Retailers with ties to China, like Temu and TikTok Shop, have gained popularity in the US. Now, a wave of Japanese-based retailers and retail concepts has come to the US, signaling a potential shift for the retail landscape.

• Japan-based online resale marketplace Mercari opened its first physical store in the US, offering a curated collection of Japanese items including men’s and women’s fashion, sneakers, designer handbags, toys, electronics, and collectibles.
• Daiso, a Japanese discount retailer, plans to expand its presence in the US after receiving numerous requests on social media to open more stores, per Fast Company.
• Some 7-Eleven US locations will start stocking Japanese-inspired food options like chicken teriyaki rice balls, miso ramen, and sweet chili crisp wings, per Business Insider.

Why we care: Both Temu and TikTok Shop quickly found success in the US.

• Nearly half (46.4%) of US marketplace buyers made a purchase on Temu in the past six months and over a fifth (20.2%) made a purchase on TikTok Shop, according to a June 2024 EMARKETER survey.
• Temu is the most popular marketplace among Gen Z and millennial shoppers, with more than 52% of marketplace buyers making a purchase on the platform within the last six months.
• What do both platforms have in common? A vast selection of goods at very low prices.

Mercari and Daiso could be following in their footsteps, especially as cross-border ecommerce continues to grow.

• There will be 81.1 million cross-border ecommerce buyers in the US this year, making up over a third (36.5%) of digital buyers, per our forecast. This is up from 65.5 million in 2021.
• While Daiso only has physical locations in the US, it operates an ecommerce site in Japan, which it could expand to the US.
• In addition to its brick-and-mortar store, Mercari has given US shoppers direct access to Japanese sellers, allowing shoppers to purchase hard-to-find or rare items from Japan.

The bottom line: Mercari and Daiso are still in the early stages of their US expansion, particularly when it comes to physical retail. However, if one thing can be learned from the explosion of Temu and TikTok Shop, it’s that it doesn’t take long for consumers to hop on the bandwagon—if the price is right.

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