How Inflation Turned Daiso Into a Shopping Destination for Young Koreans

A Small Purchase With a Bigger Appeal

Asung Daiso reported record sales of 4.54 trillion won ($3.1 billion) in 2025, up 14.3 percent from the previous year. Behind that growth is a change in how young South Koreans spend: after years of pressure from rising prices, many are seeking inexpensive purchases that offer both practical value and a little pleasure.

At a Daiso store in Sinchon, western Seoul, college students filled the aisles on a Wednesday evening, carrying baskets through displays of everyday goods and cosmetics. Song Seung-min, a university student aged 26, examined the makeup selection and picked out a lip balm costing roughly $2.

Song described the attraction of being able to choose several things without spending much:

There is something fun about shopping at Daiso," she explains, selecting a lip balm priced at roughly $2. "It makes me feel rich because I can buy all kinds of things without actually spending much.

Her experience captures Daiso's transformation from a dollar store selling household necessities into a destination for browsing, beauty shopping and inexpensive treats. The appeal extends beyond Korean students to foreign tourists, while its growing cosmetics business is bringing it into closer competition with established beauty retailers.

South Korea's consumer price index rose 5.1 percent in 2022. The index measures how prices change across a basket of goods and services that people commonly buy. Inflation slowed to 2.1 percent in 2025, but prices continued to rise, reinforcing the search for purchases that combine affordability with usefulness.

From Spending Nothing to Buying Carefully

Young Koreans in their 20s and 30s have moved away from the strict saving campaigns that spread during the pandemic. In 2022, online communities promoted no-spend challenges and so-called beggar rooms, where participants shared their expenses and encouraged one another to avoid spending.

Song recalled taking part in that effort with her friends:

"Back in 2022, my friends and I used to share our spending with one another and encourage each other to spend less," she notes.

The approach treated restraint as the route to managing financial pressure. The newer pattern, described by economists as small indulgences, allows room for modest purchases that bring satisfaction without requiring a large outlay. Consumers still watch their budgets, but they also weigh how much enjoyment or practical use a product offers.

A December report from 20sLab, based on a survey of 1,200 respondents aged 15 to 55, found that 76 percent of Generation Z consumers prioritized affordable prices. At the same time, 87.6 percent wanted strong product performance. Price matters, but younger shoppers also expect their purchases to work well.

Daiso's appeal fits those two demands. Its inexpensive products make small purchases accessible, while its growing assortment gives shoppers more opportunities to find something they consider worth buying. The change is from cutting consumption entirely to choosing more carefully within a limited budget.

Record Revenue and a Larger Business

Asung Daiso Co., South Korea's leading retailer of household goods at fixed prices, recorded operating profit of 442.4 billion won in 2025, an increase of 19.2 percent. Financial figures filed with the Financial Supervisory Service showed that profit grew faster than sales despite economic headwinds.

Operating profit is the money a business earns from its regular operations after paying operating costs. For Daiso, the stronger increase in profit accompanied a substantial expansion in revenue and its store network.

The company's sales stood at 2.94 trillion won in 2022. By 2025, revenue had increased by more than 50 percent, while operating profit had nearly doubled. Daiso now operates approximately 1,600 stores nationwide, giving its expanded product ranges a large physical distribution network.

The developments described across those years show how the business and its customers have changed:

• In 2022, South Korea's consumer price index rose 5.1 percent, and young consumers participated in strict saving campaigns.
• Also in 2022, Asung Daiso recorded sales of 2.94 trillion won and carried roughly 100 fashion items.
• In February 2025, Daiso's app reached 5.16 million monthly active users, its highest total since launch.
• In 2025, annual sales reached 4.54 trillion won and operating profit reached 442.4 billion won, while consumer prices rose 2.1 percent.

Daiso's business has consequently broadened from basic household shopping into a wider range of lifestyle purchases. Cosmetics and clothing are central to that expansion, giving customers more reasons to visit beyond replacing necessities.

Beauty and Fashion Change the Shelves

Daiso has developed its cosmetics division through partnerships with Amorepacific Corp and LG H&H Co. These arrangements have helped turn its extensive store network into a major platform for beauty products sold at very low prices.

The shelves now include more sophisticated skincare and makeup lines alongside the household basics associated with the chain. Expansion into categories with higher profit margins helps explain its financial performance. A profit margin describes how much of a sale remains after the relevant costs are paid.

