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.
Airbnb estimates that its services contributed 920 billion yen ($8.35 billion) to the Japanese economy in 2016, up 80% from the previous year, as foreign users took advantage of affordable lodging in big cities and rural areas. (Nikkei)
Princess Kako, a granddaughter of Emperor Akihito, will study at the University of Leeds in Britain from September this year to June next year as an exchange student, the Imperial Household Agency said Monday. (Japan Today)
Tokyo Metropolitan Police have arrested the former manager of an illicit parlor in Shinjuku who is suspected of instructing teenage girls to perform sex acts with customers, reports TBS News. (tokyoreporter.com)
The Japanese government has decided to start landfill work at the Henoko coastal area in the city of Nago, Okinawa Prefecture, on Tuesday for the relocation of the U.S. Marine Corps' Futenma air base, informed sources said Monday. (Jiji)
The Bank of Japan wants financial institutions to lend more money under its large-scale monetary-easing policy. But it's worried that some regional banks are too eager to offer real estate loans, especially for building rental housing. (NHK)
Two elderly women were hit and killed by a train at a station in Kanagawa Prefecture, south of Tokyo, with surveillance camera footage showing the two jumping on the tracks holding each other's hands, police said Monday. (Japan Today)
Rakuten Inc announced the official launch of "Rakuten Super English," a comprehensive English learning service utilizing technology to provide a practical English learning and a new style of studying. The launch of Rakuten Super English marks Rakuten's entry into the English education business. (Japan Today)