The Japan Shopping Center (SC) Association held its 38th National Convention of Japan Shopping Centers at Pacifico Yokohama from January 22nd to 24th. A symposium was held to commemorate the SC Association's 40th anniversary.
On the second day, a symposium was held on the theme of "Future Inbound Strategies with an Eye on Market Expansion," with panelists Ryoichi Matsuyama, Chairman of the Japan National Tourism Organization; Kunio Ishizuka, Chairman and Representative Director of Isetan Mitsukoshi Holdings; and Takuro Yamanaka, President of Mitsubishi Estate Simon, and coordinated by Kazuhiro Shinohara, Executive Director of the Japan SC Association. Matsuyama delivered a keynote speech on the SC industry's response to inbound tourism, with the theme "Towards an era of 20 million foreign visitors to Japan."
The number of international travelers exceeded 1 billion in 2012. With an annual growth rate of 3.8% expected over the 10-year period from 2010 to 2020, and a forecast of 1.36 billion visitors in 2020, the report analyzes Japan's current situation as a tourism-based nation, where inbound tourism is lagging behind. The number of foreign visitors to Japan surpassed 10 million in December 2013, driven by the expansion of LCC operations and growing demand for overseas travel from emerging markets such as ASEAN and India, highlights the importance of the tourism industry as a pillar of the country's growth strategy. Given that inbound tourism currently accounts for 6.6% of travel spending in Japan, a lower share than South Korea at 47%, France at 30%, and the UK at 18%, the report analyzes that the potential for growth in spending by overseas tourists at shopping centers will be a key factor in Japan's tourism industry in the future. ■ Duty-free sales at Mitsukoshi Isetan's three core stores double year-on-year, with Issey Miyake and Comme des Garçons among the top sellers
Next, Kunio Ishizuka, Chairman of Mitsukoshi Isetan Holdings, provided a numerical analysis of the trend in department store duty-free shopping among foreign visitors to Japan and the current situation at Mitsukoshi Isetan. "According to figures released by the Department Stores Association, since the start of 2013, duty-free sales have been growing at a rate of about 20% year-on-year each month, surpassing the growth in customer numbers. Of all foreign visitors to Japan in 2013, Chinese customers accounted for 92.2%, down from the previous year. However, at Mitsukoshi Isetan's three core stores, customer numbers increased by 179% and duty-free sales increased by 205%, nearly double the previous year. Chinese tourists now account for roughly 50% of duty-free sales at the three core stores," he explained.
Duty-free sales have shown strong growth, with Isetan Shinjuku reaching approximately 7.2 billion yen (191% compared to the previous year), Mitsukoshi Ginza reaching approximately 2.85 billion yen (206% compared to the previous year), and Mitsukoshi Nihonbashi reaching approximately 1 billion yen (176% compared to the previous year). However, even when looking at Isetan Shinjuku alone, its share of duty-free sales is still only 3% of the total, which is still low compared to overseas department stores such as Galeries Lafayette's flagship store at 30% and Harrods' flagship store at 15%. Japanese brands such as Issey Miyake and Comme des Garçons are among the top 10 brands in Isetan Shinjuku's duty-free sales, and the company explained its strategy by saying, "Promoting Japanese brands and products and collaborating with overseas stores will be important in strengthening inbound tourism to the shopping center."
Furthermore, Takuro Yamanaka, president of Mitsubishi Estate Simon, which operates premium outlets in Gotemba, Shisui, and other areas, announced that the number of inbound tourist groups at all premium outlets reached 360,000 in 2013 (159% increase over the previous year). The ranking by country (share compared to the previous year) was 1st place Thailand (25% or 173%), 2nd place China (20% or 97%), 3rd place Taiwan (16% or 204%), 4th place Hong Kong (15% or 197%), and 5th place Indonesia (8% or 210%), and he cited an increase in foreign tourists in particular as the reason for 30% of Gotemba's double-digit growth. Sales from individual travelers account for approximately 10% of total sales, and "in the future, we expect an increase in individual travelers from group travelers, which will have a major impact not only on the hotel industry but also on shopping centers, department stores, and transportation," he said, explaining that the company is already leading the way in inbound tourism, with measures such as installing prayer rooms for Muslim travelers, providing menu labels, and providing multilingual smartphone support.
"Increasing the number of foreign visitors to Japan from 10 million to 20 million does not simply mean doubling the current numbers. Looking at department stores, the number of duty-free customers is expected to increase three to four times, and duty-free sales are expected to increase five to six times. To achieve this, we need to develop the infrastructure across Japan," said Chairman Ishizuka.
In line with Executive Director Shinohara's summary that "SCs have the potential to become an important tourism resource in Japan in the future," the panelists made recommendations such as "we need to bring the food and beverage and retail industries, which are currently among the top reasons why foreign tourists visit Japan, into the ranks of the tourism nation," "we need to establish a duty-free system that can compete with Europe and the United States," "we need to engage in marketing activities aimed at retaining foreign customers," and "we need to make the transportation system more inbound-friendly."
