New sales data from Japan Airport Terminal Co (Jatco) – a division of Japan’s JAT Group* – show just how influential the Chinese are in driving sales at Japanese airports, and why so much focus remains on this nationality.

Jatco has revealed to TRBusiness that its duty free and travel retail revenue for FY2015 (ending March) reached ¥67bn/$612.6m, surging by +27%. The income came from three key airports: Haneda (HND) and Narita (NRT) in Tokyo, and Kansai (KIX) with shares of 51%, 35% and 14% respectively (see pie charts below).

Driving the +27% overall growth were Chinese travellers whose numbers into Japan in 2015 soared by +94% (source: JNTO) with HND being a particular beneficiary. According to Jatco’s Duty Free Business Division Director, Osamu Tomizawa, the opening up of HND to Chinese flights had a big impact on DF&TR sales in 2015 and he says he is “very happy” with FY2015.

After Chinese flights increased to Haneda last year, their share of traffic almost doubled from 5% in FY14 to 9% in FY2015 – but this has also impacted Narita. HND’s share of Jatco’s DF&TR revenue rose from 49% to 51% while NRT’s fell from 37% to 35%. In addition, Narita’s liquor and food sales both contracted whereas at Haneda, the contraction of liquor was much smaller while there was a surge in demand for food products.

In a statement, JAT Group notes: “Significant year-on-year growth in inbound visitors to Japan due to the weakening of the yen and the easing of visa requirements for southeast Asian countries boosted full-year sales at international terminal stores and other (wholesale) revenues, although the so-called ‘buying spree’ phenomenon showed signs of weakening in the latter half of the year.”

Tomizawa believes that the surging Chinese numbers may have stabilised and that growth in 2016 will moderate,” he tells TRBusiness: “Now the Japanese yen is rising in value and also Haneda is almost at full capacity.”

WARNING BELLS… ESPECIALLY FOR FASHION

The yen’s rise has already had an impact which has sent warning signs to Jatco. In April this year, across the three airports where it operates, despite a pax upswing of close to +10%, sales in every category except food were all negative (compared with April 2015).

NRT was worst hit with contraction seen among all categories, with fashion, beauty and liquor all down in high double digits, not helped by a slight contraction in passenger numbers.

At HND, pax growth of over +20% ensures that all categories continued to rise apart from fashion and at KIX, beauty was down slightly while fashion took the biggest hit even though pax numbers rose by more than +10%.

At both NRT and KIX fashion was down by more than -40% signalling the category’s sensitivity to currency trends. Food was the most resilient and buoyed the overall level of DF&TR sales at the three airports at over +20%.

This summer, Chinese seat capacity data provided exclusively to TRBusiness by OAG, indicate that Haneda will continue to see an improving picture in terms of Chinese seats from both Shanghai Pudong and Beijing International airports. Meanwhile among the top 30 city pairs, Narita is set to languish at the bottom with its seat numbers to Shanghai set to reduce by -3% (see chart).

* JAT Group consists of Jatco (Japan Airport Terminal Co), 17 subsidiaries, and 10 affiliated companies. In addition to facilities management, including operation of the domestic and international passenger terminals of HND and the provision of services to users of these terminals, JAT Group conducts merchandise sales and F&B operations. The group also has merchandise sales operations at Narita, Kansai, Central Japan, and Chengdu Shuangliu airports (the latter is in Sichuan province, China).