Fear of competition from Japan’s fast expanding tax free shopping market has ignited an interest from Japan’s airports to open downtown duty free stores, according to TRBusiness Asia correspondent, David Hayes.

Japan’s leading airport corporations believe that opening downtown duty free stores will enable them to serve customers who have the luxury of greater dwell time, as opposed to those who have to make hurried purchases in an airport shop before catching their flights.

According to recent Japanese press reports, the number of tax free shops across Japan has more than doubled during the past year with more tax free shops set to open in future.

It was Jiji Press Agency, in particular, which recently reported that the number of licensed tax free shops – that do not collect the regular 8% consumption tax on goods purchased by foreign visitors – rose to 18,779 at the beginning of April. This is double the 9,361 licensed tax free shops that were in operation at the start of October 2014.

Yurakucho tax free store in Tokyo.

The sharp increase in tax free shop registrations followed the government’s decision to increase the range of products eligible for consumption tax exemption for foreign tourists. These now include cosmetics, food and beverages from last October.

Tokyo, Osaka, Hokkaido, Kanagawa and Fukuoka are reported to have seen large increases in the number of tax free shop registrations during the past year, which now include a growing number of shops located in the landside departure areas at various airports, including Narita, Haneda and Kansai airports.

In Tokyo’s downtown Haneda Airport Tokyo International Airport Terminal (TIAT), for example, some 19 shops have registered to operate as tax free shops in the terminal’s landside shopping area.

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