The other New Year: Can Chinese prop up J-retail?

February 10th, 2010 by Philip Brasor & Masako Tsubuku

Celebrating Chinese New Years at Llaox

Celebrating Chinese New Years at Laox

The sorry state of Japanese department stores has one hopeful sign: Chinese tourists seem to love them, or, at least, the richer tourists do. According to TV Tokyo’s “Business Satellite,” many of Japan’s nicer department stores are directly catering to Chinese visitors, who are reacting favorably to the attention by whipping out their Union Pay cards, which qualify them for discounts at a lot of Tokyo retailers, including most of the electronics stores in Akihabara.

And right now is the prime time to catch them since it’s Chinese New Year when Chinese people traditionally open their purses and spend big. If you go to the Laox Duty Free store on Akihabara’s main drag you’ll see tour bus after tour bus pull up in front and disgorge happy shoppers from the mainland, Hong Kong, Taiwan and Singapore.

It’s more than just the duty-free aspect that brings them to Laox. The company went through a thorough reorganization last year that involved the closing of most of its suburban branches and a hefty investment from a Chinese company. In fact, the president of Laox is now Chinese, and he’s made sure that every tourist who comes to Japan has the Akihabara store on his or her itinerary. Since the store reopened in October, sales have been very good, since the buyers have focused on merchandise that specifically target Chinese rather than Japanese.

Though Chinese only account for about one-eighth of the tourists who come to Japan, their numbers have remained steady over the past several years while the overall number of visitors has decreased. Moreover, the amount of money they spend while they are here has increased over time, and is generally higher than it is for other nationalities. The average foreign tourist spends about ¥80,000, while the average Chinese tourist spends double that.

That’s why some people in the Japanese government want to loosen visa conditions for Chinese, who, if they aren’t coming here on group tours, now have to provide evidence that they make at least 250,000 yuan (¥3.3 million) a year and have to reapply every time they come. The most likely solution would be to make a multiple-entry tourist visa.

The stakes are high. Most commentators believe that the land ministry’s goal of increasing the number of all visitors to 25 million in 10 years’ time is way too ambitious, but if they did accomplish such a feat it would translate into ¥10 trillion in income and about 560,000 new jobs.

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