TOKYO — A stronger yen and a hike in Chinese import duties is biting into Japan’s retail business, making it a less attractive shopping destination for foreign tourists.
The Japan Department Stores Association said its members’ sales to international tourists slid 9.3 percent in April to 17.9 billion yen, or $162.89 million. This marked the first month since January 2013 that sales to international visitors has fallen.
Foreign tourists, especially those from China and elsewhere in Asia, have been a boon to Japanese stores over the past few years, helping to compensate for lackluster spending on the part of domestic Japanese consumers over the same time period. A weak yen has helped lure Chinese tourists from other destinations, including Hong Kong.
Overall, April sales among the 236 department stores in Japan were down 3.8 percent on the year, coming in at 453.64 billion yen, or $4.13 billion.
The numbers did indicate that tourists are still coming to Japan — they are just spending less once they arrive. The number of overseas visitors making purchases at Japanese department stores increased by 7.8 percent year-on-year in April to roughly 260,000, according to the data.
As reported, the yen’s recent rise is bad news for a country trying to lure cash-rich shoppers and it is also denting Japanese companies’ earnings. The yen has depreciated more than nine percent in value against the dollar since the start of the year and currently trades around 109.50.
Meanwhile, China has just implemented a new taxation system for products purchased overseas that are brought into mainland China.
Some observers have said the new tax regime is an effort by the Chinese government to close a loophole through which so-called “daigou” agents and parallel importers had been able to operate for years, essentially paying very little tax on the goods they buy overseas and ship back to Chinese consumers, who purchase them on consumer-to-consumer platforms such as Taobao, or on WeChat shops.