Japanese Luxury Sector Rides Weak Yen To Growth

Retail and Consumer Confidence
24/11/2015 09:17

Japan has emerged as a key locale for Chinese traveler-driven sales growth in 2015, as mainland China’s luxury consumers shift their spending away from once-favorite shopping destination Hong Kong. Hermès reported recently that Japan was the source of its highest sales growth rate globally in the third quarter with a 16.6% increase. In contrast, its Asia-Pacific sales excluding Japan declined 1.5%, which the brand said was thanks in large part to a continued retail slump in Hong Kong and Macau. The rise of Japan and fall of Hong Kong and Macau were even more pronounced for Richemont when it reported its first-half revenue last week, with 44% growth in Japan and a 17% decline in the rest of the Asia-Pacific region. Burberry’s is also expanding in Japan with new store openings.

Japan's sudden dominance of Asian luxury market growth may not be a permanent situation, as much of the growth is due to the weak yen, meaning that future currency fluctuations could change the preferences of Chinese shoppers. In addition, equally easy-to-reach South Korea is working hard to regain tourists and shoppers.