Don Quijote (PPIH) is successfully navigating the challenges of a weak yen by strengthening its unique, centrally-managed direct import strategy.
For a long time, especially since 2024, the Japanese yen has been weak, recently hovering around 157 to the US dollar. This makes imported goods more expensive, which is a major challenge for a discount retailer like Don Quijote, famous for its 'kakuyasu no dendo' or 'Palace of Amazing Low Prices'. Maintaining low prices becomes much harder when your sourcing costs are rising due to currency effects.
To combat this, Don Quijote established the 'World Select Division' in late 2024. This team's mission is to find trendy, low-cost products from all over the world and bring them to Japan. The process is a clear causal chain. First, they identify viral trends, like a 'peelable banana bread' that became a hit on Korean social media. Second, they find an OEM (Original Equipment Manufacturer) in a low-cost country like China to produce the item at scale. Third, by importing directly in massive quantities, they cut out middlemen and significantly reduce the final cost.
This strategy is already showing impressive results. Products like the banana bread and an ASMR-inspired chocolate-marshmallow snack priced at just ¥420 (about $2.66) are big hits. This price point is nearly 50% cheaper than typical imported snacks, allowing Don Quijote to keep its low-price promise even with a weak yen. The success is reflected in their finances, with sales growing 7.2% and profits jumping over 18% in the first half of fiscal year 2026.
Two other major factors support this strategy. One is the boom in inbound tourism, with a record 42.7 million visitors in 2025. These tourists flock to Don Quijote for unique and affordable souvenirs, which is exactly what the World Select division provides. Another is the ongoing uncertainty about the Bank of Japan's policies, which suggests the yen's volatility may persist. This makes Don Quijote's ability to control import costs a powerful, long-term competitive advantage.
- OEM (Original Equipment Manufacturer): A company that produces goods that are sold under another company's brand name. It allows for cost-effective mass production.
- Weak Yen: A situation where the Japanese yen has a lower value compared to other currencies. This makes foreign goods more expensive to buy in Japan but makes Japanese exports cheaper for foreigners.
- Inbound Tourism: Refers to international tourists visiting a country. A high level of inbound tourism boosts sales for retailers, especially those popular with visitors like Don Quijote.