Weaker yen boosts luxury sales in Japan
The luxury market in Japan is seeing a boost in sales due to the weakening yen and an increase in foreign tourism. Major brands like Louis Vuitton, Gucci, Dior, and Manolo Blahnik are experiencing record sales in department stores across the country.
Sales in Takashimaya, a department store in Shinjuku, are almost 1.5 times more than in 2019, contributing to LVMH's sales growth of 31% in Japan.
Although the Japanese local market has seen growth, most of the luxury market growth in Japan is from foreign tourists, and sales to foreigners make up about one-third of sales for market leaders such as LVMH and Kering. Louis Vuitton is the highest-selling luxury brand in Japan, with sales double that of its closest competitor, Hermès. To invest in this growing market, LVMH is focusing on providing better services and marketing in Japan.
While the number of foreign visitors to Japan has decreased from 26.9 million in 2019 to 19.9 million in the first ten months of 2020, high-end travellers from the US, the Middle East, and other parts of Asia are still visiting Japan for its luxury amenities. Matsuya, a department store in Japan, has seen an increase in duty-free sales, with buyers from Taiwan, Hong Kong, and the US filling the gap left by Chinese tourists. Although Chinese tourists accounted for 47% of Matsuya's tax-free sales in the first half of 2020, they are quickly regaining lost ground, especially as those coming tend to be bigger spenders. Matsuya is using WeChat to market its products to mainland Chinese tourists, and it plans to offer a personal shopping service soon. LVMH is also investing in in-store appointments and tapping into Japanese traditions to cater to this growing market.
