we call a '99 cent store'. They became super popular in the late 90's and 00's and sprang up everywhere. They are usually small mom and pop shops in local neighborhoods.
[+] spinach|7 years ago|reply
Crowded and uncomfortable? I never really felt it was that bad. I lived in Hyogo-ken and would sometimes stop in at one on my way home from university. It was a fun place to be, a sensory overload perhaps though you get used to it pretty quickly. I usually just bought snacks there, a halloween costume... It's like an upgraded dollar store.
[+] eru|7 years ago|reply
Oh, you are going to 'love' Daiso then. Everything 200 Yen. (Or 2 SGD where I live.)
[+] hrktb|7 years ago|reply
How do you solve a shop being crowded (= successful basically) ?

The uncomfortable and usually unsafe part is something that could be worked on, but otherwise it has tremendous value for single purpose products or appliance where required quality level is extremely low (e.g. takoyaki sets).

It straightly goes against the romantic “buy it for life” idea, but I think asking people to care about every single stuff they buy is a tall order anyway.

[+] benbojangles|7 years ago|reply
You're describing Donki within dense tourist areas, further out they become still-mad-yet slightly more standard fare.
[+] hourislate|7 years ago|reply
I agree, it makes the dollar store in the USA feel like a high end retailer. They sell absolute junk. Things you would find in the garbage that other stores might throw out.
[+] covercash|7 years ago|reply
It sounds a bit like Five Below here in America.
[+] megy|7 years ago|reply
It is a discount store, that is what they have.
[+] mc32|7 years ago|reply
These look like a more corporate version of your regular "百貨公司".
[+] chrisseaton|7 years ago|reply
Sounds like Ikea. People buying cheap nasty furniture to last three years when it should last a couple of lifetimes.
[+] tokyodude|7 years ago|reply
Donki actually has plenty of useful stuff. The quality might be cheap but I lived in a mostly donki furnished apartment for 6 years. Bookshelves, kitchen table, lots of utensils, no issues. I've also bought lots of foodstuffs, some clothing, stationary, and lots of toiletries and cleaning supplies.

If you want a company that makes completely useless landfill stuff see Flying Tiger from Sweden. That store is nothing but trash and deserves your wrath far more than donki

[+] detritus|7 years ago|reply
I absolutely despise Flying Tiger and its array of absolutely useless one-time use non-recyclable plastic-glitter-trash and am perversely gladdened by its spread across Europe as it means my partner can no longer use it as a one-stop shop for last minute gifts, as the recipients now have a branch in their town so she'd be caught out.

As an aside, it's from Denmark, not Sweden - either/or would be surprising to me - my ignorant British perspective is that Scandies tend to be more Calvinistically-prudent and Gaia-centric and not beholden to landfill crap.

[+] hugg|7 years ago|reply
Hey! Flying Tiger is actually from Denmark.
[+] jpatokal|7 years ago|reply
No discussion about Don Quijote can be complete without the theme song playing in the background: https://www.youtube.com/watch?v=iJyYrrDKYZE

This plays on continuous loop at all stores.

[+] eru|7 years ago|reply
They have an English version in Singapore. They relented on the continuous loop, but you still hear it quite often.

They also have hilariously bad Engrish on their in-store signs. I assume it's deliberate, because anyone I talked to there speaks English just fine.

The baked yams the article mentions are really super popular here, too.

[+] gabaix|7 years ago|reply
I visited a Don Quijote for my first night in Japan. I went for a stroll at 3am as I was jetlagged. I stumbled upon one Don Quijote. The music was playing very loud among the empty aisles. I stayed there for a while, completely bemused by the sheer level of noise and lighting.
[+] hn_throwaway_99|7 years ago|reply
Continuous loop? I feel for their employees' sanity.
[+] rladd|7 years ago|reply
The Don Quijote I go to sometimes in Asakusa plays only the first 26 seconds of that on a continuous loop.

It's maddening.

[+] SmellyGeekBoy|7 years ago|reply
Definitely not unique to Donki though. Loft do it too (FWIW I love their theme song, it's ridiculously catchy).
[+] CapricornNoble|7 years ago|reply
To me they are like a bizarre Japanese take on a Wal-Mart. Prices are cheap, the aisles are narrow, there's tons of Chinese-made crap, but they also have really inexpensive food too (steaks that are gigantic by Japanese standards....I think mostly imported American meat, pumped full of hormones and whatnot).

I like to go there at 2am (no traffic = short travel time) to buy food, or maybe some small tools (socket wrenches, etc..) that I need while working on my cars at night or even radiator fluid. You can also go earlier in the evening (around 7-9pm) and scope out the makeup section, try some "nanpa" with the kabakura girls before they head to work.

Between Aeon MaxValu (supermarket), DonQ, and Family Mart convenience stores, you have access to easily 90% of the consumable products you might need in a typical month, and available 24/7. Clean stores with all-hours convenience like this are one of the highlights of living in Japan compared to some other places in Asia. Ttry buying batteries at 2am in Hanoi...

[+] bemmu|7 years ago|reply
I've been witnessing a new store being built very near to our house.

A typhoon tore away the sign of a pachinko place near us (it hit a nearby building), and apparently instead of fixing their store they decided to close it down and sell the building to Don Quijote.

