Japanese retailers are slowly realizing that because of the current upsurge of the country’s economy, there might be a hot new demographic to sell their products to – foreign tourists. The Japanese government’s push toward tourism, its heavy promotion of the country, and lately – a weaker yen, has caused the number of inbound tourists to Japan to increase to almost double in the past decade, top 10 million for the first time last year. And in 2013, they spent $14 billion on Japanese products – from powdered green tea to Prada handbags, to rare red-coral rings.
This gradual influx of tourists has Japanese retailers taking notice, especially with the Tokyo Summer Olympics seen to double the tourist total to 20 million visitors by 2020. The inflow of cash is very welcome for Japanese Prime Minister Shinzo Abe, as he has sought to drag the Japanese economy out of the doldrums and into recovery. This is why local retailers are tweaking their businesses to tap into the “inbound” windfall – working through varied marketing channels from social media to bigger and better street signs. “Until now, we’ve been rather passive with tourists,” said Hideyuki Murakami, executive officer of department store operator Isetan Mitsukoshi Ltd. “But as their numbers surge, we’ll need to really step things up – whether it’s with language, facilities or product selection.”
These tourists seem to spend freely on their trips to Japan. The 1.42 trillion yen (around USD$14 billion) spent by tourists increased by more than 30 percent from the tourist spending data from 2012, this according to the Japan Tourism Agency. And with the local shoppers now discouraged by a sales tax that has recently been bumped to 8 percent in April, the tourist spending has offered Japanese retailers some welcome relief.