JAPAN REPORT: INTRODUCTION
included 8.4 million visitors from China, 7.5 million from South Korea, 4.8 million from Taiwan, 2.2 million from Hong Kong and 1.1 million from Thailand. While it is difficult to breakdown
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Stars and Chinese brand Chunghwa are also popular in some locations. The association also reveals that
the preferred product categories per each of the aforementioned nationalities within this introduction [this information can be found in the numerous interviews which follow] perfume and cosmetics occupies No. 1 position as Japan’s fastest growing duty free category overall. This is according to the leading retailers interviewed for this report, accounting for 40% to 60% of most airport and downtown operators’ total duty free sales. The range of Japanese beauty
products and brands available on the market continues to grow and includes manually operated beauty appliances from leading brands. More domestic Japanese beauty brands are being launched in duty free – both high-end collections and more reasonably priced everyday brands. Shiseido and SK-II are two of
the leading Japanese duty free cosmetics brands. Unsurprisingly, tobacco is Japan’s
second largest duty free category, with Iqos e-cigarettes easily the most popular brand. Duty free sales of tobacco products to outbound Japanese travellers have grown following two increases in government tax rates in recent years. Consumer tax is due to rise again
from 8% to 10% on 1 October 2019, which should boost sales to Japanese passengers in airport departure and arrival shops. As mentioned, Chinese passengers
are buying cartons of Iqos in Japanese airport shops due to a lack of availability in China, however, Chinese customers are buying fewer cartons than they did previously, due to stricter customs inspections in China’s major airports. A recent survey by the Duty Free
confectionery items are popular in airports in Hokkaido, which is famous for its dairy milk production, ice cream, chocolate and cakes. While growth is not as significant
for liquor as it is in beauty or tobacco, revenue from wines & spirits nonetheless remains stable, with sales of leading Japanese malt whisky brands limited by insufficient stocks, due to under-investment in expanding whisky production following the 2008 global financial crisis. Last, but not least, luxury boutique
sales, have seen an upturn during the past year with sales of expensive watches, especially Omega, climbing quickly recently.
12-shop Kansai T1 tender Meanwhile, duty free and tax free shops are due to increase in size and number in the coming months as various Japanese airports carry out expansions to their international terminals. For example, Haneda Airport is
carrying out a major international passenger terminal expansion, which involves converting the south wing of domestic Terminal 2 to handle All Nippon Airways (ANA) international flights. Meanwhile, the TIAT Annex will
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be operated by Tokyo International Air Terminal Corporation (TIAT), which runs Haneda’s existing international terminal. The TIAT Annex will include a large walkthrough duty free store operated by Jatco and ANA Trading Duty Free that all departing passengers will pass through as they walk to their departure flight gate. Tokyo’s other major international
Shops Association of Japan revealed that among its 35 members, tobacco was the biggest duty free category for most provincial international airports in 2018. Iqos and Marlboro came out on top for all airports, while JTI’s Seven
OCTOBER 2019
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airport, Narita, is due to begin work shortly in T3 to expand the terminal in order to double passenger capacity to almost 15 million a year by early 2022. The duty free departure zone will be expanded to serve the additional passengers who will be travelling with low-cost carrier airlines. Elsewhere, in Osaka, Kansai Airport is planning to increase its T1 passenger capacity by an extra 10 million to 39 million passengers
Tax free shops, such as the above at Narita International Airport, are becoming more important to operators.
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to be shorter than usual, possibly two to three years, allowing Kansai Airports to repossess the shop space to allow for renovation work to take place unencumbered on the entire T1 enlarged duty free retail area. This is due for completion by 2025. «
Liquor sales remain stable, although whisky suffered from a re-stocking issue.
Kansai Airport will remodel its T1 airside duty free departure shopping layout to accommodate the increase in passengers. It is currently conducting a tender for 12 existing duty free shops and boutiques in T1 and two shops in T2. The present licences are due to expire in August 2020.
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(per year) by 2025, when the Osaka World Expo is due to be held. Kansai Airport will remodel its T1 airside duty free departure shopping layout to accommodate the increase in passengers. It is currently conducting a tender for 12 existing duty free shops and boutiques in T1 and two shops in T2 The present licences are due to expire in August 2020. The new license period is expected
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