Tax-free store operator Laox, which once enjoyed record earnings from the phenomenon known as bakugai, or "explosive buying" by visitors to Japan, is struggling to keep up with consumers' shifting spending habits.
Though travelers to Japan from China and elsewhere have not decreased, their buying trends have changed, with a greater focus on experience-based consumption rather than the purchase of goods. Consequently, Laox is among many Japanese retailers racking their brains to find new business opportunities.
The company fared poorly in 2016, with its sales shrinking more than 30% from the prior year. It also plunged to a net loss of 1.5 billion yen ($13 million) from an 8 billion yen profit in 2015, logging its first red ink in three years. President Luo Yiwen conceded the figures were "disappointing" after the company released results on Tuesday.
Luo has "no doubt' that inbound tourism is still a growth field. But he pointed out that visitors to Japan who "were buying high-value durable goods before ... are now buying low-priced consumables." Laox's per-customer sales decreased on the year in all 12 months of 2016. In response, the company this year significantly downsized its tax-free AsoBitCity location in Tokyo's Akihabara electronics district.
Luo sees experiential spending as key to a sales turnaround and the Japanese retailer has created a department overseen by directors to cultivate new business.
The touchstone for this effort is Chiba Port Square, which Laox acquired with Chinese real-estate giant Greenland Holdings last year. The multipurpose commercial complex is slated to offer not only shopping but also gourmet dining and entertainment. The company hopes this new type of commercial establishment will appeal to domestic consumers as well as visitors.
But details of the services to be available at the mall have yet to be hammered out. Buildings for commercial activities are still mostly vacant and the startup of operations -- originally scheduled for 2016 -- is unclear.
The Japanese government is planning to reduce penalties for those who plot serious crimes like terrorism but turn themselves in before actually committing them under a contentious anti-conspiracy bill it is preparing, sources close to the matter said Monday. (Kyodo)
Car-bicycle collisions accounted for about 40 pct of fatal traffic accidents in Japan last year in which passenger cars bumped into other vehicles as they encountered at intersections or other parts of the road, a National Police Agency survey has revealed. (Jiji)
Prime Minister Shinzo Abe on Monday sought to deny allegations that he is linked to an Osaka-based ultranationalist kindergarten as the public outcry over the operator and its alleged efforts to indoctrinate children with xenophobia and pre-war militarism grows. (Japan Times)
Manhole covers are trending high in Japan and for good reason -- they're stunning! Only in Japan are manholes to cover sewage designed so beautifully that they now make MANHOLE TRADING CARDS! (ONLY in JAPAN)