Chinese Luxury Shoppers Flock to Japan Amid Declining Domestic Sales
- Luxury brands like LVMH, Kering, and Burberry reported increased sales from Chinese travelers in Japan.
- This surge in spending is notable despite weaker sales in China.
- The weaker yen has contributed to making Japan a more attractive shopping destination for foreign tourists.
As the luxury market shifts, recent data reveals a significant change in Chinese consumer behavior regarding luxury spending. Prior to the pandemic, approximately half of Chinese luxury purchases occurred abroad, but this figure has now decreased to between 20% and 25%, according to consulting firm Oliver Wyman. Despite this overall decline, Japan has emerged as a favored destination for affluent Chinese shoppers, driven by favorable exchange rates and lower prices. Kering's Yves Saint Laurent reported a remarkable 42% increase in sales in Japan during the first half of the year, largely attributed to a surge in tourists from China and Southeast Asia. Similarly, luxury giant LVMH noted "exceptional growth" in Japan, with a staggering 415% increase in visitors from mainland China, totaling 3.1 million in the same period. This influx is supported by Oliver Wyman's findings that luxury goods in Japan are priced 10% to 30% lower than in mainland China, making it an attractive shopping destination. Despite the rising interest in Japan, overall luxury spending among Chinese consumers has faced challenges due to economic uncertainties. While Japan ranks as the fourth-most popular destination for luxury shopping, Hong Kong remains the top choice, followed by Macao and Singapore. Notably, brands like Burberry and Tapestry have reported contrasting sales trends, with Burberry's mainland China sales plummeting by 21%, while its Japanese sales grew by 6%.