Declining numbers of South Korean, Chinese tourists in Japan saps retailers

The declining spending by Chinese and South Korean tourists in Japan is beginning to hurt listed retailers.

As reporting season kicks in for listed Japanese companies, the effects of a drop in inbound visitor numbers is becoming clear. 

Matsumotokiyoshi Holdings, a drugstore operator, has reported a drop in net profit in the June quarter of 2 per cent – its first decline in two-and-a-half years. Its sales of tax-free goods to foreign visitors – which soared 34 per cent in the June quarter last year – were flat this time around.

Department-store operator Isetan Mitsukoshi Holdings reported a 3 per cent increase in tax-free sales at its Ginza flagship, but group wide, tax-free sales rose by a mere 1 per cent. 

Cosmetic company Kose says its sales to tourists fell 17 per cent, the first decline after nearly two years, and a huge turnaround from the 77 per cent increase of the same quarter a year ago. 

Fancl’s sales growth was down from 122 per cent to 15 per cent. 

Tourist numbers from China to Japan are down due to the declining value of the yuan, increasing fares and declining consumer sentiment on the mainland. Meanwhile, fewer South Koreans are visiting Japan due to the growing diplomatic row between the two countries, centering on compensation for comfort women kept in slavery by occupying Japanese forces before and during the Second World War.


Analysts say the situation is unlikely to improve in the near term with the number of Chinese tourists in Japan expected to continue to decline with the yuan now at a three-year low of about 15 yen – two yen less than a year ago.

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