Korea's Stationery Industry Sinks into Losses Amid Daiso Pressure

Korea's Stationery Industry Sinks into Losses Amid Daiso Pressure

Declining School-Age Population Weighs on Demand Low-Price Offensive from Major Retailers Hits Hard Morning Glory and Peers See Losses Widen "Support Needed for Companies Pivoting Businesses"

Korea's traditional stationery companies are sinking into the red as a sharp decline in the school-age population compounds the pressure from Daiso's low-price offensive. Stationery firms are seeking breakthroughs in cosmetics, furniture and digital devices, but have yet to produce meaningful results.

According to regulatory filings on the 20th, domestic stationery companies including Monami (005360.KS), Alpha, Morning Glory and Dong-A Pencil posted operating losses last year, continuing their deficit-ridden operations. The results are attributed to a combination of factors, including shrinking stationery demand from the falling school-age population, higher investment costs for new businesses, and persistently high prices, interest rates and exchange rates. According to the National Data Agency's "Future Population Projections," the school-age population stood at 5.94 million last year, down 21% from a decade earlier.

The rise of major retailers such as Daiso and Coupang has also dealt a heavy blow to the stationery industry. Industry insiders argue that these retailers treat stationery as "loss leaders" to draw in customers, selling them at ultra-low prices and disrupting the overall pricing and distribution order in the sector.

Monami recorded sales of 131 billion won ($96 million) last year, roughly in line with previous years, but its operating loss widened to 5.9 billion won from 3.8 billion won a year earlier. Alpha posted sales of 84.9 billion won and an operating loss of 2.1 billion won last year. Dong-A Pencil swung from a 100 million won profit in 2023 to a 300 million won loss in 2024, and then posted a 1.6 billion won loss last year. Morning Glory, which closes its books on a half-year basis, recorded sales of 38.1 billion won from July 2024 to June 2025, down 6.3% from a year earlier. The company posted an operating loss of 770 million won over the same period, with the deficit widening.

To break through the crisis, stationery companies have plunged into new businesses, but conditions remain challenging. Monami established Monami Cosmetic in January 2023 and entered the cosmetics business. Sales grew from 300 million won in 2023 to 2 billion won in 2024 and 3.9 billion won last year, but net losses also swelled to 3.2 billion won, 4.5 billion won and 4.8 billion won, respectively. "We plan to build a stable profit structure by focusing on core categories and expanding into global markets," a Monami official said.

Morning Glory also entered the hygiene products market for the first time in December 2024 with the launch of "Honest Premium Tissue." Last month, the company entered the furniture market for the first time by unveiling its M301 and M501 office and home chair series. "The new school term is the peak season for the stationery industry, but there has been no recovery this year either," a Morning Glory official said. "The hygiene products business has taken root, and we are planning three chair models to expand the furniture lineup."

Experts said companies need to make their own efforts to expand their consumer base, while the government also needs to support firms attempting to transition their business lines. "Domestically, the industry needs to broaden its consumer base beyond teenagers to adults and seniors, and expand exports to emerging countries in Southeast Asia and elsewhere where the population structure has not yet aged," said Noh Min-sun, a research fellow at the Korea Small Business Institute. "Support for business restructuring or transitions by stationery companies in response to demographic changes needs to be strengthened."