Seems like a good match for them, as the pachinko place is huge, with 6 wide floors that used to be gambling machines shoulder-to-shoulder, but I guess will now be tightly packed cheap goods instead.

Everyone here is excited by it, as we have no interesting stores otherwise nearby. The first I heard the rumors was from wife's barber, and they quickly spread and other random people started telling me about the new store.

[+] harisenbon|7 years ago|reply
We had a similar thing happen in our town -- pachinko place went bust, and they bought it.

Next town over they bought an old local supermarket (again, with huge amounts of floor space)

[+] ggm|7 years ago|reply
I had the best time in this store in Ikebukuro. It is a bit trashy, but what a rats-nest of wierd. Bought a pikachu makeup/cleanser face mask for somebody, they wore it for christmas and looked like a zombie...

The traditional 100yen shoppe is more my speed, but this place is where you need to be, if its random gift time, as long as neck-pillows for airlines and trains, in the shape of a crotch with red undies are your idea of a random gift.

[+] vmlinuz|7 years ago|reply
I've been into these shops a couple of times when traveling in Japan, and while I mostly didn't end up buying much, they're definitely a lot of fun to browse.

I like Muji, I like Daiso (branded as Living Plaza here, and which I always describe to people as "what if Muji did a pound shop?") and I'm looking forward to the first Don Quijote store opening in Hong Kong later this year!

[+] distantaidenn|7 years ago|reply
While not explicit, I do get the sense that they are trying to glamorize these atrocious stores. If you are American just imagine a 6 story "Big Lots!" that happens to also sell designer bags and sex toys.

Those stores are a mess inside and I can only imagine make a profit because they sell everything. In central Tokyo, most of them are just tourist traps at this point.

[+] c3534l|7 years ago|reply
This makes me feel good about my life's goal of starting a parody store of Linens 'n Things called Batteries and Shit that just sells random crap that doesn't really go together.
[+] yoube|7 years ago|reply
> And they come anytime they please, since all locations stay open 24/7

Not quite right, they do open till very late but the one I've been to (in Iwate) closed at around 3 am.

[+] kerorin|7 years ago|reply
As a Japanese individual, Donki is the best store if you wanted to do midnight disappearing act.

Some typical bikes, junky foods and meat and vegetables to energize, a lot of liquor, battery for smartphones, some condoms for emergency, hangers and clothes to live in the new place, travel luggage, most general amenities, lightbulbs, contact lenses, bandage, medicines, and some funny stuffs ... they are all there!

You can also buy an adorable doll named DonPen there during the act. Of course I have it.

[+] rahimnathwani|7 years ago|reply
"Store managers control merchandising, negotiating prices directly with suppliers"

This sounds like it ought to make scaling to different countries difficult. If you don't have a unique supply chain, then what advantage do you have over a mom and pop discount store?

Uniqlo, Muji, and Daiso (which is less well known but has quite a few US stores) seem to source centrally, just like other global retailers.

[+] anthony_doan|7 years ago|reply
> If you don't have a unique supply chain, then what advantage do you have over a mom and pop discount store?

In the article it mentioned those managers dictate what gets on the shelf and mention how they chase after surprise hit (wax nose hair). It seems they're more agile than their competitors and let managers living in those area decides what products to stock.

Perhaps they don't need a unique supply chain?

[+] dwd|7 years ago|reply
Muji is interesting in that many individual stores only carry specific departments (which are listed on the website).

The one in Zest Oike, Kyoto for example was quite small and dominated by a very large selection of socks.

[+] doctorstupid|7 years ago|reply
Whilst possibly overwhelming or discomforting, walking through Donki gives an honest display of consumerism, and manages to make it exciting. Like Walmart, it's essentially an incredible variety of stuff jumbled together. But Walmart is an Amazon warehouse in which the customers do the picking. It's systematic and depressing, and one feels like they might be in an item in a production line. Donki is chaotic, musical and risqué. It's not uncommon to see well-dressed couples on dates swinging tipsily through, because it's somehow conducive to romance, or at the very least, not a very shameful place to be seen. A store will have a variety of atmospheres, not all of them pleasant, but I much prefer the honesty of the chaos to the censored productions of most consumer 'experiences'.
[+] PaulHoule|7 years ago|reply
That's a place I've been to in "VR".

In the Yakuza games you get to go to a Donki store.

If I ever go to Japan there are a few places that I'll have no trouble getting around because I've been all over them again and again in video games.

[+] rum3|7 years ago|reply
It just looks like a regular Chinese bazaar store except Japanese. Do they sell pens that dries out after a few weeks? USB cables that starts glitching after two weeks? Shoes that fall apart after a few days?
[+] newsoul2019|7 years ago|reply
I've been to the one on O'ahu (Hawaii), I thought it was a fun store and great place to buy omiyage(souveniers)
[+] Steko|7 years ago|reply
The Hawaii stores were taken over from Daiei (Japanese supermarket chain) and I don't think they've changed that much, still a different animal from the Japanese Donki stores I've been to. In comparison they've opened a couple Daisos in Hawaii recently and the goods are identical to what you find in any Daiso in Japan.
[+] gwbas1c|7 years ago|reply
> Floor staff should have near-total autonomy to decide what to sell. Store managers control merchandising, negotiating prices directly with suppliers, and decide how to change sales displays...

Does that scale? What's the point of a mega-corp at that point, beyond providing capital to start a local store?