Daiso's fashion selection has also grown. Its apparel range expanded from roughly 100 items in 2022 to more than 700 products. The company introduces 600 new fashion items monthly to attract younger customers who follow changing trends.

The frequent arrival of products adds a sense of discovery to visits. A customer coming in for an everyday item can also browse cosmetics or clothing, while shoppers interested in new releases have a reason to return.

The wider assortment is part of the retailer's shift toward destination shopping. With an estimated range of more than 30,000 product varieties across stores, Daiso offers customers the opportunity to explore many categories during a single visit.

Digital Growth and the Search for Dupes

Daiso's growing reach is visible online as well as in its stores. Wiseapp-Retail data showed that its mobile app had 5.16 million monthly active users in February 2025, up 42 percent from a year earlier and the highest usage recorded since its launch.

Monthly active users are people who use an app during a given month. The increase shows a growing digital audience alongside the company's nationwide physical presence. OpenSurvey's 2025 report placed Daiso fifth among major shopping channels, four positions higher than in the previous year.

Beauty shopping has been especially important. OpenSurvey's 2025 Beauty Trend Report found that the share of consumers using Daiso as a channel for cosmetics purchases rose by 9.2 percentage points from the previous year. A change in percentage points measures the gap between two percentages.

The rise connects with the popularity of dupes, lower priced alternatives that closely resemble more expensive branded products. Daiso sells Son & Park Arti Spread Color Balm for 3,000 won ($2), offering functionality comparable to Chanel's Lip and Cheek Balm at a fraction of the cost.

Choi Yoo-jin, a student aged 24 shopping at the Sinchon store, had replaced brands she previously bought at department stores with Daiso eyeliner and contouring products. She described how new alternatives had become something to anticipate:

"Now I even find myself looking forward to seeing what kind of dupe product Daiso will come out with next for well-known brand items," she says, having replaced her former department store brands with Daiso eyeliner and contouring products.

For shoppers such as Choi, the attraction combines a familiar type of beauty product with a smaller bill. That fits the broader demand for affordable prices and useful performance found in the 20sLab survey.

Smaller Cosmetics Offer a Lower Entry Price

The growth of miniature cosmetics in Korean beauty retail complements Daiso's approach. Inflation has encouraged consumers to try smaller quantities before committing to a standard size, reducing the amount they need to spend on an unfamiliar product.

Banila introduced foundation portions of 14 milliliters priced at 16,000 won, compared with 34,000 won for standard sizes. Lilybyred offers lip tints weighing 2.5 grams for approximately 8,000 won, compared with 14,000 won for the regular version.

Those examples show how a smaller package can reduce the initial purchase price. For a customer deciding whether a cosmetic suits them, a miniature provides a way to try it before paying for a larger amount.

Search activity also reflects interest in smaller beauty products. On platforms such as Ably Corporation, searches for "mini shadow" rose 440 percent between October periods. Zigzag recorded an 817 percent increase in searches for "mini lipstick".

Daiso's inexpensive cosmetics and the broader miniature trend address a similar consumer preference: access to beauty products without a large initial expense. They offer different ways for shoppers to experiment while keeping control of spending.

Browsing Becomes Part of the Purchase

An OpenSurvey study of 1,069 recent Daiso visitors found that 29.1 percent entered stores simply to browse or pass the time. Another 89.2 percent said they habitually checked particular sections even when they had no intention of making a purchase.

The findings help explain why Daiso increasingly functions as recreation as well as a place to run errands. Its large assortment and product displays give visitors something to explore, and an inexpensive item can become a small reward at the end of that visit.

Jung Yoo-ra, a college student aged 25, described how trying products and looking through the cosmetics selection could turn browsing into buying:

The stores make it easy and enjoyable for customers to try out products, so people naturally end up staying longer," she observes. "There is such a wide variety of cosmetics that you almost always end up buying one or two. That kind of small shopping is part of the fun.

Kim Woo-hyuk, a professor in the consumer science department at the University of Incheon, described the behavior as a form of consumption guided by personal choice and spending limits:

For young people, this is partly an expansion of a self-directed culture of consumption that seeks both enjoyment and utility within the limits of self-control," he explains. "Rather than merely reducing expenditure, they apply increasingly strict standards to judge whether a purchase is justified and how much utility it delivers.

