Not losing its shine
TIGHT-FISTED shoppers, unsteady economic growth and a shrinking population: Japan doesn’t exactly fit the image of a spending powerhouse these days.
But you would never know it in Ginza – Tokyo’s answer to the Champs Elysees or Fifth Avenue – where a new 13-storey upscale mall is proving that Japan is still a whale in the luxury business.
The country logs $22.7 billion in annual spending on top-end goods made by brands including Chanel, Dior, and Prada, ranking it as the world’s number two luxury market behind the US.
“Luxury products may be more expensive, but they are very well-made,” 79-year-old Toshiko Obu, carrying her long-time Fendi bag outside the Ginza Six building, said.
The building has been drawing big crowds since last week’s opening.
Japan is renowned among the world’s priciest retailers for its discriminating clientele – Chanel tries to keep local customers physically separated from tourists packing more cash than class.
“You shouldn’t forget that a big portion of the luxury clientele is here in Japan,” Sidney Toledano, chairman and CEO of Christian Dior Couture, said at the opening of the 241-store building.
“It remains a strategic market for luxury and, I’d say, true luxury.”
Dior is counting on Japan’s luxury market to rise this year, while rival Chanel is also expecting an upbeat 2017, after global sales of personal luxury goods barely grew last year.
“We did not lose our character,” said Richard Collasse, head of Chanel in Japan. “There are brands that are suffering – the ones that at some stage stopped investing in Japan because China was the new El Dorado.
“Today they are biting their fingernails.”
Few brands predicted that deep-pocketed Chinese shoppers visiting Japan would support its luxury market – tourists account for about one-third of top-end spending.
Japan is hoping to land 40 million visitors in 2020, the year Tokyo hosts the Olympics. Last year, six million Chinese visited, compared with 2.4 million in 2014.
A stronger yen dented visitors’ purchasing power last year, with luxury sales down one per cent.