A series of new duty-free stores will open in Ginza, Tokyo, from this autumn to cater to the growing number of foreign customers coming to the shopping district.
"Airport-style duty-free shops" - where not only the consumption tax, but also customs, alcohol and other taxes are waived - are scheduled to open for the first time in Tokyo. An influx of foreign visitors has brought a change of mood to Japan's renowned shopping district, and progress has been made to create a place that will entertain both foreign and Japanese visitors.
Department store managers in Ginza offer plenty of anecdotes about shopping sprees, particularly regarding Chinese customers. Among the anecdotes, one customer bought four down jackets priced at more than ¥200,000 (S$2,322) each while another purchased three bottles of Romanee-Conti wine for ¥8 million in total.
Consumption by foreign visitors came to about ¥2.03 trillion in 2014, up 43 per cent from the previous year, according to the Japan Tourism Agency. Shopping accounted for 35 per cent of the total consumption.
Isetan Mitsukoshi Holdings Ltd., which operates the Mitsukoshi department store in Ginza, saw its duty-free goods sales for the April-June quarter nearly triple to about ¥16.2 billion from a year earlier. Sales of luxury items at Mitsukoshi's Ginza store were significant. The Ginza store will house an airport-style duty-free store on the eighth floor this year, carrying upscale brands of cosmetics and jewelry. It aims to post about ¥10 billion in sales in its first year of operation.
Home appliance retailer Laox Co. also plans to open a duty-free shop near its Ginza head store in September. In a new commercial building being developed by Tokyu Land Corp. in Ginza 5-chome, the South Korean arm of Lotte Group is scheduled to open an airport-style duty free shop next March. Since April, Yamada-Denki Co. has strengthened measures to attract foreign customers such as by displaying before-tax prices.
An influx of foreign customers has also produced adverse effects, with scenes of some of them cutting into lines and having to stay for hours at service counters being seen frequently. Opening more duty-free stores could ease such concerns.
"The move is aimed at allowing foreign visitors to shop at duty-free stores while allowing Japanese customers to take their time shopping at other stores," a source familiar with the industry said.
Measures have been worked out to tackle traffic congestion due to a surge in tourist buses. A commercial facility being developed by Mori Building Co. and J. Front Retailing Co. on the former site of the Matsuzakaya department store is expected to have a platform for up to four buses to relieve traffic jams. The facility is slated to open in November 2016.
Many tour packages for Chinese visitors include Ginza as a tourist destination. A manager of a major department store said, "Shopping in globally well-known Ginza has become a status symbol."
Ginza has the advantage that people can shop in a short amount of time at a wide variety of stores, including department stores, upscale brand-name outlets, Uniqlo and other casual outfit shops.
However, recent rapid falls of Chinese stock prices have sparked concern over a possible negative impact on Chinese customers. "At this moment, we haven't seen any significant changes to the number of customers and sales, but we have no way of predicting the effects" of stock price falls, said an Isetan Mitsukoshi Holdings official.
Nevertheless, hopes are high for Chinese and other foreign customers.
An official of a merchants group, which comprises local businesses and conducts community planning, said, "We have to create a town where both foreign and Japanese visitors can enjoy shopping at ease through measures such as distributing brochures that explain social manners."