Services tailored to foreign visitors

According to figures released Wednesday by the Japan Tourism Agency, foreign visitors spent more than ¥2 trillion in the January-June period, the first time this milestone has been reached in the first half of the year. Although lavish spending sprees by Chinese visitors cooled off last year, shopping by tourists at department stores and other shops has rebounded, and companies are feverishly drawing up plans to attract more foreign visitors.

However, observers have pointed out that while tourists have the cash registers ringing in major metropolitan areas, the impact has been weaker in regional areas.

Chinese people accounted for 80 percent of the customers at the large duty-free shop that Takashimaya Co. opened at its Shinjuku department store in Tokyo in April. It’s common to see customers in the bustling store paying for their purchases via smartphone. Many are using Alipay app, an online payment platform used by several hundred million people in China. The payment is made after the shop scans a QR code displayed on the customer’s smartphone.

“I can use Alipay in more stores in Japan now, so shopping here has become convenient,” said a 25-year-old man from Hangzhou, China, who bought a luxury watch at the shop.

Takashimaya started introducing Alipay at its major stores across Japan last year. Its duty- and tax-free sales in the 10 consecutive months through June had all been higher than the same month the previous year, with sales in the March-May period reaching ¥12.6 billion, up 50 percent from the same period in 2016.

“Offering more payment methods has certainly been an advantage for us,” a Takashimaya spokesman said.

Overseas visitors who spend ¥1 million or more within one year at Daimaru Matsuzakaya department stores are issued a card that entitles the holder to special privileges and services. Even during crowded times, the holder can complete their tax-free procedures without having to wait in line.

“A growing number of people repeatedly come to Japan on private trips,” a Daimaru Matsuzakaya Department Stores Co. spokesman said. “We want to boost the number of repeat shoppers coming to us.”

Companies’ stepped-up efforts to tap consumption by foreign visitors come at a time when Japan’s chronically low birthrate, aging society and declining population offer little prospect for long-term growth in the domestic market. Instead, hopes are being pinned on spending by tourists.

“Overseas tourists are a growth market that the retail industry has not experienced before,” an industry analyst said. It is also a crucial market that does not require fighting with other companies in the same industry, or with other industries, for a slice of a limited pie.

Getting around getting easier

For foreign visitors, being able to easily travel around the country is another important consideration.

Major taxi companies have launched apps that enable tourists, who may struggle to explain their current location, to call a taxi by using the precise location information of their smartphone. The Tokyo Hire-Taxi Association has started a fixed fare service for rides between Haneda Airport and various locations within the Tokyo metropolitan area. A ride to Shinjuku Ward is set at about ¥7,000, which is about 10 percent to 30 percent less than a normal metered fare would cost.

Tokyo Metro Co. has placed about 870 tablet-type devices at station offices, ticket gates and other locations at all of its 170 subway stations. Equipped with translation apps that can handle 31 languages including English, the tablets make it easier for station personnel to give directions to foreign visitors trying to reach a tourist spot.

Buying continues at home

The products filling the shopping bags of overseas visitors are changing.

According to the Japan Department Stores Association, each visitor to Japan in May spent an average of ¥65,000, a decline of about 20 percent from the same month in 2015. This was a result of the best-selling items shifting from luxury brand goods to comparatively lower-priced cosmetics and food products.

A major factor behind this change is the fact that last year Chinese authorities hiked the customs duty imposed on products purchased overseas and brought into China. But because the number of visitors to Japan is increasing, the overall expenditure is rising.

A conspicuous number of visitors also go shopping on online retailing websites after returning home from Japan. This is called “crossborder e-commerce.” In October, Don Quijote Co., a discount store chain, launched an e-commerce service that delivers items to about 10 regions and nations, including China. According to the company, daily goods such as makeup and processed food products are especially popular among users of this service.

Consumption by overseas visitors tends to be concentrated in major metropolitan areas such as Tokyo and Osaka, so finding ways to help this spending reach regional areas is an issue that needs to be addressed. At a time when more foreign visitors are going on trips to regional areas, companies will need to get more creative to bring in more customers.