JAPAN REPORT: LOTTE GINZA DOWNTOWN
cosmetics brands have been launched in the extended tax free zone. These include the medium-priced
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Kobako range of manicure, haircare and skin care products; and the low-priced Wakosume collection of cosmetics and household items that are popular in smaller Japanese towns and cities. Also new to launch is the mid-
priced Uka range of beauty and personal care products. “The Uka brand is becoming more
popular and is being launched in department stores,” adds Lee. “Uka’s hair care products are its most popular category.”
Daigou’s share rises Lotte Duty Free Ginza’s decision to expand its tax free zone reflects the growing importance of lower- priced Japanese cosmetics in Japan’s Chinese customer-driven downtown duty free market. “We expect the tax free market
will grow faster than duty free,” says Lee. “As our customer target is foreigners and most are looking for Japanese products, we thought the tax free zone should be our focus this year. “Tax free is a continuously
changing category as customer shopping trends change regularly; it’s difficult. “The duty free market in Japan is
changeable and the price range of tax free goods [will go up and down] a lot.” Catering to Mainland Chinese
the past 12 months has been the increasing importance of Chinese Daigou traders as their share of Lotte Duty Free Ginza’s sales have risen. However, product sales restrictions (generally three pieces per item) imposed by cosmetics manufacturers have limited more impressive growth. “Most [Daigou] customers are
looking for cosmetics; skincare products and make up,” according to Lee. “Also, they are looking for ReFa
and Yaman Japanese handheld beauty appliances. “Yaman has about 50 beauty
appliances. It’s the most popular beauty appliance brand in Japan.” Daigou traders account for about
half of all sales in Lotte’s Ginza downtown store, however this is fewer than in Lotte Duty Free’s downtown shops in South Korea. “Chinese trader sales are 50%
of our total business, but there is a big difference in the Chinese trader business in Japan and South Korea,” says Lee. “In South Korea it’s a big volume,
but in Japan there is a three piece per item purchase limit, so there is a huge difference.” Trader customers from China that
are visiting South Korea generally look to purchase South Korean products, Lee reveals, while traders visiting the Lotte Ginza store are looking for Japanese goods. However, a small proportion of
customers is critical as they account for 80% of total spending in Lotte Duty Free’s Ginza downtown store. Taiwanese customers represent
a further 10% of total sales, while Japanese outbound travellers account for just 5% of purchases. “Japanese customers are slow to
grow,” admits Lee. “Tax free shopping is better
known here than downtown duty free shopping. “Most Japanese people have
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Chinese Daigou buyers visiting Japan and South Korea are looking to buy international brand goods, mostly in cosmetics. “Most Chinese traders come to
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our shop every day; they come to our store and they go to other stores,” Lee continues. “The buyers are interested in all
Japanese brands as there is a limit, so they buy three of each brand. As we sell only a limited amount, they focus more on tax free goods as duty free is limited quantities.”
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not noticed downtown duty free shopping. Japanese customers are quite slow to grow compared to customers from other Asian countries.” One major development during
OCTOBER 2018
Luxury brand overhaul Meanwhile, Lotte also has made several changes on the eighth floor where luxury brands are displayed. The MCM boutique has been
reduced in area following a slowdown in sales, allowing a
Customers are looking for ReFa and Yaman Japanese handheld beauty appliances.
TRBUSINESS 163
fashion watch counter in Lotte’s Ginza store. “Some fashion watches counters
have been changed and we have newly introduced Daniel Wellington to our store which is popular with Chinese customers,” says Lee. «
Catering to Mainland Chinese customers is critical as they account for 80% of total spending in Lotte Duty Free’s Ginza downtown store.
TRBusiness
Montblanc boutique to be opened in the newly vacated space. “MCM was really popular with
Chinese at the start, but the boutique size was too big and not feasible now, so we halved the size and launched Montblanc in a 28sq m boutique,” explains Lee. “A lot of customers are looking for
accessories and Montblanc is one of the most popular accessory brands.” Another recent project has
involved converting the former Polo Ralph Lauren boutique to offer Lacoste fashion items. “Most of Polo’s stock is men’s
products, but our main target is women, so we are launching new female products,” according to Lee. He reveals that Lacoste is actually
more popular than Polo Ralph Lauren in China. Other recent changes on the
eighth floor include reducing the size of the watches zone and opening several fashion accessory shops to meet growing customer demand. In early July, Hong Kong accessory
brand Qeelin opened its first retail outlet in Japan. This replaced the previous Guess
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