Kim's explanation brings together the financial and recreational sides of Daiso's growth. Young consumers want enjoyment, but they are also judging purchases against stricter standards of usefulness and cost.

Tourists Follow the Value Shopping Trend

Foreign visitors have also changed their shopping patterns in South Korea, moving away from luxury duty-free outlets toward retailers offering better value. Figures from the Korea Duty-Free Shop Association put tax-free consumption per foreign visitor at 1.43 million won in 2025, compared with 25.55 million won in 2021.

The decline accompanied the end of the era dominated by Chinese bundle merchants and bulk purchases. Daiso experienced movement in the opposite direction: its foreign sales surged 300 percent in the pandemic year of 2022 and grew another 130 percent in 2025.

Foreign visitors now account for more than half of customers at the Myeongdong headquarters and Myeongdong Station locations. The figures place tourist demand alongside spending by young Koreans as another part of the retailer's growth.

Olive Young has seen a parallel increase. Its tourist sales rose 1,710 percent in 2022 and another 660 percent in 2025. Grace, an American tourist aged 16 visiting from New York, described discovering the beauty retailer through social media while filling a basket with Korean body washes:

I got to know Olive Young through TikTok and Instagram in the United States," she says while filling her basket with Korean body washes. "When I actually came here, I liked it because it was much cheaper than in the United States.

Olive Young, Daiso and fashion retailer Musinsa have become a shopping trio known as Ol-Da-Mu. Promoted across social media platforms, they are now essential stops for many visitors, replacing itineraries centered on department stores and duty-free shopping.

The tourist shift reinforces the appeal of value retail. Visitors are seeking Korean beauty and fashion products at accessible prices, while domestic shoppers are pursuing inexpensive products that fit tighter budgets.

Competition and Scrutiny Grow Together

Olive Young faces pressure from Daiso's expansion in physical beauty retail and from Coupang's e-commerce business, including its Rocket Delivery service. The overlap is bringing businesses once associated with different shopping needs into closer competition.

Kim Joo-deok, a professor at Sungshin Women's University, described the pressure on Olive Young's established position:

"Olive Young had a dominant position in Korea in terms of its offline market presence, but Daiso's emergence as a competitor by selling budget-oriented cosmetic products put Olive Young in a tough position," he observes.

Olive Young has pursued international expansion, establishing a subsidiary in Los Angeles in the United States. That move comes with uncertainty about tariffs under the Trump administration, adding a further consideration as the retailer looks beyond Korea.

Musinsa Standard is competing for the same consumers concerned about inflation. It has opened 23 shop-in-shop stores nationwide near Uniqlo locations. These stores operate within another retail setting, placing the brand close to an established clothing competitor.

The Fair Trade Commission has also launched investigations into Olive Young and Asung Daiso over potential violations of the Act on Fair Transactions in Large Retail Business. The inquiries examine whether the retailers' market power disadvantages suppliers. No outcome or decision date was given.

Supplier relationships matter to a business built around a broad assortment and low prices. As Daiso expands its role in cosmetics and other categories, the investigations bring attention to how large retailers deal with companies that provide their products.

Asung Daiso has responded to growth by strengthening its logistics systems and store network to maintain stable supplies. Its model depends on selling large volumes of goods at low margins, making reliable distribution central to keeping shelves stocked.

The company plans to continue management focused on customers and affordable quality. Across beauty, fashion and household goods, the convergence of value retailers points toward a lasting restructuring of Korean shopping, with value taking precedence over prestige branding.

The Bottom Line

• Asung Daiso's 2025 sales reached 4.54 trillion won ($3.1 billion), up 14.3 percent, while operating profit rose 19.2 percent to 442.4 billion won.
• Young Koreans are moving from strict saving challenges toward small purchases that combine affordability, enjoyment and practical use.
• A 20sLab survey found that 76 percent of Generation Z consumers prioritized affordable prices and 87.6 percent wanted strong product performance.
• Daiso operates approximately 1,600 stores, and its app reached 5.16 million monthly active users in February 2025.
• Cosmetics partnerships, inexpensive alternatives to premium beauty products and a larger fashion range are broadening its appeal.
• Daiso's foreign sales rose 130 percent in 2025, while tourists increasingly included Daiso, Olive Young and Musinsa in their shopping plans.
• The Fair Trade Commission is investigating Olive Young and Asung Daiso over potential violations of rules governing large retailers' dealings with suppliers.