Japan’s leading duty free operators reported sales growth of 20% and more during Q1 of the current fiscal year and duty free sales on mainland Japan (not including DFS Okinawa) seem likely to pass the US$1.5bn mark by the end of current FY 2015.

Boutiques in general have performed well during the past year and those which offer brands most popular with Chinese have seen a sharp upturn in business.

Watches and jewellery are selling particularly well in Japan’s airport boutiques along with leathergoods. Chinese shopper preference brands, of course, are recording the highest revenue growth.

Japanese customers are still important, however, as many prefer to buy luxury goods in Japanese airport shops to ensure they receive Japanese after sales service.

Another reason is that duty free prices are often lower in Japan (currently) due to the weak yen, compared with most other airports and downtown duty free shops in Asia.

According to government figures Japan received some 11m foreign visitors from January to July this year, a 47% increase compared with the same period in 2014.

The country received a total of 13.4m overseas visitors for the whole calendar year in 2014, according to the Japan National Tourism Organisation.

The Japanese Government aims to increase the number of overseas visitors to the country to 20m by 2020 in the same year that Japan will host the summer Olympics and with current tourism growth well ahead of target, duty free operators believe the government’s target may be achieved much earlier, in 2016.

The number of visitors from China is growing fastest at present after Japan introduced visa-free tourist entry for mainland visitors earlier this year.

[An exclusive Japanese Market Report by David Hayes appears in the October issue of TRBusiness.]