Japanese airport corporations to compete for Chinese tax-free shoppers with downtown stores

Japanese airports are facing increased competition from downtown tax-free shops for tourist shopping, as the Japanese government target of 10,000 tax-free shops by 2020 has already been reached and with the number of shopping-oriented tourists from China rapidly increasing in their arrivals to Japan.

Japan changed its regulation in regards to tax-free shopping on October 1, allowing goods such as food and cosmetics to also be sold tax-free to foreign visitors – resulting in a large increase in the number of department stores, retailers, and even convenience stores selling items tax-free to tourists.

According to the Japan Tourism Agency, 38.5% of all tourists to Japan purchased cosmetics and pharmaceuticals, spending ‎¥20,270 (€153) on average on this recently tax-free product segment alone. Far higher than the average, as many as 68.4% of Chinese tourists purchase these types of products in Japan, and also spend a much larger average amount of ‎¥34,521 (€260) on cosmetics and pharmaceuticals. In fact, Chinese tourists boosted the overall Japanese economy by 0.1% during the Golden Week alone, with Chinese visitor numbers to Japan increasing rapidly.

In response to this recent development, Japanese airport corporations are now considering to open their own downtown stores to better compete for tax-free shoppers. With Chinese tourists preferring to shop in tax-free stores by a large margin when abroad, this is identified as a key area to expand in order to acquire a larger share of Chinese tourist expenditures.

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Source: TRBusiness

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