Japan gears up for rise in cosmetics sales thanks to duty-free expansion

By Michelle Yeomans

- Last updated on GMT

Japan gears up for rise in cosmetics sales thanks to duty-free expansion

Related tags Retailing Japan

As of October 1st, duty-free products in Japan, previously limited to electronics and clothing, now includes consumable items like food and cosmetics. 

Last year, the number of visitors to Japan hit a record 10.36 million and with waived visa restrictions and a soon-to-be abolished consumption tax, cosmetics sales are to set to see a significant rise. 

Japanese cosmetics are already a popular tourist purchase with, for example, over 90% of Chinese tourists buying them.

Alongside this growth, the Japanese government hopes to double the number of duty free shops to around 10,000 by encouraging shops outside the major cities to apply for relevant permission.

In fact the government hopes that by 2020 the year of the Tokyo Olympics, 20 million visitors will have come to the country.

This updated duty-free list and the abolished 8% consumption tax will ultimately see demand for cosmetics increase among foreign tourists, which Japanese retail chains are scrambling to accommodate by expanding their services and workforce.

However, retailers will have to place stickers on products warning customers not to open them before they leave Japan, or use adhesive on products and packaging that will show if the item has been opened.

Cosmetics buyers among the highest spenders..

A recent survey by the Japan Tourism Agency revealed that 38.5% of tourists who visited Japan bought cosmetics and pharmaceuticals, making them the third most commonly bought item after food and confectionery.

The average amount spent on cosmetics and pharmaceutical products was ¥20,270 (USD $205.52). Visitors from China were the highest spenders, with 68.4% purchasing and an average spend of ¥34,521 (USD $350.01).

Taiwan and Thailand tourists also featured prominently in purchasers of cosmetics, with 62.8% and 42.3% purchasing and average spending being ¥16,406 and ¥15,921 respectively.

The same study revealed that 3% of the ¥1.09 trillion spent by tourists each year was allocated to shopping.  Foreign visitor numbers in Japan were 8.37m in 2012, an increase of 34.6% the previous year, with the Japanese National Tourist Organization setting a target number of 10m tourists for 2013.

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